Formulation of Measures to Address Going-Concern Concerns

「The Group continues implementing the following measures to resolve these circumstances.」

「The company continues to negotiate with its lending financial institutions regarding the repayment schedule for the principal of its borrowings, while pursuing ongoing reductions in manufacturing costs and SG&A expenses. It will also work to accelerate the conversion of assets it owns into cash through sales and other measures.」

「The Group continues implementing the following measures to resolve these circumstances.」

「The Group continues implementing the following measures to resolve these circumstances.」

「Through ongoing efforts to reduce manufacturing costs and selling, general and administrative expenses, requests to financial institutions for deferrals of loan principal repayments, and the use of tax and social insurance payment deferral programs under the government's emergency economic measures, the company secured cash and deposits of ¥1,326 million at the end of the first quarter, providing the funds necessary to continue operations for the foreseeable future.」

「The Group continues implementing the following measures to resolve these circumstances.」

「The group has begun implementing the following measures to resolve these circumstances.」

「We will advance efforts to secure appropriate gross margins by reducing manufacturing costs, continue rigorously reducing fixed expenses, and establish a structure capable of maintaining and expanding revenue and securing stable operating profit.」

「The group has begun implementing the following measures to resolve these circumstances.」

「Through lower manufacturing costs, ongoing efforts to reduce selling, general and administrative expenses, requests for deferrals of principal repayments to lending financial institutions, and the use of deferral programs for taxes and social insurance premiums under the government's emergency economic measures, the company secured ¥2.088 billion in cash and deposits at the end of the consolidated fiscal year, sufficient to continue its business for the foreseeable future.」

「・Reducing inventory risk by controlling manufacturing and procurement amounts and managing just-in-time delivery schedules ・While advancing efforts to secure appropriate gross margins through lower manufacturing costs from the spring/summer 2022 season into the fall/winter season, the company will continue rigorous reductions in fixed expenses to establish a structure capable of maintaining and expanding sales and securing stable operating profits.」

「Through ongoing efforts to reduce manufacturing costs and selling, general and administrative expenses, requests for deferrals of principal repayments to lending financial institutions, and the use of deferral programs for taxes and social insurance premiums under the government's emergency economic measures, cash and deposits were ¥1.925 billion at the end of the current second quarter. However, most repayment deferrals were attributable to deferrals of tax and other payments, and cash flow remains difficult. The company will continue these efforts, maintain good relationships with lending financial institutions, and hold discussions to receive ongoing support.」

「The company is reviewing the results of its efforts to secure appropriate gross margins through lower manufacturing costs in the spring/summer 2022 season and working to improve their reliability in the fall/winter season. It will also continue rigorous reductions in fixed and variable expenses to establish a structure capable of maintaining and expanding sales and securing stable operating profits through 2024.」

「The company will develop new customers by changing the design sources it supplies and reviewing selling prices. For in-store visual presentation at department stores and directly operated stores, rather than promoting new products to existing customers, it will promote strategic products, strengthen its appeal to consumers previously unfamiliar with Lapine, and seek to increase the number of new customers. It began testing measures to reduce inventory risk through control of manufacturing and procurement and secure appropriate gross margins through lower manufacturing costs in the fall/winter 2021 season, will implement them fully from the spring/summer 2022 season onward, and will continue rigorous reductions in fixed and variable expenses to establish a structure capable of maintaining and expanding sales and securing stable operating profits through 2024.」

「Through efforts to reduce manufacturing costs, strengthened reductions in selling, general and administrative expenses, requests for deferrals of principal repayments to lending financial institutions, and the use of deferral programs for taxes and social insurance premiums under the government's emergency economic measures, the company secured ¥1.547 billion in cash and deposits at the end of the current second quarter, sufficient to continue its business for the foreseeable future. It will continue these efforts, maintain its relationships with lending financial institutions, and hold discussions to receive ongoing support.」

「Through requesting deferrals of repayments to lending financial institutions, using deferral programs for taxes and social insurance premiums under the government's emergency economic measures, using various subsidies including employment adjustment subsidies, and reducing fixed and variable costs, the company had cash and deposits of ¥1.437 billion at the end of the current first quarter, sufficient to continue its business for the foreseeable future.」

「① Rigorous cost reductions ② Reductions in raw material costs and subcontracting fees ③ Implementation of sales-enhancement measures ④ Securing funding」

