Further Strengthening of Product Planning Functions

「Organizationally, we transferred the EC team to the Product Planning Division and established a structure capable of responding quickly to consumer needs. This will accelerate the planning and development of attractive products, with the aim of expanding EC sales and improving margins.」

「The sharp depreciation of the yen and rising raw material prices caused significant concern over higher costs for in-house planned products manufactured overseas under contract, but timely selling-price increases kept the gross margin at 26.3%, unchanged from the previous fiscal year.」

「Although we shifted toward higher-priced products with greater added value and revised prices when introducing new products, the gross margin declined 0.4 percentage points year on year to 26.3% as sales to dollar stores, which have a superficially low margin, increased and the weaker yen significantly raised the cost of sales for in-house planned products manufactured overseas.」

「Although the weaker yen increased the cost of sales, the shift toward high-value-added products and our high-turnover business model, in which we rapidly commercialize products from proposals through planning, design, production and logistics, contributed to price revisions, enabling us to maintain the gross margin at 27.0%, unchanged year on year.」

「In the consolidated fiscal year, we continued to advance the series of initiatives pursued over the past several years: transforming SHOBIDO into a true manufacturer, developing No. 1 products in niche categories, and implementing measures to gain market share.」

「We launched an initiative to promptly feed POS and in-store information obtained from each company back to our internal product planning section and accelerate commercialization.」

「We feel that the initiatives we have continued through the previous fiscal year, including the selection and concentration of SKUs and business partners, the shift from sourced products to products planned in-house, fixed-cost reductions, faster decision-making through a major organizational overhaul, and strengthening the management foundation centered on reviewing personnel and compensation systems, together with the development of in-house planned products such as cosmetics, cosmetic accessories and hygiene products, are steadily beginning to produce results.」

「We feel that the initiatives we have continued through the previous fiscal year, including the selection and concentration of SKUs and business partners, the shift from sourced products to products planned in-house, fixed-cost reductions, faster decision-making through a major organizational overhaul, and strengthening the management foundation centered on reviewing personnel and compensation systems, together with the development of planned products such as cosmetics, cosmetic accessories and hygiene products, are steadily beginning to produce results.」

「Combining our planning capabilities with BD's manufacturing expertise will enable us to create more attractive products than before. In addition, adding manufacturing facilities for cosmetics and quasi-drugs to our Group is expected to further strengthen our OEM business.」

「Our Group is actively working to expand sales of products planned in-house by strengthening coordination between the sales and product planning divisions and establishing planning teams by product category, thereby improving quality, price competitiveness and planning capabilities.」

「Specifically, while further enhancing our ability to make proposals to customers by converting sales representatives into merchandisers, an initiative we have pursued for some time, we are strengthening the structure for OEM and custom products, for which demand from business partners is high and stable earnings are expected. We are also working to further strengthen our manufacturing capabilities by gradually increasing the number of merchandisers and designers, while undertaking initiatives to enhance brand value.」

「For OEM and custom products, for which demand from business partners is high, we renamed the Special Sales Department established two fiscal years ago as the OEM Division, increased its staffing and established a structure to strengthen order intake. In addition to expanding the OEM expertise across more items and business partners, we plan to gradually increase the number of merchandisers and designers to strengthen our manufacturing capabilities.」

「In addition to the strong sales capabilities we have built as a wholesaler, in recent years our Group has continued working to strengthen its ability to quickly plan and develop products that meet customer needs. Specifically, while further enhancing our ability to make proposals to customers by converting sales representatives into merchandisers, an initiative we have pursued for some time, we established a Special Sales Department to expand our capacity to accept orders for OEM and custom products, for which demand from business partners is high.」