Strengthening Self-Managed Sales Areas and Directly Operated Stores

「By category, hard goods and footwear performed well, with new lines getting off to a stronger-than-planned start alongside the expansion of directly operated stores.」

「ハードグッズおよびフットウエアは、新規ラインの立ち上がりが計画を上回り、直営店の拡充とあわせて順調に推移いたしました。」

「Its core brand, THE NORTH FACE, recorded sales above the same period of the previous year in both apparel and gear, as demand recovered, particularly at directly operated stores.」

「The easing of activity restrictions boosted sales across many brands, while the recovery in inbound demand in particular led to strong sales at directly operated stores.」

「As sports activities restricted during the COVID-19 pandemic resumed and inbound tourism recovered, customer traffic to physical stores such as department stores, select shops and outlet malls increased across the group. Sales therefore performed well at both directly operated stores and wholesale customers, with sales of ¥23,150 million, up 9.7% year on 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.」

「In October last year, the company further strengthened coordination with directly operated stores, including by opening THE NORTH FACE MOUNTAIN EC Site, an e-commerce site focused on technical mountain products. Despite continued uncertainty during the COVID-19 pandemic, the e-commerce sales ratio, set as a KPI in the medium-term management plan, reached 13.4% for the consolidated fiscal year, while company-managed sales reached 61%, both above the first-year targets.」

「Although the recovery in customer traffic at urban stores has taken time as inbound demand has yet to return, the customer base at suburban stores has broadened, particularly among families, and sell-through at full price progressed. As a result, the gross margin was maintained at 53.7%, roughly in line with the same period of the previous 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.」

「Sales trends in major cities remained challenging, as up to 77 of the 161 directly operated stores were temporarily closed during the fiscal year, following the previous fiscal year, in connection with the application of priority preventive measures and states of emergency in major cities. Meanwhile, suburban stores drove directly operated store sales, and the company maintained a balanced sales structure combining e-commerce and wholesale sales to sporting-goods mass retailers and other customers.」

「For the consolidated fiscal year, sales were ¥90,479 million, down 7.6% from the previous fiscal year, operating income was ¥14,838 million, down 15.1%, ordinary income was ¥15,984 million, down 2.4%, and net income attributable to owners of the parent was ¥10,734 million, down 0.3%.」

「As the shift to teleworking and the decline in tourists delayed the recovery of sales at urban stores, regional stores performed well at both directly operated and wholesale locations.」

「Following the lifting of the state of emergency, all directly operated stores had resumed operations by June. Recovery was particularly pronounced at suburban stores, driven mainly by families, while stores in central Tokyo remained below pre-COVID levels because inbound demand and demand from visitors to urban areas had not recovered.」

「Between late March and late May, up to 150 of the 155 directly operated stores were temporarily closed. From late May, however, stores reopened earlier than initially forecast, and all stores had resumed operations by June.」

「Company-managed sales through directly operated stores and e-commerce expanded, while reductions in sales losses through tighter order and inventory-flow controls and an improved full-price sales ratio brought the gross margin to 53.5%.」

「Although consolidated revenue was affected by the consumption tax rate increase in October and the mild winter, product and sales policies centered on in-store execution proved effective, and strong performance continued, led by The North Face brand. In addition, in-store sales of the Canterbury brand remained strong after the Rugby World Cup 2019 Japan ended, resulting in consolidated revenue increasing substantially by ¥12,136 million year on year.」

「For the six months ended 30 September 2019, the group's operating performance, comprising the company, its consolidated subsidiaries and equity-method affiliates, reflected the expansion of company-managed sales through directly operated stores and e-commerce, reductions in sales losses such as returns and discounts, and gross-margin improvement from a lower procurement cost ratio. Sales were ¥41,168 million, up 23.2% year on year, operating income was ¥5,537 million, up 77.0%, ordinary income was ¥5,292 million, up 94.8%, and net income attributable to owners of the parent was ¥3,597 million, up 130.0%.」

