Message from the President

ValuesPresident and COO

Financial Highlights

Home improvement stores have changed with thetimes. More intense competition from companies
in other industries entering the market has had
an effect, but the biggest factor is the changes incustomers. When I entered this industry around30 years ago, customers were eagerly buying
products to make their lives easier. Durable
consumer goods such as the “big three” oftelevisions, washing machines, and refrigerators,
along with automobiles, were becoming
widespread. But I think that underlying this trendwas that the sort of smaller items that make life
just a little more convenient had yet to reachhouseholds.
Time went on, and as consumer goods
became more common in households to a certain
extent, a growing need emerged not only for
products that make life more convenient, but thosethat enrich people’s lives, such as gardening, DIY,and pet supplies. Stores needed to expand anddeepen their product lineup to meet such needs.
Further, in recent years, as more companies
adopted work-from-home schemes in response to
the COVID-19 crisis, employees became able towork without going to the office. With this change
in lifestyle, more people began dreaming oftrading their small downtown apartment for

Risk Management and Compliance

The company name “DCM” is derived fromthe concept of “Demand Chain Management,”
distribution reform from the customer’sperspective. This is the opposite of the moreconventional “supply chain management,”
incorporating the idea of emphasizing the needs ofthe customer rather than the convenience of thesupply side. This approach is reflected in ourPrinciples of Conduct, “Demand Chain
Management for Customer: Always thinking fromthe customer’s perspective.”
In 2016, at the time of the 10th anniversaryof the establishment of DCM Holdings Co., Ltd.,we adopted as our new company philosophy“Do Create Mystyle.” The slogan reflects our aim
to be a company that helps customers realize theirideas and desires, which we call “Mystyle,” by
doing and creating. The needs of customers arediverse, and the dreams they have for their lives
continually change with the times. Our pledge torespond flexibly to such changes, and to change
ourselves, is also embodied in this philosophy.
In March 2021, when DCM Co., Ltd. wascreated by integrating five home improvementcompanies, we established a value system basedon the company philosophy of “Do Create
Mystyle.” We formulated the Principles of Conduct

Corporate GovernanceCapturing the essence of DIY and pioneering
potential markets

Sustainability

DCM Holdings Co., Ltd. Integrated Report 2023

Home improvement stores that continuallychange to meet customer needsa large house in the suburbs where they could
keep pets and have a garden, and raise theirchildren in areas with fresh air. Demographictrends such as the declining birthrate, aging
population, and concentration of population incities have supported this trend, allowing people
to purchase vacant houses in the suburbs at
a lower cost. This in turn has driven demand forrenovation of the houses that have been acquired.
In response, we have expanded our offerings in
the field of DIY renovation.
Homeowners can of course hire a contractor
for renovation work, but more and more people
are adopting the mindset that they want to dowhat they can on their own. This is partly to keep
costs down, but also because they are attracted tothe idea of doing it themselves. We first noticed
this market trend and changing needs toward
DIY and home renovation around 2010, andreflected it in our store management and productdevelopment. As a test, we purchased a vacanthouse in Sapporo, Hokkaido, and had ouremployees try to renovate it. We found that it wasalmost impossible to renovate a house using only
the products that were available at DCM stores at
the time. Based on this experience, we expanded
the sales floor to include products that
homeowners would need for renovation, and sales
exceeded our expectations. Up to that point, I thinkit’s fair to say that our company, or anyone in thehome improvement industry, had not been able
to capture the latent needs and interests ofcustomers. Afterward, we developed a “DIYrenovation” format where customers could gain
hands-on experience with reform in the store, orreceive advice from an employee with specialized
knowledge when purchasing products. This wasimplemented from an early stage, and has become
one of our strengths.
I consider DIY to encompass not only home
improvement, but also gardening, keeping pets,and enjoying the outdoors, and even cooking andMedium-Term Management Plan

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to embody this system, drawing on employeegenerated ideas, mainly from younger employees.
I was extremely pleased to see that “teamwork”
featured so prominently alongside our aspirations
for customers and local communities. This isbecause it was the employees themselves whoincluded the concept of teamwork, with all
employees working with mutual respect andcooperation as they fulfilled their roles. I truly felt
the mindset of employees united for the sakeof customers.

Message from the President

Yasunori Ishiguro

Business Model

With teamwork cultivated through corporate
integration, we are creating a newgeneration of home improvement stores.

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Message from the President

Sustainability

Message to stakeholders
Rather than thinking about the future of home
improvement centers, we try to envision the home
improvement centers of the future, and throughback casting seek to evolve beyond the imagination
or expectations of stakeholders.
We hope you will notice and appreciate ourefforts, teamwork, and the changes we make toachieve this. Thank you for your continued support.

