Expansion of the highly efficient store format and custom-order brand "DIFFERENCE"

「At DIFFERENCE, its order-only brand, the Company began accepting orders for pull-over shirts and BIZ polos based on the concept of “more refined than a T-shirt, lighter than a dress shirt,” and worked to develop new demand during the summer.」

「At DIFFERENCE, its order-only brand, the first store of the next-generation made-to-order suit brand FUTURE SUIT TECHNOLOGY, which uses AI and digital technologies, was opened in the northern Kanto region last December. The Company subsequently steadily increased the number of stores, seeking to reach regions and customer segments it had previously been unable to serve.」

「At “DIFFERENCE,” increasing the number of available styles in premium fabrics, including those from the Italian top-quality fabric manufacturer “Ermenegildo Zegna,” and mid-priced fabrics drove up average spending per customer.」

「At “DIFFERENCE,” increasing the number of available styles in mid-priced and premium fabrics won support from both new and existing customers, driving up average spending per customer.」

「At the order-only “DIFFERENCE,” we established a new overseas production base to meet growing demand for made-to-order products. By stabilizing delivery times and expanding capacity, we reduced lost sales opportunities.」

「At “DIFFERENCE,” we worked to expand production capacity, including by establishing a new overseas production base in preparation for the freshmen sales season. As a result, we reduced lost sales opportunities and secured revenue above the previous year.」

「At “DIFFERENCE,” as demand for made-to-order products continued to increase, we reduced lost sales opportunities by rebuilding our production capabilities and expanding capacity. As a result, made-to-order products consistently accounted for more than 30% of suit revenue, and average spending per customer remained above the same month of the previous year, as it had in the previous period.」

「Unlike the two formats above, whose main products are ready-made suits, the order-only “DIFFERENCE” continued growing revenue without being affected by the COVID-19 pandemic and opened 12 new stores during the current fiscal year. To accommodate rising demand while maintaining quality and delivery times, it also laid the foundations for sustainable growth by adjusting the pace of store openings and expanding production capacity.」

「At “DIFFERENCE,” we began selling the “JAPAN FUKUSHIMA WOOL Made-to-Order Suit,” Japan’s first made-to-order suit using 100% domestically produced wool, by converting raw wool from sheep raised for meat into a usable resource to support the development of Fukushima Prefecture’s sheep-farming industry. We also worked to maintain and enhance brand value by providing official suit sets to “Nadeshiko Japan,” the Japan women’s national football team.」

「At “DIFFERENCE,” we entered areas where we had not previously opened stores, including Machida, Kokura and Omiya, with the aim of expanding our customer base and further increasing brand awareness.」

「At “DIFFERENCE,” we accelerated new-store openings, and stores located in department stores in particular are expanding the customer base.」

「At “DIFFERENCE,” we continued stable supply by leveraging our domestic production capabilities, expanded into department stores, mainly in areas where we had not previously opened stores, and increased sales of luxury fabrics, thereby increasing both the number of new customers and average spending per customer.」

「At “Konaka Menswear,” “Futata Menswear” and “SUIT SELECT,” formalwear performed well as demand for weddings, funerals and other formal occasions recovered. At “DIFFERENCE,” the company held a fair featuring Italy-made premium fabrics from Ermenegildo Zegna, successfully capturing demand for high quality, increasing the number of new customers and raising the average spend per customer.」

「Demand for the made-to-order business centered on “DIFFERENCE” remains strong. The “7DAYS ORDER” service, which uses the domestic production infrastructure established by the company to enable delivery in as little as one week, was well received by customers who prioritize delivery before events. The “AI SPEED ORDER” pattern-order service offered by “SUIT SELECT” also gained traction among young customers entering the workforce because of its clarity and simplicity.」

「At “DIFFERENCE,” we reached out to new customers preparing for coming-of-age ceremonies and job searches, as well as women, while increasing sales of premium imported fabrics, including the highly rare, original top-quality fabric “LIMITED WOOL PREMIUM” and luxury imported fabrics represented by Ermenegildo Zegna.」

「In addition to expanding DIFFERENCE into department stores, the pattern-order service “AI SPEED ORDER,” launched by “SUIT SELECT” in September last year, has become established among customers.」

「The following major facilities were newly established and completed during the cumulative third-quarter period under review. Segment Format (brand) Facility details Number of stores Fashion business DIFFERENCE Store equipment and other 6 stores」

「Orders for pattern-made garments through “AI SPEED ORDER” also remained solid. Together with the custom-order format “DIFFERENCE,” which is expanding its customer base, this enabled us to steadily capture rising demand for made-to-order suits.」

「The custom-order format “DIFFERENCE” also began a full-scale rollout in department stores and added a women’s version to the “D MEASURE” AI image-based sizing app.」

「As one of its strategic initiatives for the future, the company also launched the “AI SPEED ORDER” service, which uses an AI automatic-measurement app to enable made-to-order suits to be delivered in as little as 10 days.」

「DIFFERENCE Fukuya Hatchobori Main Store (Naka Ward, Hiroshima, Hiroshima Prefecture) Fashion business Store equipment and other April 2020」

「At the custom-order format DIFFERENCE, suits, accessories and other products developed in collaboration with the anime series “PSYCHO-PASS” were well received.」

「The custom-order format “DIFFERENCE” also worked on selling suits, accessories and other products developed in collaboration with the anime series “PSYCHO-PASS,” which were well received.」

「Under the custom-order format DIFFERENCE, the company expanded its ordering service using an AI-powered image-based sizing app from suits and shirts to a total of 8 items, including accessories.」

「The following major facilities that had been planned as of the end of the previous consolidated fiscal year were completed during the cumulative third quarter of the current consolidated fiscal year.」

「The custom-order format “DIFFERENCE” also expanded its ordering service using an image-based sizing app that makes full use of AI technology to a total of 8 items, including suits and shirts, and worked to improve services for customers.」

「The custom-order format “DIFFERENCE” also launched a new service in November using an image-based sizing app that makes full use of AI technology.」

「At the same time as opening new stores under the custom-order format “DIFFERENCE,” the company closed unprofitable suburban stores.」

「The custom-order format “DIFFERENCE” opened stores aggressively and reached 50 stores ahead of the original plan, but new-store opening costs increased accordingly.」

「The following major facilities that had been planned as of the end of the previous consolidated fiscal year were completed during the cumulative first quarter of the current consolidated fiscal year.」

「In addition to closing unprofitable stores, the Group actively opened new stores under the custom-order format, DIFFERENCE.」

「At “SUIT SELECT,” we continued opening stores aggressively and launched the new custom-order format “DIFFERENCE” during the current fiscal year. The Group opened 33 new stores in total: 22 SUIT SELECT stores, 2 紳士服コナカ stores, 5 DIFFERENCE stores, 2 FIT HOUSE stores, 1 franchised Katsuya restaurant, and 1 DonDonDown on Wednesday reuse and recycling store.」

「Business items, including made-to-order suits, performed well following the launch of the new “DIFFERENCE” format.」

「We will continue developing valuable products that combine high quality with outstanding design, further pursuing our principle that “everything starts with quality.” As part of our development of highly efficient store formats, including stores under the new custom-order format “DIFFERENCE,” we will implement further growth strategies aimed not only at meeting customer needs but also at creating new ones.」