Changes in Climate, Economic Conditions, Consumer Trends and the Competitive Environment

「During the interim consolidated accounting period under review, there were no significant changes in the matters described in this interim report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「The Group operates department stores, and its results and financial condition could be significantly affected by climate conditions; economic conditions, including economic and consumer trends; social conditions, including disease and civil unrest; and competition resulting from the entry of competitors and companies from other industries into the same market area.」

「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 could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the cumulative third quarter (1 March 2021 to 30 November 2021), the Japanese economy was gradually emerging from the difficult conditions caused by the novel coronavirus disease, but signs of a recovery remained weak. Although the economy is expected to recover as economic activity normalizes, close attention must be paid to the impact of a resurgence of the novel coronavirus disease on the domestic and overseas economies.」

「Although economic improvement is expected as measures to prevent the spread of infection, including COVID-19 vaccinations, are implemented, close attention must be paid to the downside risk to the domestic and overseas economies from a resurgence of the novel coronavirus disease.」

「Although economic improvement is expected as measures to prevent the spread of infection, including COVID-19 vaccinations, are implemented, close attention must be paid to the growing downside risk to the domestic and overseas economies from a resurgence of the novel coronavirus disease.」

「The department store industry in which the company operates also continued to face declining consumer sentiment and difficult conditions as the spread of the novel coronavirus disease led to strengthened nationwide social restrictions, including two declarations of a state of emergency and requests to refrain from going out and from operating businesses.」

「Although the department store industry showed signs of recovery after all stores resumed full operations following the lifting of the state of emergency on 25 May 2020, amid the continued impact of the novel coronavirus disease and related calls to refrain from going out, difficult conditions persisted due to unfavorable weather, including torrential rain and a prolonged rainy season, as well as the cancellation or downsizing of customer-attracting events.」

「During the cumulative first quarter (1 March 2020 to 31 May 2020), the Japanese economy continued to deteriorate rapidly due to the impact of the novel coronavirus disease, and employment conditions also weakened further. Consumer sentiment also deteriorated, and personal consumption continued to decline rapidly.」

「The department store industry continued to face difficult conditions due to weather-related factors, including major typhoons and an unusually warm winter, the October consumption tax increase, and the impact of the novel coronavirus disease.」

「Although demand surged ahead of the consumption tax rate increase, sales continued to decline after the October increase due to the resulting reactionary decline. The difficult conditions also included temporary store closures caused by Typhoon No. 19 in October and weak apparel sales due to unfavorable weather.」

「However, during the second quarter, sales at all stores fell below forecasts because of the effects of low temperatures, heavy rainfall and the prolonged rainy season in June and July, in line with trends in the department store industry.」

「However, amid continued intensifying sales competition across industries and business formats in nearby market areas, consolidated sales for the fiscal year were ¥19,384 million, or 97.6% of the previous fiscal year's level, and the operating loss was ¥34 million」

「Sales declined in September, partly due to repeated natural disasters, including the landfall of two typhoons and the Hokkaido Eastern Iburi Earthquake,」

「However, across the Group, sales at all stores fell below forecasts because of weak demand during the mid-year gift-giving season, as well as the effects of consecutive days of extreme heat and typhoons.」

「Regarding results for the cumulative first quarter, the company was affected by the reopening of nearby commercial facilities and closing sales associated with renovations at nearby department stores, as well as renovation work for a new shop scheduled to open in June,」

「However, sales of core products, including men's and women's apparel, had not recovered due to intensifying sales competition across industries and business formats in nearby market areas,」

「Regarding operating conditions during the cumulative third quarter, the company remained in a difficult environment due to intensifying sales competition, although」

「Regarding operating conditions during the cumulative second quarter, the company remained in a difficult environment, including intensifying sales competition across industries and business formats in nearby market areas. In addition, weakness in its core apparel business continued, and sales during the mid-year gift-giving season fell below the previous year's level.」

「During the three-month period ended [the current first quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「The Group operates department stores, and its results and financial condition could be significantly affected by climate conditions; economic conditions, including economic and consumer trends; social conditions, including disease and civil unrest; and competition resulting from the entry of competitors and companies from other industries into the same market area.」