「① Rigorous fixed-cost reductions ② Reductions in raw material costs and subcontracting fees ③ Implementation of sales-enhancement measures ④ Securing funding」

「However, to resolve these events or conditions, the group is working to stabilize its financial position by requesting payment deferrals from lending financial institutions and business partners, using deferral programs for taxes and social insurance premiums under the government's emergency economic measures, using various subsidies including employment adjustment subsidies, and reducing expenses including executive compensation.」

「However, to resolve these events or conditions, the group formulated a new medium-term management plan, NL2023, under the vision of “Expanding customer touchpoints through fashion and digital,” launched it in March 2020, and will work to improve operational efficiency, enhance the brand value of its products, establish stable earnings power, and strengthen its management foundation.」

「Under these circumstances, the group continued to work to secure market competitiveness by implementing improvement measures in product planning, manufacturing, and sales, with the key objectives in its medium-term management plan NL2020 of “Enhancing brand strength” and “Growing the shop business.” In addition, it worked to control fixed costs through rigorous low-cost operations and began structural reforms, including personnel cost reductions, toward the end of the consolidated fiscal year.」

「However, to resolve these events or conditions, the company is reducing costs including personnel expenses such as executive compensation and the costs of manufacturing sample garments, while working to restore profitability in the wholesale business and expand the retail and EC businesses in order to establish stable earnings power and strengthen its management foundation. Since stable funding for its business has also been secured, it has determined that no material uncertainty exists regarding its ability to continue as a going concern.」

「To resolve these events or conditions, the company will reduce costs including personnel expenses such as executive compensation and the costs of manufacturing sample garments, while working to restore profitability in the wholesale business and expand the retail and EC businesses in order to establish stable earnings power and strengthen its management foundation.」

「To resolve these events or conditions, the company will reduce costs including personnel expenses such as executive compensation and the costs of manufacturing sample garments, while working to restore profitability in the wholesale business and expand the retail and EC businesses in order to establish stable earnings power and strengthen its management foundation.」

「The company has formulated and is implementing measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening its EC and retail businesses as part of its medium- to long-term growth strategy. It will continue to implement these measures.」

「However, to resolve these events or conditions and achieve an early recovery in performance, the company has formulated and is implementing measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening its EC and retail businesses as part of its medium- to long-term growth strategy. It will continue to implement these measures.」

「However, to resolve these events or circumstances and achieve an early recovery in performance, the company has formulated and implemented measures including reducing manufacturing and purchasing, cutting carryover inventory, discontinuing unprofitable transactions, transitioning to a flexible profit structure through improved gross margins and fixed-cost reductions, and strengthening the retail business as part of its medium- to long-term growth strategy, and will continue to advance these initiatives.」

「The company has formulated and is implementing measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable brands and transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening the retail business as part of its medium- to long-term growth strategy. It will continue to implement these measures.」

「However, to resolve these events or conditions and achieve an early recovery in performance, the company has formulated and is implementing measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable brands and transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening the retail business as part of its medium- to long-term growth strategy. It will continue to implement these measures.」

「The company has formulated and is implementing measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable brands and transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening the retail business as part of its medium- to long-term growth strategy. It will continue to implement these measures.」

「To resolve these events or conditions and achieve an early recovery in performance, the company has formulated and will implement measures including curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable brands and transactions, and shifting to a flexible earnings structure by improving gross margins and reducing fixed costs, as well as strengthening the retail business as part of its medium- to long-term growth strategy.」

「However, to resolve these events or conditions and achieve an early recovery in performance, the company has formulated and will implement measures including: ① eliminating unprofitable business divisions and consolidating or integrating divisions; ② shifting to a flexible earnings structure by improving gross margins and reducing fixed costs through curtailing production and procurement, reducing carried-over inventory, discontinuing unprofitable brands, and terminating unprofitable transactions; and ③ strengthening the retail business and reinforcing the wholesale business as part of its medium- to long-term growth strategy.」

「However, to resolve these events or conditions, the company has formulated and will implement measures including: ① transforming its earnings structure to respond flexibly to the external environment by improving gross margins and reducing fixed costs; ② building an organization with clearly defined roles for generating profits; and ③ strengthening the retail business and further reinforcing the wholesale business as medium- to long-term measures.」

「The company is formulating measures to resolve or improve these events or conditions. It has also determined that no material uncertainty exists regarding its ability to continue as a going concern because it maintains good relationships with its lending financial institutions, and funds for the foreseeable future have been secured.」