Based on our management principles of "Customer First" and "Quality Oriented," the Daidoh Limited Group has engaged since our founding in 1879 in initiatives to provide high-quality apparel to our customers at reasonable prices. At the same time, we have been working to evolve the corporate group into an entity capable of generating profits from a medium- to long-term management perspective.
Even so, we have continued to experience operating losses over the long term. In particular, despite our efforts to transform our businesses to recover from the effects of the COVID-19 pandemic over the last three years, our financial figures for the fiscal year ending in March 2024 show results that include operating losses and ordinary losses.
With the aim of quickly overcoming this slump in our results, and in order for us to build a robust profit structure and provide appropriate returns to our shareholders, we developed and announced on May 20, 2024, the creation of a three-year, medium-term management plan based on the theme of "Innovation and Evolution," which covers the period through the fiscal year ending in March 2027.
About the "Innovation and Evolution" in Our Medium-Term Management Plan
Through our medium-term management plan, based on insights gained from looking back at the past ten years, we have created a plan for the Group as a whole to implement various innovations and improvements, with the ultimate aim of achieving a consolidated operating profit of JPY 1.5 billion and an ROE of 8% for the fiscal year ending in March 2027.
In order to accomplish not only growth for our existing businesses, but also to achieve non-consolidated growth through mergers and acquisitions, we will work on improving the feasibility of the plan we have created by using outside resources to supplement any operational resources we might lack internally.
Goals of the medium-term management plan: Consolidated operating profit of JPY 1.5 billion and ROE of 8% for fiscal year ending March 2027
I. Evolution of our business model
I.I. Business portfolio reforms
We will clarify which of our businesses should be targeted for growth and which should be cut back, with our businesses focusing on high profit ratios and rates of growth.
Clothing business
For our retail business, in order to drive the further growth of Brooks Brothers, which is enjoying increased sales, we have a number of initiatives planned. With respect to NEWYORKER, which is experiencing falling rates of sales growth, we plan to improve profit ratios by implementing supply chain reforms.
As for our manufacturing divisions, we are focused on achieving growth for PONTETORTO, which produces materials for high-performance sports apparel. In addition, with our manufacturing division in China we are aiming for better profit ratios and promoting business structure improvements.
Real estate and leasing business
The Dynacity commercial complex in Odawara continues to demonstrate a stable, high profit ratio and is fulfilling its role as a commercial facility integrated into the local community. As for our real estate for lease other than Dynacity, we are currently considering the requirements for capital for the Group as a whole in a flexible manner.
I.II. Implementation of policies by location
As we work to evolve our business model by leveraging Daidoh Limited's strengths as a specialty retailer of private label apparel, we are working to strengthen sales promotion capabilities outside Japan, promote digital transformation (DX) and customer relationship management (CRM), and strengthen and promote our capabilities in mergers and acquisitions.
- With Brooks Brothers, we are expanding our operations in Japan and strengthening e-commerce.
- And with respect to NEWYORKER, we are working to improve profit ratios through means such as the introduction of a system for improving accuracy when placing orders.
- We are also considering ways to build new Group synergies by entering the outdoor apparel market.
- Our plans for PONTETORTO include strengthening the brand's sales capabilities and marketing.
- We will promote DX and CRM initiatives in an effort to maximum the additional value we provide to our customers.
- Through the strengthening of our capabilities in mergers and acquisitions, we will promote non-consolidated growth through such mergers and acquisitions.
II. Reforming and strengthening our operational structure
In order to execute and realize our growth strategy, we have reviewed the structure of our board of directors, promoting diversity through the appointment of a woman to the board of directors and appointing an external board member with knowledge of the apparel industry. We are also supplementing our knowledge and personnel resources through collaborations with outside experts.
Moreover, by converting our current stock option system to a system of share compensation based on transfer restrictions, which are determined by meeting certain conditions with respect to fixed performance targets, we are strengthening our incentives to achieve the goals of our plan.