Withdrawal from Unprofitable Stores and Businesses and Cost Reduction

「In the Publishing Business, event sales remained firm and online advertising revenue showed signs of recovery. Together with measures including streamlining the print-book business and reducing inventories as part of the business turnaround, this resulted in net sales of ¥4,026 million, down 8.0% year on year, and segment income, or operating income, of ¥524 million, down 29.1%.」

「Because the Company decided to discontinue development of software under development in the Software and Network business after determining that the business was unlikely to become profitable, the book value of the assets used in that business was reduced to their recoverable amount, and the reduction was recorded as an impairment loss under extraordinary losses.」

「In the Publishing business, in connection with the absorption-type merger in which 株式会社翔泳社 remained as the surviving company and 株式会社翔泳社アカデミー was absorbed, effective 1 January 2023, the Company decided to withdraw from the business operated by 株式会社翔泳社アカデミー. Accordingly, the book value of business-use assets, including the company's business website, was reduced to its recoverable amount, and the reduction was recorded as an impairment loss under extraordinary losses.」

「This comprises settlement payments, rent and other costs arising from the early termination of store lease agreements. Because the profit and loss generated by operating the website in the Software and Network business has remained negative, the book value of the assets used in that business was reduced to their recoverable amount, and the reduction was recorded as an impairment loss under extraordinary losses.」

「Loss on store closures 8」

「In connection with the withdrawal of stores (amusement facilities) in the Software and Network business, the book value of the assets of those stores was reduced to their recoverable amount, and the reduction was recorded as an impairment loss under extraordinary losses.」

「The Company disposed of an unprofitable business during the third quarter of the consolidated fiscal year and entered a recovery trend during the fourth quarter.」

「In the Software and Network business, upfront investment costs for launching multiple new businesses and other factors resulted in net sales of ¥534 million, down 13.8% year on year, and a segment loss (operating loss) of ¥109 million, compared with segment profit of ¥3 million in the same period of the previous year. During the third-quarter consolidated accounting period, the company intensively reviewed its businesses, including by exiting unprofitable businesses.」

「In the Corporate Services business, although inquiries from existing clients remained weak throughout the fiscal year, the effects of reducing outsourcing costs and other measures resulted in revenue of ¥534 million, down 9.8% year on year, and segment profit (operating profit) of ¥36 million, up 24.0% year on year, representing lower revenue but higher profit.」

「In the Corporate Services business, although inquiries from existing clients remained weak, the effects of reducing outsourcing costs and other measures resulted in revenue of ¥332 million, down 9.9% year on year, and segment profit (operating profit) of ¥14 million, up 29.2% year on year, representing lower revenue but higher profit.」

「In the Software and Network business, due to lower sales of paid content resulting from reduced advertising expenses and the effects of restructuring carried out in the previous consolidated fiscal year, revenue was ¥244 million, down 27.9% year on year, and segment profit (operating profit) was ¥25 million, compared with a segment loss of ¥9 million in the previous fiscal year.」

「In May 2017, we transferred all shares of INCユナイテッド held by the Company and, effective that month, withdrew from the Internet café business except for the operation of body-care salon stores.」

「In the Internet café business, due to the closure of unprofitable stores in the previous fiscal year and reduced customer attraction during the busy season because of seismic-retrofitting work at buildings housing some stores, revenue was ¥749 million, down 10.9% year on year, and segment profit (operating profit) was ¥4 million, down 80.9% year on year, indicating that the recovery in performance had stalled.」

「In the Internet café business, despite the impact of closing unprofitable stores in the previous fiscal year, measures to attract customers during the busy season, including upgrades to store interiors and equipment, resulted in revenue of ¥499 million, down 14.4% year on year, and a segment profit (operating profit) of ¥3 million, down 57.2% year on year, marking a return to profitability.」

「In the Internet café business, due to the impact of closing unprofitable stores in the previous fiscal year and upgrading the interior facilities and equipment of existing stores to enhance competitiveness ahead of the busy season, revenue was ¥243 million, down 16.7% year on year, and the segment loss (operating loss) was ¥2 million, an improvement of 31.4% year on year.」

「This was achieved through the withdrawal from the unprofitable rehabilitation-focused day-service business, closure of unprofitable Internet café and body-care stores, development of management personnel, and company-wide cost-cutting efforts, among other measures.」