Corporate GovernanceRisk Management and Compliance
Financial Highlights

DCM Holdings Co., Ltd. Integrated Report 2023

Medium-Term Management Plan

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The driving force for the DCM Holdings mediumterm management plan is the 36-Month Project,
an internal, cross-sectional organization withexecutive officers as task leaders. Under thisproject, we will execute a PDCA cycle over thethree years (36 months) of the plan period, andsteadily implement the measures necessary toachieve the plan targets. For each task, we set
themes that must be resolved for DCM to realize
its aim of being “an integrated group of businesses
that help people live more comfortably,” including
store strategy and product development, as wellas such factors as customer contact points, humanresource strategies, and digital transformation(DX) measures. The 36-Month Project is
a company-wide program that must be carriedthrough to conclusion, while at the same time, it isan initiative that anticipates the changes in society
and customer needs, so it inevitably includes
themes related to ESG and SDGs. As such, themeasures for the 36-Month Project are closely
linked to initiatives to promote sustainability.
Promoting sustainability is nothing special for
DCM Holdings. This is because the basic

Message from the President

DCM Holdings is currently implementing its third
Medium-Term Management Plan, covering theSustainable value creation throughDCM-style projects

philosophy of DIY, taking care of things and using
them for a long time, and doing the things that you
can on your own, overlaps with SDGs. Accordingly,
we believe that by creating a solid plan for the36-Month Project, and having all employees
implement it as part of their daily work, we cannaturally contribute to a sustainable society.
In addition, we encourage the appointment ofyoung employees to implement the 36-MonthProject. We feel that by including young people invarious measures such as the 36-Month Project,and in the process give them the opportunity tothink about larger issues, take on challenges, andexperience setbacks and successes, that we willdevelop the next generation of leaders. I am
particularly hopeful that we will develop humanresources able to create systems to respond tochange, and systems that are more convenient
and rational.

Business Model

Strategy for a new-generation, customercentric home improvement store

areas will offer the best product lineup in the area
during certain periods and for certain categories.

Valuescleaning. In other words, DIY is an activity that you
do on your own, in the way that you want. In thatsense, by looking at the DIY domain more broadly,
we are able to meet the needs of today’s
customers who are seeking to enrich their lives
and find solutions, not just buy things. We wantto make stores more interesting, and offer newformats to uncover potential markets. One
example is developing the DIY market in urban
areas. Until now, DIY has generally been
associated with life in suburban areas witha house and a garden, rather than the city center.
In 2022, we opened DCM DIY place, a new type ofurban-centered store in Ebisu, Tokyo, to offer DIY
ideas and experiences tailored to customers livingin the city center, and develop demand.

period of fiscal 2023 to fiscal 2025, which aims
to advance toward achieving our long-termbusiness vision for 2030 of “transformation into
an integrated business that comprehensively
makes people’s lives more comfortable.” The firstmedium-term management plan (fiscal 2017 tofiscal 2019) and the second (fiscal 2020 to fiscal2022) focused on the business integration and fullconsolidation of the home improvement operatingcompanies under our corporate umbrella. This
third plan aims for full-fledged growth building on
our business strategy of creating a “newgeneration home improvement center.”
The first step is to further strengthen theareas most desired by customers, such as DIY
renovation, gardening, pet supplies, and leisure,allowing us to provide greater convenience,
specialization, and depth. At the same time, weare developing competitive store formats for large,medium, and small stores. At large-scale stores,
we have already introduced expert consultation asa section of the sales floor, so the key will be how
to expand this to medium and small-sized stores.
Home improvement stores in Japan have mainly
been run as general merchandise stores, so store
operations have been standardized based on thesame concept, regardless of store size. In thislatest business plan, we will clarify the roles andconcepts of each store according to size. Theproduct lineup and certain services will be refined
to best suit the store size, but even our small
stores will continue to be “convenientneighborhood home improvement stores” forcustomers. We are working to build a unique
BOPIS (Buy Online Pick-up In Store) style service,so that even if a small store does not have thespecific items a customer wants, the process ofacquiring them will be as smooth as possible.
Customers will be able to order what they needfrom our e-commerce site, or with assistance fromstore staff, and have it delivered to the store thefollowing day or day after.
In addition, when arranging sales floors, weare paying more attention to the balance between
staples (regular products) and seasonal items.
Utilizing accumulated information on local needs,
we will create sales spaces that offer a full line ofregular products, along with the seasonal items
most in demand in a particular area. This will
ensure that even small stores with limited sales

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