Withdrawal and Review of the Five-Year Medium-Term Management Plan

「Working backward from our long-term targets, we have formulated a three-year plan to achieve them. Throughout the mid-term management plan period, we will pursue expansion of our business domains and markets, using enhanced brand value as leverage, as well as new growth strategies and M&A. For the final year, the fiscal year ending February 2028, we have set quantitative targets of revenue of ¥70.0 billion, an operating profit margin of 7.1%, and ROE of 10.7%.」

「Under these circumstances, our group is working diligently to achieve the plan for the current fiscal year, the final year of the Medium-Term Management Plan covering the fiscal years ending February 2023 through February 2025. In addition to continuing business structural reform, we are also focusing on the fundamental strengthening of product capabilities and sales capabilities.」

「This consolidated fiscal year is the second year of the mid-term management plan announced on 14 April 2022. While continuing to work on improving the gross profit margin and controlling selling, general and administrative expenses excluding expenses for investments in human resources and other items, and striving for further KPI improvements, we completed the e-commerce platform renewal in September. At physical stores, we opened new stores, improved the store environment, and strengthened advertising and sales promotion activities, actively pursuing measures to expand revenue toward achievement of the final-year targets.」

「The current fiscal year is the second year of the Medium-Term Management Plan announced on 14 April 2022. While continuing efforts to improve the gross profit margin and control selling, general and administrative expenses, we completed the renewal of the e-commerce platform in September and are also opening new physical stores and renovating existing ones. We are actively pursuing sales expansion measures to achieve the targets for the final year.」

「This is the second year of the mid-term management plan announced on 14 April 2022. In addition to securing revenue, we have continued to work on improving the gross profit margin and controlling selling, general and administrative expenses. As investment to put the company on a growth trajectory, we are also actively pursuing the renewal of the e-commerce platform, new store openings, and renovations of existing stores.」

「This is the second year of the mid-term management plan announced on 14 April 2022. In addition to securing revenue, we are continuously working to improve the gross profit margin and control selling, general and administrative expenses in order to build a more stable earnings base. As investment to put the company on a growth trajectory, we are also actively pursuing the renewal of the e-commerce platform, new store openings in areas and facilities where we have not previously operated stores, and renovations of existing stores.」

「② Progress under the Mid-Term Management Plan In the first year, the fiscal year ending February 2023, we secured revenue above plan as customer traffic recovered at department stores and directly operated stores, our main sales channels, and occasionwear and core cold-weather apparel such as coats and down jackets sold well as opportunities to go out increased.」

「Working-capital controls, including inventory management, are now on track, and we have also promoted full-price sales, achieving an improvement in the gross profit margin. We have gradually increased our focus on advertising and branding, and operating cash flow is steadily improving as revenue and gross profit increase.」

「We made a strong start in executing the Medium-Term Management Plan announced on 14 April 2022, covering the fiscal years ending February 2023 through February 2025. We achieved operating profitability in the first quarter, substantially reduced the operating loss in the second quarter compared with the fiscal year ended February 2022, and are progressing steadily toward achieving the full-year plan.」

「As of the end of May 2022, the company had completed the refinancing of ¥800 million in long-term borrowings and ¥5.0 billion in short-term borrowings from financial institutions. The company achieved a smooth start to the execution of the Mid-Term Management Plan for the fiscal years ending February 2023 through February 2025, announced on 14 April of this year, achieving operating profitability in the first quarter and reaching a position in which the likelihood of achieving its full-year operating profit target has increased.」

「The Group announced its Mid-Term Management Plan (fiscal year ending February 2023 to fiscal year ending February 2025), whose final year is the fiscal year ending February 2025.」

「In addition, we steadily advanced the Rebirth Plan announced in 2020. Processes for procuring necessary products on a timely basis have become established, while centralized control of purchasing authority has enabled us to reduce procurement spending and inventories. We reduced the cost ratio, substantially curtailed markdown sales and improved the gross profit margin to an appropriate level, minimizing the decline in gross profit even as net sales fell because of the impact of COVID-19. We also substantially reduced selling, general and administrative expenses through the voluntary retirement program implemented during the first quarter, and steadily improved operating cash flow.」

