To Our Shareholders

Thank you very much for your ongoing support. In advance of the 20th Ordinary General Meeting of Shareholders, I would like to convey to you the following notice.
In the fiscal year ended March 31, 2024, demand for furniture and interior goods, demand for domestic EC use, and demand for cross-border EC use remained strong. However, with the yen remaining at historically low levels, the business environment surrounding both LOWYA (our furniture and interior EC business) and DOKODEMO (our cross-border EC platform business) has continued to undergo significant changes.

In the LOWYA business, which is our main business, we have specialized in online shopping since its establishment, but we have now shifted to a business model that integrates the internet and the real world, leveraging our strengths in attracting customers, product design and price competitiveness. As such, we opened three brick-and-mortar stores in the last fiscal year: our first in Fukuoka City, Fukuoka Prefecture, in April 2023, followed by another in Osaka City, Osaka Prefecture, in December 2023, and another in Nagoya City, Aichi Prefecture, in February 2024. Since the opening of the first store, we have gradually seen the brick-and-mortar stores make a positive impact on the LOWYA flagship store, and we will continue to carry out studies aimed at establishing an OMO-type D2C business. We will continue to diversify our channels for connecting with customers, improve brand recognition, and respond flexibly to various customer needs.
In terms of profit, we worked to improve the profit margin by curbing sales promotion expenses and advertising expenses during the last fiscal year. As a result, sales dropped to 95.9% of the previous fiscal year’s level. While the cost of sales ratio worsened due to the weak yen, we continued our efforts to reduce inventory and shipping costs by optimizing inventory and delivery as well as by focusing on reducing marketing costs. We also strived to reduce personnel and fixed costs, resulting in an improvement in the SG&A-to-sales ratio and an increase in operating income.

In the DOKODEMO business, the total value of goods distributed decreased to 54.8% of the previous fiscal year’s level due to changes in inbound consumption trends, but as a result of efforts to curb marketing costs during the last fiscal year, profits improved and the business returned to profitability in the second half of the fiscal year. Through support provided to store operators to enhance product lineups and the implementation of marketing measures, the number of members and app downloads is steadily increasing, and we will continue our efforts to grow the total value of goods distributed. I look forward to your continued support and understanding in the coming year.

OMO:Online Merges with Offline

Tomokazu Ukishiro
President and CEO
June 2024