Expansion of the Maternity and Baby Business through Angelybe

「Revenue declined because we restrained the launch of new products to optimize inventory. However, we thoroughly controlled inventory in line with demand trends, worked to maintain appropriate inventory levels and optimized various costs, including advertising expenses, achieving profitability.」

「During the interim consolidated accounting period, amid continued difficult conditions including expectations that the number of births in Japan would reach the lowest level since statistics began, sales of maternity innerwear performed strongly as we expanded products that effectively reach target customers, including the “Midwife-Supervised Series.” The series was also well received, including by ranking first on other companies’ marketplaces.」

「During the interim consolidated accounting period, amid difficult conditions including expectations that the number of births in Japan would reach the lowest level since statistics began, we expanded our product offerings to effectively reach target customers, including the “Midwife-Supervised Series,” and improved the earnings structure by limiting discounts. We also strengthened promotions centered on social media, improving customer acquisition, while expanding delivery services and increasing customer satisfaction. As a result, e-commerce revenue increased 11.7% year on year.」

「The earnings structure improved as a result of launching value-added new products, reviewing selling prices and sales strategies, improving the gross profit margin and withdrawing from unprofitable businesses. As a result, revenue was ¥1,170 million, down 1.9% from the prior fiscal year, while the segment loss was ¥77 million, compared with a ¥110 million segment loss in the prior fiscal year.」

「During the cumulative third quarter, amid a difficult environment including the continued decline in the number of births in Japan, we reviewed our product strategy by revising the selling prices of existing products and launching high-priced new products. As a result, the cost ratio improved, the business returned to profitability in the third quarter (October to December), and profit improvement progressed. Revenue was ¥883 million, down 2.3% year on year, while the segment loss was ¥57 million, compared with a ¥69 million segment loss in the prior-year period.」

「During the cumulative second quarter, as the number of births in Japan continued to decline, we focused on developing new products to differentiate them in the ongoing difficult business environment. We also worked to develop businesses including photo studio services and e-commerce operations in China in order to build a new earnings base.」

「We conducted test marketing to better understand the needs of target customers, sought to increase average selling prices through a product differentiation strategy and worked to improve profitability. As a result, both revenue and gross profit from new products increased. Meanwhile, we made upfront investments to gain share in new markets, including by opening a store on Tmall, one of China’s largest e-commerce marketplaces. Profit declined due to these investments and the recognition of inventory valuation losses resulting from the optimization of inventories of existing products.」

「The business operated in a difficult environment, including expectations that the number of births in Japan would reach the lowest level on record. Revenue was ¥1,193 million, down 11.9% from the prior fiscal year, while the segment loss was ¥110 million, compared with a ¥70 million segment loss in the prior fiscal year.」

「During the cumulative third quarter, amid a difficult environment including expectations that the number of births in Japan would reach a record low, we temporarily restrained procurement and optimized inventory while reviewing our product strategy, resulting in lower revenue. Meanwhile, we pursued efforts to build a new earnings base, including the solid performance of the photo studio service launched in May 2022 at the エンジェリーベ Suitengu-mae store.」

「At the store near Tokyo’s Suitengu Shrine, which is known for safe childbirth and fertility blessings, the photo studio service made a solid start as the Company worked to build a new earnings base. As a result, revenue was ¥536 million, down 12.8% year on year, while the segment loss was ¥59 million, compared with a ¥67 million segment loss in the prior fiscal year.」

「Meanwhile, to build a new earnings base, we began offering a photo studio service at a store near Tokyo’s Suitengu Shrine, which is known for safe childbirth and fertility blessings, making use of its location. We also focused on developing and providing new services, including “SAZUKARI,” a rental service for maternity wear and other items that leverages our recognition and customer base as a maternity brand. As a result, revenue was ¥264 million, down 12.8% year on year, while the segment loss was ¥33 million, compared with a ¥34 million segment loss in the prior fiscal year.」

「Amid this environment, we strengthened collaboration between segments and worked to improve operating efficiency in order to establish a foundation for medium-term growth, including through the merger of マルコ株式会社 and 株式会社エンジェリーベ. As a result, revenue was ¥1,354 million, down 7.9% from the prior fiscal year, while the segment loss was ¥70 million, compared with a ¥89 million segment loss in the prior fiscal year.」

「Although sales and profit remained sluggish in the first half, we strengthened the expansion of product offerings tailored to customer needs and continued developing products and services available for regular purchase and strengthening e-commerce. As a result, we made steady progress toward improving profitability, including by achieving profitability for 3 consecutive months in the third quarter (October 2021 to December 2021).」

「Against this backdrop, we strengthened e-commerce, including by developing new products and services for regular purchase. As a result, revenue was ¥615 million, down 17.0% year on year, while the segment loss was ¥67 million, compared with a ¥42 million loss in the prior-year period.」

