Medium-Term Management Plan Business Strategies (1)ValuesStore Strategies
As regional flagship stores, the large stores are not limited tooffering a wide range of highly specialized product lineups
and services such as “Sumairu Helper”.* As represented by
DIY Reform, customers will be able to do things themselvesthat they had previously thought obvious to ask
a professional, and we will provide opportunities so that
customers can perhaps dream up their own usage scenarios
from our sales floor area arrangements. Rather than simply
being a place to buy things, we aim to be a store that delivers

a “buzz” and excitement to customers by allowing them tofeel the "fun to create and fun to think" through our sales
floor areas.
At large stores, highly experienced veteran employees
are placed in charge of DIY services, and we are providingthem with systems that can solve a variety of customer
problems.

DIY Reform

Quick Parts

Pet Expo

Leisure Field

Message from the President* Sumairu Helper: This is a service by which specialist staff members make home
visits and can respond to housing concerns, from minor problems to renovations.

Medium-Term Management Plan

Previously, regardless of the size of the store, our basic policy had been standardized store management based on thesame concept. In what was a necessary measure to promote sales floor area efficiency following the integration of
the five home improvement companies, the sales floor areas became one. To aim for further growth, henceforward
we are dividing roles and concepts into large, mid-sized, and small stores, in dominant areas centered around large
stores. We believe that it is necessary to manage stores in a way that makes customers’ lives more convenient as
a whole by allowing customers to use stores properly in accordance with that occasional need. To that end, we willrenovate 223 existing stores over the three-year period of the third medium-term management plan and realize
low-cost and speedy existing store enhancements by having an in-house team of specialists handle the renovations.
The breakdown of the 223-store enhancement plan assumes 23 large stores (total of 120 stores), 86 mid-sized
stores (240), and 114 small stores (260). We plan to evolve nearly half of our stores into stores that follow the
new policy.
There follows an explanation of what kind of concepts we will have for large, mid-sized, and small stores in theyears to come.

Business Model

Large-scale stores: Stores that combine comprehensiveness and specialization

Previous store strategy
Same store operation regardless of store size

Large store
Same conceptMid-sized store
Small store

Sustainability

Creation ofsame stores

Corporate GovernanceStandardized
store
operations

Risk Management and Compliance

Vision from now on
Differentiate optimal roles and concepts in accordance with store scale

Creation of
optimalstoresOptimalproduct
lineups

Optimalservices

Store size
Net sales

Large store
Mid-sized store
Small store(Including DCM Nicot)

20

Floor area

Small
store

Numbers ofstoresExisting store
enhancement plan
2023-2025

More than ¥1 billion

4,950 m2 or more

120 stores

23 stores

More than ¥400 million but
less than ¥1 billion

1,980 m2 or more but
less than 4,950 m2

240 stores

86 stores

Less than ¥400 million

Less than 1,980 m2

260 stores

114 stores

DCM Holdings Co., Ltd. Integrated Report 2023

In addition to the “lifestyle variety store that supports local
lifestyles” element that is the role of our small stores, ourmid-sized stores introduce the areas of expertise that are
most needed in the region and raise our level of contribution
to local customers. Specifically, we cover regional
characteristics that include coastal, mountainous, and urban
areas, and deploy sales floor areas that specialize in, forexample, gardening, pets, and leisure. Not stopping at justa one-time enhancements, we will also continue to makestore improvements to better match the characteristics ofeach region by means of ongoing area marketing.

Mid-sized
store

Small
store

Regional
characteristics
Expertise

Small stores: Community-based stores Lifestyle variety stores
Financial Highlights

Mid-sized store: Lifestyle variety store + α

Mid-sized
store

Large store

Optimaloperations

Due to floor space limitations, the reality is that it is difficult
for small stores to offer a full range of products. Our small
stores do however stock a solid lineup of basic products that
customers in their areas need in their daily lives and thereby
support local lifestyles.
Even in small stores, we are also sure to make space fora seasonal sales floor area (a sales floor area that changes
frequently according to the season or theme) while deploying
a wide range of products that are appropriate for seasonal
items or are in keeping with local events and are needed atthat time. Based on this policy, we provide products that arenecessary for everyday life and for solving those "little
troubles" and propose ways to spend the four seasons thatare typical of that region.
For highly specialized and other products, we deliver
the products that our customers need by collaborating withthe large stores in dominant areas or by utilizing EC store
pickup services.

