Stabilizing the Financial Position through Improvements in Business Profitability and Reductions in Head Office Expenses

「On the revenue side, we implemented measures to increase customer traffic and average spend per customer, while on the expense side, we focused on maintaining an appropriate cost of sales and controlling labor costs. Specifically, we improved the cost ratio through flexible menu changes, changed operating hours to concentrate operations during more profitable periods, and optimized staffing according to each store’s workload and time of day」

「Selling, general and administrative expenses improved year on year as the ongoing review of the cost structure progressed and labor-cost management improved through the review of the store operating structure.」

「First, to improve earnings, we are working to optimize the cost ratio and improve operational efficiency. By thoroughly managing labor hours and other workloads, we are pursuing greater operating efficiency, improved profit margins and reduced cash outflows.」

「At our じんべえ太郎 brand, we aim to operate stores that are easy for customers to use through proprietary product development, operational design and pricing strategies.」

「First, to improve business profitability, we are reforming the profit-and-loss structure of our stores. Specifically, at じんべえ太郎, our original popular sushi bar format, we incorporate customer feedback and information on competing restaurants into menu proposals and methods of serving drinks. By having all store staff work together to operate stores that customers can consistently enjoy and by continuing to refine the format, we are working to secure earnings. We are also working to revitalize stores and improve their profitability by rolling out the essence of these initiatives horizontally across our existing formats.」

「First, we are reforming the profit-and-loss structure of our stores to improve business profitability. Specifically, we are implementing basic measures one by one, including improving customer attraction by increasing in-store visibility at existing locations, reviewing average spend per customer, and improving operational efficiency. For cost improvements, we are enforcing detailed cost awareness and reviewing promotional activities.」

「First, to improve business profitability, we are reforming the profit-and-loss structure of our stores. Specifically, during the second quarter accounting period, we converted three approximately 120-tsubo 日本海庄や restaurants into the じんべえ太郎, VANSAN and FURDI formats and reopened them, as in the Musashi-Urawa project. We will continue to restructure our business portfolio while implementing measures to revitalize existing brands, including partial renovations to make stores easier for customers to enter and create a stronger sense of integration with the seating area. For cost improvements, we are introducing a new procurement system and continuously reviewing utility costs and promotional activities.」

「For cost improvements, we are introducing a new procurement system and undertaking a fundamental review of promotional activities. We are also responding to changes in customer behavior following the COVID-19 pandemic by leveraging the station-front locations of existing stores and converting them to the VANSAN and じんべえ太郎 formats, which have performed well in the post-pandemic period. In addition, we are planning renovations to the façades of existing brands to make customers want to enter the stores.」

「Regarding cost improvements, the Company is reviewing its procurement system and fundamentally reviewing its promotional activities. It is also responding to changes in customer behavior following the pandemic, making use of the station-front locations of existing stores, working to change formats to VANSAN and じんべえ太郎, which have performed well in the post-pandemic period, and planning to renovate the facades of existing brands to make customers want to enter the stores.」

「As a second measure, in its izakaya business, the Company is changing formats to its own brands and opening new formats using subsidies. Specifically, it aims to revitalize its existing brands 庄や and 日本海庄や, change formats to its own brand じんべえ太郎, and review its single-business portfolio by newly opening Italian Kitchen VANSAN using the Small and Medium Enterprise Business Restructuring Subsidy.」

「Specifically, as part of the revitalization of existing stores and a review of its single-business portfolio, the Company plans to change business formats to VANSAN and じんべえ太郎 while using business restructuring subsidies and other programs.」

「To resolve these circumstances, the Group has formulated medium- to long-term business and funding plans and is implementing measures under those plans to stabilize cash management, improve business profitability, and fundamentally improve head-office and store operating costs through business restructuring.」

「To resolve these circumstances, the Group has formulated medium- to long-term business and funding plans and is implementing measures under those plans to stabilize cash management, improve business profitability, and fundamentally improve head-office and store operating costs through business restructuring. To stabilize cash management, the Group is using long-term, low-interest loans from government-affiliated and private financial institutions and working to build up and maintain cash levels to secure working capital. In the previous fiscal year, it also implemented business restructuring aimed at improving business profitability and fundamentally improving head-office and store operating costs, and operates with a staffing structure aligned with its business scale while reviewing the number of operating stores. In addition to reducing store operating costs by requesting rent reductions from the owners of the properties where its stores are located, the Group has set target amounts for head-office costs and is considering and implementing expense reductions. As a result, during the cumulative second-quarter consolidated period, both cash flow from operating activities and cash flow from financing activities were positive.」

「In the previous fiscal year, the Company implemented business restructuring aimed at improving business profitability and fundamentally improving head-office and store operating costs, and it operates with a staffing structure aligned with its business scale while reviewing the number of operating stores. In addition to reducing store operating costs by requesting rent reductions from the owners of the properties where its stores are located, the Company has set target amounts for head-office costs and is considering and implementing expense reductions.」

「As a result, by the end of March 2021, the Company had completed the closure of 27 stores, approximately half of its stores, and, in line with the reduced business scale, solicited voluntary retirements as a difficult but necessary decision and implemented them substantially as planned. In addition, the Company advanced cost reduction measures, including thorough management of targets for tenant rent reductions and other general expenses.」

「As a second measure, the Company is implementing business restructuring aimed at improving business profitability and fundamentally improving head-office and store operating costs. Specifically, as described in the notice dated 14 January 2021 regarding store closures and the solicitation of voluntary retirements, the Company has closed stores and adjusted its staffing structure to match the reduced scale of its operations.」

「The Company has implemented measures including expense reductions, such as rent reductions, reductions in directors' remuneration, closures of unprofitable stores, and the use of employment adjustment subsidies.」

「In addition to reducing store operating costs through more efficient labor costs by appropriately allocating employees and requesting rent reductions from the owners of the properties where its stores are located, the Company has set target amounts for head-office costs and is considering and implementing expense reductions.」

「To resolve these circumstances, the Company is implementing measures including improving business profitability and reducing head-office costs, with the aim of stabilizing its financial position.」