Risk of sluggish sales due to adverse weather

「However, in September, when the autumn products for stole and muffler sales were launched, temperatures were high and typhoons making landfall significantly affected sales, although」

「For scarves and mufflers, silk products performed well throughout the year. Although the start of the autumn/winter season generated new sales through active participation in special invitation events for department-store clienteling customers, the impact of the warm winter was substantial, and the November-December peak season was difficult overall.」

「The company's Nicolai Bergmann-brand all-weather umbrellas, classified in the scarf category and which had performed well in recent years, struggled due to unsettled weather and sluggish replacement demand, bringing sales to 82.0% of the prior-year level.」

「For scarves and mufflers, silk scarves and the Nicolai Bergmann all-weather umbrellas classified in our scarf category continued to perform well at the beginning of the second quarter, as they had the previous year. Silk scarves and products related to Respect for the Aged Day also performed well at the start of the autumn season, but sales were 98.2% of the previous year due to the delayed launch of stole products and weak demand caused by the extremely hot weather.」

「Temperatures from October to December remained higher than usual, slowing sales of winter goods such as heavy clothing and negatively affecting the autumn/winter sales season.」

「Cold-weather goods struggled somewhat due to the warmer weather.」

「For scarves and mufflers, market trends for new products, including silk scarves, lightweight stoles, the undyed cashmere series and products for Respect for the Aged Day, were favorable at the start of the autumn market, but although cold-weather goods gained momentum around Christmas due to the warmer weather in November and December, the market was difficult overall throughout the season.」

「There are no material changes concerning the occurrence of key risks or the "Business and Other Risks" described in the securities report for the previous fiscal year.」

「There were no newly identified business or other risks during the first quarter of the fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Cold-weather goods underperformed in the autumn/winter market, which generates particularly high sales throughout the year, due to the impact of the mild winter. Other external factors also contributed, bringing sales to 80.9% of the prior-year level.」

「As with handkerchiefs, the consumption tax increase significantly weakened consumer sentiment, while the mild weather throughout the season caused cold-weather goods to underperform. Sales for the period were 89.6% of the prior-year level.」

「For handkerchiefs, we sought to increase sales by actively developing events and strengthening products designed to address extremely hot weather, but consumer purchasing appetite did not recover in July due to the cool summer, unseasonable weather and other factors,」

「The company sought to expand handkerchief sales through active event development and stronger summer product offerings, but consumer purchasing appetite declined during the extended holiday period, the subsequent Mother's Day campaign also lacked momentum, and weather factors such as the cool, rainy season in June prevented the launch of summer products such as long handkerchiefs from producing results. Sales were 94.1% of the prior-year level.」

「Although the new brand received a certain level of market recognition and market share improved, the mild conditions at the beginning of the autumn/winter season weighed on the overall autumn/winter goods market, bringing sales to 97.3% of the prior-year level.」

「In addition to the closure of department stores in regional and suburban areas, the Group's primary sales channels, stores also repeatedly closed temporarily due to natural disasters, including earthquakes, typhoons and heavy rain, mainly in Hokkaido and the Kansai region. As a result, consumer sentiment declined significantly, particularly in the affected areas, and the retail market as a whole remained challenging.」

「In addition to the closure of department stores, the main sales channel, in regional and suburban areas, the Northern Osaka Earthquake and continued unsettled weather reduced consumer sentiment, particularly in the Kansai region, leaving the market in a difficult environment.」

「No new business or other risks arose during the cumulative third quarter of the current consolidated fiscal year. There have also been no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「Sales have remained sluggish, particularly at department stores in major metropolitan areas, as slower consumption by foreign tourists and lower average purchase prices at department stores and other key sales channels coincided with unfavorable weather.」