21

Medium-Term Management Plan Business Strategies Columns

ValuesColumnOverview of Hodaka Co., Ltd.

Overview of DCM Nicot Co., Ltd.

Hodaka is a specialty store for professionals offering a variety ofbeautiful, top-notch products that are both durable and longlasting, first-class sales floors that make products easy to see,understand, and purchase, and first-rate employees possessing an
accumulated wealth of product and business knowledge who aretrustworthy and responsive, all of which ensure that craftsmen canshine on the job and engage in first rate work.

We proactively open stores in rural areas where shopping isdifficult under the concept “delivering great convenience to small
towns.” To facilitate the provision of items needed in everyday life
as a home convenience store, in addition to daily necessities, we
also aim to become a convenient shop providing frequently used
tools and materials, seasonal products, everyday clothing, andgroceries. Further, we maintain minimal lineups of home
appliances, sofas, beds, and other home furnishings. In terms ofcommunity-based efforts, we are also conscious of seasonality andlocal brands, with each store offering a different variety of products
on sales floors that incorporate regional characteristics.

We will continue to open stores in regions where even traveling to urban areas for shopping is inconvenient, enabling
DCM Nicot to facilitate enjoyment in the daily lives of regional customers, reduce their burdens, and increase theirhappiness, with plans to expand to 125 stores by the end of February 2026, the final year of the third medium-term
management plan. In addition, to ensure DCM Nicot stores remain in the communities where they are opened, we will
pursue even lower cost operations and exhaustive operational manual advances to support regional lifestyles.

(Stores)(Millions of yen)

28,00080

28,00070

24,00060

20,000Net sales(Stores)170

Net sales

Number of stores

Number of stores

24,00021,477150
20,03919,93857
16,931
14,34012,697

32

36

50

49

22

18/2

DCM Holdings Co., Ltd. Integrated Report 2023

19/2

39

20/2

21/2

130
112

16,000

45

22/2

23/2

95

19,815

18,15516,0314,000

017,586

19,636

100

104

106

110

109

40

12,000

30

8,000

70

20

4,000

50

10

0

18/2

Financial Highlights

20,0008,000

Risk Management and Compliance

DCM Nicot net sales and store numbers(Millions of yen)

10,074

Corporate Governance

Hodaka net sales and store numbers

Products not carried by DCM Nicot can be quickly delivered to customers from DCM stores with e-commerce shippingbases, which provides convenience to customers and enables us to leverage Group synergies.

Sustainability

To expand the number of store openings, we will accelerate growth in this business by continuously developing humanresources capable of making proposals and introducing new products that meet the needs of craftsmen while providing
products and services at consistently high standards.

12,000Medium-Term Management Plan

DCM Nicot has two main types of stores, one that carries groceries if there are no supermarkets nearby and grocery
shopping is inconvenient, and another type of store that does not carry groceries.

Hodaka operates 57 stores in 23 prefectures across Japan (as of end of February 2023), with sales exceeding ¥20.0
billion. Since many craftsmen work in different locations across Japan, and some customers travel to Hodaka stores fromneighboring prefectures where Hodaka has no presence, we hope to open stores in all 47 prefectures as soon as
possible to meet the needs of all craftsmen. We expect to expand to 100 stores nationwide by the end of February
2026, the final year of the third medium-term management plan.