「Using revenue of ¥52.0 billion, an operating profit margin of 10%, a gross profit margin of 55%, and a selling, general and administrative expense ratio of 45% for the fiscal year ending February 2025 as basic guidelines, we aim to achieve these targets by improving KPIs through the continued structural reform measures implemented under the Recovery Plan, or organic growth, together with the effects of our growth strategy initiatives.」

「Progress under the Recovery Plan currently being implemented has already included establishing a working-capital management method through reductions in purchased inventory, a plan to reduce selling, general and administrative expenses, and the consolidation and closure of stores with low sales productivity per unit of floor space. We aim to achieve sustained operating profitability from the following consolidated fiscal year onward.」

「Progress under the Recovery Plan currently being implemented has already included establishing a working-capital management method through reductions in purchased inventory, a plan to reduce selling, general and administrative expenses, and the consolidation and closure of stores with low sales productivity per unit of floor space. We aim to achieve sustained operating profitability from the following consolidated fiscal year onward.」

「We will steadily implement each measure toward our goal of achieving operating profitability in the fiscal year ending February 2022.」

「The company is currently developing a new management plan and believes that its steady execution will enable it to achieve sustained operating profitability and resolve material events and other matters related to the going-concern assumption. It has determined that no material uncertainty related to the going-concern assumption is recognized.」

「Against this operating backdrop, our group undertook various proactive measures aimed at realizing the Sanyo Innovation Plan 2017 and “Regarding Our Future Growth Strategy,” including marketing investments to increase net sales, strengthening e-commerce channels, and digital investments to advance digitalization across the business.」

「Against this operating backdrop, our group undertook various proactive measures aimed at realizing the Sanyo Innovation Plan 2017 and “Regarding Our Future Growth Strategy,” including marketing investments to increase net sales, strengthening e-commerce channels, and digital investments to advance digitalization across the business.」

「In light of performance progress through the second quarter, we announced Our Future Growth Strategy, including revisions to the quantitative plan for the second year of the management plan.」

「Against this backdrop, the Group is pursuing business structural reform and a growth strategy. Across the company, we will pursue further efficiencies and implement proactive measures to secure revenue and return to a growth trajectory, including additional investment in e-commerce as a growth channel and marketing investment in advertising and sales promotion for existing businesses, which had previously been restrained.」

「Against this backdrop, the Group has pursued the steady execution of the New Management Plan Sanyo Innovation Plan 2017, announced externally on 14 February 2017.」

「Against this backdrop, based on the three-year management plan Sanyo Innovation Plan 2017 announced by the Group in 2017, we have implemented specific measures to pursue business structural reform and a growth strategy.」

「Our Group announced a “New Management Plan” in February and is promoting business structural reforms and growth strategies. We will pursue further efficiency improvements across the organization, implement merchandising reforms, and advance measures to increase gross profit in absolute terms and as a percentage of sales.」

「Against this backdrop, the Group announced its New Management Plan on 14 February 2017 to pursue business structural reform and a growth strategy. Going forward, we will pursue further efficiencies across the company, implement merchandising reforms, and advance measures to improve gross profit in both amount and margin. As measures to improve the top line, we also intend to strengthen the business with a sense of urgency by expanding existing businesses, developing new businesses including through M&A, and further accelerating growth in e-commerce.」

「Going forward, we will pursue further efficiencies across the company, implement merchandising reforms, and advance measures to improve gross profit in both amount and margin. As measures to improve the top line, we also intend to strengthen the business with a sense of urgency by expanding existing businesses, developing new businesses including through M&A, and further accelerating growth in e-commerce.」

「In the “Sanyo Innovation Plan 2017,” announced as the new management plan on 14 February 2017, the Group set out the following Vision/Mission and regards implementing initiatives to achieve them as its immediate management priority.」

「To promote business structure reform and its growth strategy, the Group will announce an overview of its new management plan. It will implement a range of initiatives across the organization without being bound by precedent.」

「We announced on 29 July 2016 that we would withdraw the medium-term five-year management plan and are currently reviewing it. Accordingly, the management vision and management policies in item (i) below are also scheduled to be changed at a later date.」