Building Customer Loyalty in the Beauty Business through More Efficient Promotions, Training and Store Development

「In the beauty business, revenue declined owing to the impact of optimising operating resources and closing unprofitable stores in the previous fiscal year. However, profit improved substantially as the Company improved its sales mix through price revisions and enhanced service menus. In addition, more efficient store operations, an increase in franchise stores and tighter purchasing controls further strengthened the earnings base and contributed to improved profit.」

「Profitability improvement in the beauty business」

「In the beauty business, the Company reduced the number of stores by 8 year on year by closing unprofitable stores to make more effective use of operating resources. In response to changes in the customer demographics of store areas, it converted store formats by leveraging its strength in offering diverse salon formats, and promoted the optimisation of its operating structure, including by proposing franchising to employees seeking independence.」

「In the beauty business, revenue was ¥971 million, up 0.2% year on year, despite the closure of unprofitable stores in the previous fiscal year and the resulting reduction of 2 stores from the previous period, partly because average customer spend increased through the introduction of an appointment system for specific staff and menu proposals. In terms of earnings, segment profit was ¥1 million, down 88.6% year on year, partly because personnel expenses increased as the Company strengthened graduate recruitment. The beauty business will continue working to improve per-person productivity and restore the number of store visitors, while reviewing advertising by business format and brand to acquire customers more effectively. It will also continue converting store formats and considering new business formats to strengthen profitability.」

「In the beauty business, revenue was ¥1,960 million, down 1.6% year on year, partly because the number of customers declined slightly as COVID-19 cases increased toward the end of December, in addition to the closure of 7 unprofitable stores from the previous fiscal year. In terms of earnings, segment profit improved to ¥20 million, compared with a segment loss of ¥51 million in the previous fiscal year, owing to improved profitability from closing unprofitable stores, higher productivity through appropriate staffing and a review of certain expenses.」

「In the beauty business, revenue was ¥1,500 million, down 1.9% year on year, partly because the number of customers declined slightly as COVID-19 cases increased toward the end of December, in addition to the closure of 7 unprofitable stores from the previous period. In terms of earnings, segment profit improved to ¥29 million, compared with a segment loss of ¥27 million in the previous period, owing to improved profitability from closing unprofitable stores, higher productivity through appropriate staffing and a review of certain expenses.」

「The beauty business is seeking to improve earnings by converting store formats to increase sales in response to changes in customer demographics and improving service prices through the introduction of high-value-added new menus. It is also strengthening efforts to increase repeat visitors through measures including an appointment system for specific staff and thorough customer consultations.」

「The beauty business is working to strengthen profitability by improving service prices and introducing high-value-added new menus, while continuing to close unprofitable stores and consider new business formats.」

「The beauty business will continue working to reduce operating costs. From the second half of the current fiscal year, beauty salons will introduce a new menu adding spa treatments to cut-and-colour services, while nail salons will introduce new facial-care menus in addition to foot- and hand-care menus, as the Company promotes the development of new menus that meet customer needs. It has also opened new stores combining nail and beauty salon services and will work to improve profitability.」

「The beauty business will continue working to reduce operating costs. From the current quarter, beauty salons have introduced a new menu adding spa treatments to cut-and-colour services, while nail salons are introducing new facial-care menus in addition to foot- and hand-care menus, as the Company promotes the development of new menus that meet customer needs. It is also planning to open new stores combining nail and beauty salon services and will work to improve profitability.」

「In the beauty business, the Company worked to control costs, including through strict management of work schedules in line with reservation levels, in response to the slowing recovery in store visitors caused by prolonged restrictions on going out during the COVID-19 pandemic. It also closed unprofitable stores from the previous fiscal year to strengthen its earnings structure. In the first half of the current fiscal year, revenue was ¥1,011 million, down 3.1% year on year, partly reflecting the impact of having 11 fewer stores than in the first half of the previous fiscal year. In terms of earnings, although closing unprofitable stores improved profitability, the transfer of certain fixed costs to extraordinary losses decreased by ¥138 million from the first half of the previous fiscal year, resulting in a segment loss of ¥32 million, compared with segment profit of ¥19 million in the previous period. The beauty business will continue working to reduce operating costs while reviewing its existing service menu. The Company has decided to introduce new menus adding value to cut-and-colour services at beauty salons, and new facial-care menus in addition to foot- and hand-care menus at nail salons, and will work to improve profitability by developing new menus that meet customer needs.」

