Securing overseas sales through STAR BUYERS AUCTION

「Demand from overseas partners has recovered and remains strong, while demand from domestic partners also remains high, bringing the overseas ratio to 21.9%.」

「Because ample opening inventory and strong purchasing enabled us to secure sufficient auction offerings, and market prices for each product remained stable, sales from our own auctions for the interim consolidated accounting period were ¥16,332 million, up ¥982 million, or 6.4%, year on year. In addition, as consignment remained strong, GMV from consignment winning bids at our own auctions was ¥12,403 million, up ¥2,582 million, or 26.3%, year on year.」

「Sales from our own auctions for the consolidated fiscal year were ¥33,648 million, down ¥4,382 million, or 11.5%, year on year.」

「Sales from our own auctions for the interim consolidated accounting period were ¥15,350 million, down ¥3,108 million, or 16.8%, year on year, because of the impact of insufficient opening inventory and the curtailment of merchandise offered through STAR BUYERS AUCTION (hereinafter, “SBA”) from the first quarter consolidated accounting period in order to allocate more merchandise to retail sales.」

「Sales from our own auctions declined because of temporary factors including weaker buying appetite among overseas partners in the first quarter consolidated accounting period and the suspension of the diamond auction, SBA Hong Kong. However, sales remained solid from the second quarter consolidated accounting period onward. As a result, sales from our own auctions for the cumulative third-quarter consolidated period were ¥28,470 million, down ¥661 million, or 2.3%, year on year.」

「Sales from our own auctions declined year on year in the first quarter consolidated accounting period because of factors including weaker buying appetite among overseas partners and the suspension of SBA Hong Kong, the diamond auction operated from our Hong Kong base, in view of diamond market conditions. Although these temporary factors had subsided in the second quarter consolidated accounting period, sales from our own auctions generally tend to slow because of seasonal factors, and sales for the cumulative second-quarter consolidated period were ¥18,074 million, down ¥647 million, or 3.5%, year on year.」

「SBA suspended the event scheduled for the first week of September because it was unable to secure sufficient opening inventory after actively conducting wholesale sales at the end of the previous consolidated fiscal year. In view of diamond market conditions, we also canceled the diamond auction operated from our Hong Kong base, SBA Hong Kong.」

「As a result of SBA’s growing recognition as a global platform specializing in luxury goods, with many overseas partners participating in addition to domestic participants, sales from our own auctions for the consolidated fiscal year were ¥40,393 million, up ¥6,480 million, or 19.1%, year on year.」

「As a result of SBA becoming recognized as a global platform specializing in luxury goods, with many overseas partners participating in addition to domestic participants, sales from our own auctions during the cumulative third-quarter consolidated period were ¥29,132 million, up ¥5,768 million, or 24.7%, year on year.」

「As a result of SBA becoming recognized as a global platform specializing in luxury goods, with many overseas partners participating in addition to domestic partners, sales from our own auctions during the cumulative second-quarter consolidated period were ¥18,721 million, up ¥5,253 million, or 39.0%, year on year.」

「The value of winning bids for consigned merchandise at our own auctions increased, and fees from our own auctions remained solid.」

「In sales, sales from our own auctions expanded substantially from the third quarter onward, supported by the establishment of a four-times-monthly SBA schedule, strong purchasing and robust buying appetite among overseas partners due in part to the weaker yen.」

「We began improving the auction format in January, and following a major renewal from March, the sell-through rate recovered to its previous level and sales from our own auctions expanded.」

「We also substantially increased the number of STAR BUYERS AUCTION (hereinafter, “SBA”) events from November, but participation by partners became more dispersed because overseas partners found it difficult to participate owing to the time-zone difference affecting the bid closing time, while some partners found it difficult to allocate personnel in line with the increased number of events. As a result, the sell-through rate declined and bidding was less likely to drive prices higher, contributing to sluggish sales growth and a decline in the gross profit margin. From the end of January, we took measures including changing the bid closing times for categories with high overseas winning-bid volumes, but decided to change the schedule to four events per month from March in order to create an environment in which partners could participate more easily.」

「We were able to hold three online diamond auctions in Hong Kong, in April, June and August, and sales through auctions expanded during the consolidated fiscal year.」

「The Hong Kong auction moved online starting with this event, making all auctions operated by the Group online events.」

「SBA Hong Kong was held once during the cumulative second-quarter consolidated period, in November only, as preparations were made to move to online auctions from April. However, overseas sales through SBA remained strong, and overseas sales accounted for 10.1% of total sales.」

「In sales, starting in October, we increased the frequency of STAR BUYERS AUCTION (hereinafter, “SBA”) to twice a month and proceeded to establish the systems needed to expand the volume of company-purchased and consigned merchandise offered at auction. In November, we also held one diamond auction in Hong Kong.」

「Although SBA Hong Kong events were postponed due to the Hong Kong protests and COVID-19, 4 diamond events were held during the fiscal year (September and November 2019 and July and August 2020), along with 3 jewelry events (September and November 2019 and July 2020).」

「For SBA Hong Kong, 2 diamond auctions and 2 jewelry auctions were held during the cumulative third-quarter period of the consolidated fiscal year, in September and November 2019, but repeated postponements due to the Hong Kong protests and COVID-19 have continued, and the next events are currently scheduled for July and August.」

「The event scheduled for February 2020 was postponed to March due to the Hong Kong protests and then postponed again to after the third quarter due to the impact of the novel coronavirus, resulting in a difference from the same period of the previous year in the event schedule and number of events held as of the current date.」

「In sales, the Group held 2 diamond auctions and 2 jewelry auctions each at the Hong Kong event of the business-to-business auction STAR BUYERS AUCTION, in September and November 2019. To expand overseas sales, it also opened an online bidding site exclusively for overseas dealers in November as a new step toward establishing a global platform, enabling overseas dealers to participate in auctions online.」

「In Hong Kong, the Group held 4 diamond auctions (September and November 2018 and February and June 2019), 2 watch auctions (November 2018 and February 2019), and 1 jewelry auction as a new category (June 2019).」

「To strengthen and expand overseas sales channels, including these Hong Kong auctions, the Group expanded and relocated the Hong Kong office of its subsidiary STAR BUYERS LIMITED to a new office with an attached auction venue.」

「In sales, the Group launched online bidding for the business-to-business auction STAR BUYERS AUCTION in Japan in September, while in Hong Kong it held 3 diamond auctions (September and November 2018 and February 2019) and 2 watch auctions (November 2018 and February 2019).」

「The Hong Kong event was held 3 times in total: 2 diamond auctions and 1 watch auction, which was launched in earnest during the current fiscal year to expand the categories offered through overseas sales channels.」

「STAR BUYERS LIMITED, the Group's subsidiary, held 4 Hong Kong events featuring diamonds, in September and November 2017 and February and June 2018. To expand the categories offered at the Hong Kong events, it also held a trial watch auction in addition to the loose-diamond auctions conducted previously.」

「In sales, the Group held the Hong Kong event of STAR BUYERS AUCTION 3 times in total, in September and November 2017 and February 2018, securing overseas sales, while」

「The Group held the Hong Kong events of STAR BUYERS AUCTION 3 times in total, in September and November 2017 and February 2018, securing overseas sales in addition to domestic sales.」