Transition to Joint Procurement and Joint Logistics with Lawson

「As of the date of filing of this annual securities report, Lawson does not hold any shares in our company, and our company does not hold any shares in Lawson.」

「Our company and Lawson, Inc. (hereinafter, “Lawson”) entered into a business alliance agreement on 29 August 2025. Under applicable laws and regulations, we will continue our business cooperation as before, including the joint development and procurement of products, sharing of store development information, joint sales-promotion campaigns, reciprocal use of logistics infrastructure, and the operation of Lawson-Poplar stores.」

「The Group operates primarily through the Smart Store business, in which it operates stores under the Poplar and Seikatsu Saika brands as a convenience-store franchisor, and the Lawson-Poplar business, in which it operates stores under the Lawson-Poplar or Lawson brands under a mega-franchise agreement with Lawson, Inc.」

「During the three months ended 31 May, stores under the Lawson-Poplar or Lawson brands opened, and the Lawson-Poplar business entered its full-scale operating phase.」

「To further expand the scale of the business, establish an efficient store operating structure, develop community-based convenience stores that leverage each company's strengths, and operate stores suited to changes in the social environment and local needs, the purpose of this agreement is to transfer certain rights and obligations attributable to our convenience-store business, through a company split in the form of a simplified absorption-type company split, to Poplar Retail Co., Ltd., established as our wholly owned subsidiary, and Lawson, and to conduct a joint business based on the conclusion of mega-franchise agreements with Poplar Retail and Lawson.」

「During the three months ended 31 May, we transferred all shares in Lawson San'in Co., Ltd. and therefore excluded the company from the scope of equity-method accounting. Although we have sold our shares in Lawson San'in, our relationship with Lawson remains unchanged, and we will continue to cooperate in various areas.」

「In these circumstances, we determined that it would be best to shift from our position as a joint business operator to specialising in supplying Popben boxed meals to Lawson-Poplar stores and participating indirectly in the San'in business, and decided to transfer these shares.」

「Our company and Lawson, Inc. (hereinafter, “Lawson”) have promoted initiatives including raw-material procurement, joint procurement of products, the reciprocal use of logistics infrastructure, and the rollout of dual-brand stores in the San'in region. To further strengthen the business alliance between the two companies and improve its effectiveness, on 30 June we issued new shares through a third-party allotment to Lawson and our representative director, Meguro Toshiharu (目黒 俊治).」

「Our company and Lawson have promoted initiatives including the joint procurement of raw materials and products, the reciprocal use of logistics infrastructure, and the rollout of dual-brand stores in the San'in region. Going forward, we will further strengthen these initiatives and jointly promote the development of micro-markets using the Poplar and Seikatsu Saika brands, as well as store expansion suited to diverse operating formats.」

「Going forward, in addition to further promoting the joint procurement of products and raw materials undertaken to date, we will promote the phased standardisation of the store and delivery infrastructure held by both companies and establish a highly efficient store operating structure that benefits from economies of scale.」

「The transition to joint procurement and joint logistics with Lawson for dry grocery products has been completed across all regions. Sales benefits from the new assortment, particularly general merchandise, are beginning to emerge.」