「Sales were ¥18,074 million, up 22.0% year on year, operating income was ¥1,902 million, up 61.7%, ordinary income was ¥1,946 million, up 81.9%, and net income attributable to owners of the parent was ¥1,375 million, up 133.8%, reflecting the expansion of company-managed sales through directly operated stores and e-commerce, reductions in sales losses such as returns and discounts, and gross-margin improvement from a lower procurement cost ratio.」

「For the nine months ended 31 December 2018, the performance of the group, comprising the company, its consolidated subsidiaries and equity-method affiliates, reflected the expansion of company-managed sales through directly operated stores and e-commerce, reductions in sales losses such as returns and discounts, and gross-margin improvement from a lower procurement cost ratio. Sales were ¥63,706 million, up 23.0% year on year, operating income was ¥11,617 million, up 78.4%, ordinary income was ¥11,570 million, up 72.2%, and net income attributable to owners of the parent was ¥7,612 million, up 65.4%.」

「For the six months ended 30 September 2018, the performance of the group, comprising the company, its consolidated subsidiaries and equity-method affiliates, reflected the expansion of company-managed sales through directly operated stores and e-commerce, reductions in sales losses such as returns and discounts, and gross-margin improvement from a lower procurement cost ratio. Sales were ¥33,405 million, up 16.2% year on year, and operating income was ¥3,128 million, up 123.2%.」

「Consolidated sales increased significantly year on year, as sell-through of spring/summer products from outdoor-related brands such as THE NORTH FACE and Helly Hansen performed extremely well, centered on directly operated stores.」

「Sales of the outdoor-related brands THE NORTH FACE and Helly Hansen performed extremely well throughout the spring/summer and fall/winter seasons, particularly with steady growth in directly operated store sales, resulting in a significant year-on-year increase in sales.」

「Operating profit increased significantly as gross profit rose on higher sales, company-managed sales including those through directly operated stores and the web expanded, sales losses declined through tighter control of order and inventory flows, and the full-price sales ratio improved. The gross margin rose by 2.4 percentage points.」

「During the six months ended 30 September, sales increased significantly as sell-through of spring/summer products from outdoor brands such as THE NORTH FACE and Helly Hansen was extremely strong, centered on directly operated stores, while advance sales also progressed steadily following the early launch of fall/winter products.」

「Operating income increased by ¥781 million year on year, as gross profit rose on higher sales, retail sales through directly operated stores and the web expanded, sales losses such as returns and discounts declined, and the procurement cost ratio fell. These factors improved the gross margin by 3.1 percentage points and significantly increased gross profit, more than offsetting the increase in selling, general and administrative expenses, including directly operated store-related costs.」

「Consolidated sales increased significantly from the previous fiscal year, as sales of the outdoor-related brands THE NORTH FACE and Helly Hansen performed extremely well throughout the spring/summer and fall/winter seasons, particularly with steady growth in sales at directly operated stores.」

「Operating profit increased significantly as gross profit rose on higher sales, retail sales through directly operated stores and the web performed well, sales losses were reduced through thorough control of order and inventory flows, inventory was optimized and other efficiency measures progressed, and procurement costs were reduced. The gross margin improved by 2.1 percentage points.」

「Although the transfer of the Champion business at the end of the previous fiscal year resulted in lower sales, this was offset by strong sales of spring/summer products from outdoor brands, including THE NORTH FACE and Helly Hansen, centered on directly operated stores, as well as generally solid sales of the Canterbury and Black & White brands. Sales therefore increased by ¥430 million year on year.」

「Although the transfer of the Champion business at the end of the previous fiscal year resulted in lower sales, this was more than offset by strong sales of outdoor brands, including THE NORTH FACE and Helly Hansen, centered on directly operated stores, and continued solid performance by the Canterbury brand. As a result, sales increased by ¥661 million year on year.」

「We will strengthen our retail capabilities, increase directly operated stores' share of consolidated sales, gather consumer needs both directly and indirectly, and actively make creative proposals.」