Transition to a sustainable business model adapted to the new normal

「The company has launched a new medium-term management plan beginning with the fiscal year ending March 2025, in light of the full reopening of economic activity and its aim of actively promoting overseas expansion of its Goldwin brand.」

「The new medium-term management plan will continue the previous basic policy of achieving both business and environmental sustainability, while setting out a more concrete approach to global expansion under the Goldwin brand.」

「From December, amid a nationwide severe cold wave, stable supply of cold-weather products such as padded boots, which had experienced delivery delays the previous year due to Vietnam's lockdown, contributed to sales growth this year.」

「From late July, repeated infections among store staff due to the impact of the COVID-19 'seventh wave' placed some restrictions on proposal-based selling at directly operated stores, a key strength of the company. However, by establishing store-operating expertise for infection control, the company was able to continue operations without taking measures such as temporary closures in response to the spread of infection. From the latter half of August, the number of infections began to decline, and customer traffic, particularly at suburban stores, began to recover. As a result, sales for the six months ended 30 September were ¥45,309 million, up 18.6% year on year.」

「The demand-driven business model developed over many years through cooperation with materials manufacturers, wholesale customers and others demonstrated strength across the entire value chain, from sourcing raw materials to selling to customers, even amid unforeseen circumstances. As a result, operating profit was ¥2,266 million, up 99.6% year on year.」

「The group also maintained solid performance amid COVID-19 by developing attractive products selected by customers, centered on THE NORTH FACE, building a stable supply chain, and establishing balanced sales channels comprising directly operated stores, wholesale customers and e-commerce. Revenue for the consolidated fiscal year was ¥98,235 million, up 8.6% year on year.」

「E-commerce revenue also remained firm at 107% of the prior-year period. As a result, revenue for the nine months ended 31 December was ¥73,782 million, up 6.6% year on year.」

「Although the resurgence of COVID-19 infections from late July, the staging of the Tokyo 2020 Olympic and Paralympic Games without spectators, and nationwide adverse weather conditions affected directly operated store sales, particularly in urban areas, wholesale stores such as sporting-goods mass retailers and e-commerce sales provided support. By maintaining a balanced sales structure without relying on a single channel, sales for the six months ended 30 September were ¥38,208 million, up 21.1% year on year.」

「The company developed new customer segments for camping as an activity that avoids crowds and for casual wear while working from home, while also steadily capturing demand for outdoor sports such as golf and running. As a result, revenue was ¥17,078 million, up 40.0% year on year.」

「To pursue sustainable growth, the group formulated a 5-year medium-term management plan covering the fiscal years ending March 2022 through March 2026. To achieve both business resilience and environmental resilience, it intends to invest actively in growth areas while building a robust financial base that can respond flexibly to changes in customers and markets.」

「As a result, although the third quarter was affected by COVID-19, continued efforts to create new demand and tap existing demand kept the impact to a minimum and halted the trend of declining revenue. Revenue for the nine months ended 31 December was ¥69,226 million, down 8.7% year on year.」

「By capturing increased demand resulting from the new lifestyle, the company was able to limit the revenue decline compared with its initial outlook announced on 14 May. Even if the spread of infections subsides by the end of the year, the company expects it will take a considerable period for consumer demand to recover from the decline caused by weak inbound demand and lower consumer sentiment due to voluntary restrictions on going out. Accordingly, it has made accounting estimates, including impairment accounting for fixed assets, based on the assumption that the first quarter of the 70th fiscal year would mark the peak of the spread of infections, that signs of recovery would begin to emerge from the second quarter, and that the business would enter a recovery trajectory from the third to the fourth quarter.」

「For the fiscal year ending March 2021, the company's basic policy is to overcome the difficult environment caused by the spread of COVID-19, transition to a sustainable business model adapted to the new normal expected to emerge after the emergency ends, and advance initiatives to build the foundation for its growth strategy.」