Reducing Production Costs and Achieving Low-Cost Operations by Increasing the Proportion of Production in Southeast Asia

「In the current fiscal year, we are also advancing the development of a supply structure that supports strategic pricing in order to respond to rapid changes in the environment surrounding the Company. By updating and providing brands, products and services in line with changing times, we will establish a product lineup that customers can afford and choose easily even amid inflation.」

「① In GMS, an area focused on improving profitability, we will advance the development of a supply structure that supports strategic pricing in order to respond to rapid changes in the environment surrounding the Company.」

「Despite the continued depreciation of the yen and rising raw material prices, the Company has improved its cost ratio by shifting production to Southeast Asia, advancing the development of higher-value-added products and style proposals, achieving appropriate price pass-through and revising retail price levels.」

「The consolidated subsidiary 信寶實業有限公司, established in Hong Kong in December 2018 to manage the import and export and production of textile products, and Shanghai 雅瑪都時装有限公司, which manufactured woven shirts and outerwear, were transferred to 欣恩国際貿易有限公司 in April 2019 to make effective use of the Group's management resources, and were consequently excluded from the scope of consolidation.」

「In order to make effective use of the Group's management resources, we transferred all equity interests in the consolidated subsidiary Shanghai 雅瑪都時装有限公司 to 信寶實業有限公司, with a view to improving efficiency through local operations.」

「Shanghai 雅瑪都時装有限公司, which manufactured woven shirts and outerwear, determined that rising labor costs, worsening conditions for new hiring and aging equipment made it difficult to maintain a stable, profitable supply of products over the long term. In light of the Company's current production structure, with expanded production bases in Southeast Asia, it suspended operations at the Shanghai factory effective 20 November 2017.」

「Meanwhile, ヤマト ファッションサービス株式会社, a subsidiary that handles our group’s logistics operations, is working to further improve operating productivity by improving the accuracy of inventory management and inbound and outbound shipping operations, as well as bringing EC logistics operations in-house after transferring them from an external contractor.」

「The decision was made in light of concerns over rising labor costs in recent years, worsening conditions for new hires, and aging equipment and machinery, as we judged that it was becoming increasingly difficult to maintain a stable supply of products with sufficient profitability over the long term, taking into account our current production structure, which now has well-established production facilities in Southeast Asia.」

「ヤマト ファッションサービス株式会社, a subsidiary that handles the logistics operations of our group, has worked to improve the accuracy of inventory management and inbound and outbound shipping operations. 上海雅瑪都時装有限公司, which manufactures woven shirts, outerwear and other products, has focused on improving quality and operating production lines efficiently.」

「ヤマト ファッションサービス株式会社, a subsidiary that handles the logistics operations of our group, has worked to improve the accuracy of inventory management and inbound and outbound shipping operations. 上海雅瑪都時装有限公司, which manufactures woven shirts, outerwear and other products, has focused on improving quality and operating production lines efficiently.」

「On the procurement side, we are working to reduce production costs by increasing the proportion of production conducted at our Southeast Asian facilities, while improving the efficiency of various operations and continuing our efforts toward “low-cost management.”」