「The Company is controlling costs by maintaining strict reservation management to prevent infections and by managing work schedules in line with reservation levels. It is also working to improve earnings by closing unprofitable stores while strengthening product sales.」

「Although the beauty business was affected by temporary closures and reduced operating hours in response to the state of emergency, revenue benefited from higher sales at 株式会社Ｌ.Ｂ.Ｇ, which became a consolidated subsidiary from the third quarter of the previous fiscal year. Revenue was ¥1,043 million, up 7.3% year on year, while segment profit was ¥19 million, down 11.4%. After the state of emergency was lifted, the Company gradually extended operating hours while strengthening infection-prevention measures, including thorough hygiene management at stores and among employees and strict reservation management, and operations remained on a recovery trend.」

「Since the lifting of the state of emergency, the Company has continued operating while strengthening infection-prevention measures, including thorough store disinfection and ventilation, staff health management, hand sanitisation, mask-wearing and reservation management. Although progress has varied by region, operations have remained on a recovery trend.」

「In terms of earnings, in addition to the contribution from 株式会社みうら, efforts to reduce fixed costs such as rent and promotional expenses in the existing beauty business resulted in segment profit of ¥29 million, up 245.8% year on year.」

「In terms of earnings, in addition to the contribution from 株式会社みうら, which became a subsidiary in the second quarter of the previous fiscal year, efforts to reduce fixed costs such as rent and promotional expenses resulted in segment profit of ¥22 million, compared with a segment loss of ¥9 million in the previous period, restoring the business to profitability.」

「In terms of earnings, partly as a result of lower fixed costs associated with the reduction in the number of stores in the existing beauty business and efforts to reduce promotional expenses, the segment posted a loss of ¥1 million, compared with a segment loss of ¥6 million in the previous period.」

「In addition to opening street-front stores under existing brands, the Company opened a new low-price salon brand, “Cut & Color AY,” in developer-operated locations, reaching the stage where it had established the structure needed to expand its store-opening footprint and increase revenue going forward.」

「The Company closed 13 stores in the previous fiscal year and 3 stores in the first half of the current fiscal year, resulting in revenue of ¥1,547 million, down 6.7% year on year. However, in the third quarter, it opened 2 new stores in the Kanto region to build a new earnings model after completing the rationalisation of unprofitable stores. In terms of earnings, average spend improved as a result of strengthening technical training for staff and improving the efficiency of promotional activities, while efforts to reduce administrative costs resulted in segment profit of ¥35 million, up 88.0% year on year.」

「Sales were ¥1,022 million, down 6.9% year on year, following the closure of 13 unprofitable stores in the previous fiscal year. Sales at existing stores were 99.9% of the previous year, indicating that the ongoing decline in customer numbers had been brought under control. In terms of earnings, average spend improved as a result of enhanced technical training for staff and more efficient promotional activities, and efforts to reduce administrative costs resulted in segment profit of ¥22 million, compared with a segment loss of ¥4 million in the same quarter of the previous year.」

「Sales were ¥511 million, down 7.5% year on year, following the closure of 13 unprofitable stores in the previous fiscal year. In terms of earnings, customer numbers and average spend improved as a result of enhanced technical training for staff and more efficient promotional activities, resulting in segment profit of ¥10 million, compared with a segment loss of ¥3 million in the same quarter of the previous year.」

「Although the number of store visitors and average customer spend improved, the current period was affected by the closure of 13 unprofitable stores, among other factors,」

「Going forward, we will strengthen staff training and education at the training centre established in the previous second half to improve productivity at existing stores where staffing has been secured, and will work to improve staff technical skills and customer-service standards.」

「Going forward, to improve productivity at existing stores where staffing has been secured, we will strengthen staff training and education at the training center established in the second half of the previous fiscal year and work to improve staff technical skills and customer service levels.」

「In the Beauty business, amid a difficult operating environment in which the number of competing stores continues to increase, we worked to strengthen customer acquisition by improving the efficiency of promotional activities such as direct mail, strengthening training to improve staff technical and service skills at the training center established in the second half of the previous fiscal year, and developing stores where customers can spend time comfortably.」