「During the cumulative first quarter, e-commerce sales remained resilient, but the business operated in a difficult environment, including a decline in the number of births due to the impact of COVID-19. We worked to develop products that customers would purchase regularly. As a result, revenue was ¥303 million, down 23.8% from the prior fiscal year, while the segment loss was ¥34 million, compared with a ¥10 million segment loss in the prior fiscal year.」

「Revenue was ¥1,470 million, down 29.5% from the prior fiscal year, and the segment loss was ¥89 million, compared with a ¥25 million segment loss in the prior fiscal year.」

「During the cumulative third quarter, e-commerce sales increased as the tendency to refrain from going out continued to strengthen amid concerns over the spread of COVID-19, but revenue declined because store sales fell. As a result, revenue was ¥1,144 million, down 32.4% year on year, while the segment loss was ¥29 million, compared with segment profit of ¥31 million in the prior-year period.」

「During the cumulative second quarter, sales through our core e-commerce site remained solid as we effectively captured increased demand from stay-at-home consumption. However, revenue declined because store sales fell sharply due to the growing tendency to refrain from going out amid concerns over a renewed spread of COVID-19 and store closures under the state of emergency, as well as our complete withdrawal from catalog gifts in November of the prior year. As a result, revenue was ¥741 million, down 36.1% year on year, while the segment loss was ¥42 million, compared with profit of ¥10 million in the prior-year period.」

「During the cumulative first quarter, segment revenue declined following the complete withdrawal from the gift catalog business, although e-commerce sales in the core maternity and baby divisions remained solid amid the expansion of stay-at-home consumption. As a result, revenue was ¥392 million, down 31.8% year on year, while the segment loss was ¥10 million, compared with segment profit of ¥32 million in the prior-year period.」

「The Company discontinued publication of its paper gift catalog after the March 2019 issue and completely withdrew from the unprofitable gift business in November of the same year. By concentrating management resources on the core maternity and baby divisions, revenue declined, but the segment loss improved.」

「During the cumulative third quarter, we continued efforts to reduce costs by discontinuing catalog publication in the gift division and reviewing the overall logistics system. We also made steady progress in reforming the earnings structure by concentrating management resources on the core maternity and baby divisions. As a result, revenue was ¥1,692 million, down 16.6% year on year, while segment profit was ¥31 million, compared with a segment loss of ¥26 million in the prior-year period.」

「During the cumulative second quarter, we worked to reduce costs in the gift division by discontinuing catalog publication and reviewing the logistics system, while pursuing reforms to the earnings structure by concentrating management resources on the core maternity division and the steadily growing baby division. As a result, revenue was ¥1,160 million, down 10.6% year on year, while segment profit was ¥10 million, compared with a ¥23 million loss in the prior-year period.」

「During the cumulative first quarter, we pursued reforms to the earnings structure through selective concentration of resources, including efforts to improve profitability by discontinuing the publication of new catalogs in the gift division and focusing on expanding sales in the steadily growing baby division. As a result, revenue was ¥575 million, down 14.1% year on year, while segment profit was ¥32 million, compared with a ¥5 million loss in the prior-year period.」

「During the fiscal year, 株式会社エンジェリーベ contributed for the full year. While sales through its own e-commerce site and major online shopping malls remained solid, the number of orders increased after the announcement on 20 November 2018 that it had received the Mothers Selection Award 2018, selected by votes from ordinary mothers and presented by the Japan Mothers Association. As a result, revenue increased in both the maternity and baby divisions.」

「During the cumulative third quarter, sales through our own e-commerce site and major online shopping malls remained solid. Following the receipt of the Mothers Selection Award 2018, selected by votes from ordinary mothers and presented by the Japan Mothers Association, the number of orders increased after the award was announced on 20 November 2018. December 2018 sales in the maternity business increased 18.2% year on year. The baby business also increased 68.1% year on year. At the same time, we invested in developing an operating structure for medium- to long-term growth, including by reviewing our logistics system.」

「During the cumulative second quarter, sales through our own e-commerce site and major online shopping malls remained solid. In particular, sales of baby products performed strongly, increasing 36.2% year on year as the product range was expanded from apparel to a wide range of related products, including strollers. We improved the gross profit margin by reviewing production and procurement costs, while developing an operating structure for medium- to long-term growth, including by strengthening customer acquisition and customer service capabilities.」

「株式会社エンジェリーベ, which joined the Group in March 2018, primarily sells maternity and baby apparel and miscellaneous goods, as well as gifts for childbirth celebrations. During the cumulative first quarter, sales through its own e-commerce site and major online shopping malls remained solid. In particular, sales of baby products performed strongly, rising to 132% of the prior-year period, as the product range was expanded from apparel to a wide range of items including child car seats.」