16,000

Message from the President

Founded in 2008 with the aim of contributing to the continuationof Japanese craftsmanship culture and techniques, Hodaka
narrows its focus to target craftsmen rather than the vast home
center customer segment. The company made a new start inMarch 2022, transitioning from an operating structure consisting
mainly of divisions within DCM Co., Ltd., to a consolidated subsidiary.

Business Model

Column

90

19/2

20/2

21/2

22/2

23/2

30

23

Medium-Term Management Plan Business Strategies (2)ValuesFurther Pursuit of Low-Cost Operations

Our frontline operations, in which we have been carrying out
improvement activities on an ongoing basis, are adapting not
only to recent changes, such as soaring logistics costs andrising personnel expenses due to the labor shortages inrecent years, but also to changes in the next few years. We
are thus seeking to transition to optimal operations that canbe achieved at a lower cost than at present. It has also
become important to incorporate improvements in employee

Reviews of ordering/deliveries/replenishment frequency
any undue strain on our partner logistics companies as wellas curbing logistics costs—we are also promoting a reductionin the logistics-related impact on the environment. On thestore side, by concentrating the delivery of products morethan we have in the past, new operations will be required for
product acceptance and inspection systems, and thus we arepromoting responses while working to deepen cooperation
with our partner logistics companies.

Improving delivery efﬁciency while
reducing environmental impact

Morning
MondayIn matters relating to the inventories of best-selling
products, it is important to not cause product shortages
by maintaining appropriate inventory levels at distribution
centers. In addition to order lots that vary depending on the
product, there are however other difficulties, such as thedifferences in details that must be taken into consideration
when forecasting demand. To improve inventory
management, we are working to streamline our operations
by devising simplifications centered on reviews of complex,
wide-ranging order conditions and by setting standards toensure that appropriate inventory levels are maintained.
Afternoon

Evening

Conducting reviews of truckclasses and numbers of vehicles

Tuesday
WednesdayThursday
DCM Product Distribution Center

FridayHaving reviewed the delivery methods that we had previously been using, we will efﬁciently
deliver products to stores by combining afternoon and evening deliveries into one.

24

DCM Holdings Co., Ltd. Integrated Report 2023

Installation of self-checkouts

ColumnOverview of DCM advanced technologies Co., Ltd.
DCM advanced technologies Co., Ltd. (DCM-AT) wasestablished in 2022 as a wholly owned subsidiary of
DCM Co., Ltd. to employ talented human resources andrealize speedily, with high quality and at low cost thedigital transformation for which the DCM Group isaiming. DCM-AT’s greatest strength lies in its mid-careerhire employees, who possess excellent digitaltechnology expertise and are characterized by being
composed of business-side employees who are familiar
with important practical matters in the business
operations of home centers. This system enables useroriented systems development compatible with on-site
operations, which in turn leads to increased motivationfor on-site employees and contributes to the realizationof low-cost operations. Enabling developers toexperience the shop floor front lines for themselves also
assists the efficiency of systems development. Even in

Financial Highlights

With regard to the delivery of products from distribution
centers to stores, we are strengthening our efforts to reducethe burden of inspection and display work at stores by
sorting products by aisle and gondola prior to delivering
them. Also, home centers handle a large number of oddshaped items, but delivery efficiency for such difficult to packitems is generally not good. While effectively utilizing theassets at its disposal, the Company is setting up sorting
facilities for odd-shaped items as close as possible to storesand promoting other initiatives that include the building ofa system to conduct deliveries in an efficient manner.

Freshness management app to check expiry dates

Risk Management and Compliance

Deliveries by aisle and gondola, efficient delivery of odd-shaped items, and facing
challenges of measures to avoid being out of stock

Corporate Governance

As an example, we had been separating deliveries from
distribution centers to stores several times a week but havebeen conducting reviews of the number of deliveries in
response to the impending 2024 logistics crisis and otherfactors we are facing. Not limiting our response to simply
reducing the number of deliveries per week, by combining
measures—such as increasing the truck loading efficiency
during delivery, specifying delivery times that do not place

Initiative 2

Examples of initiatives

Sustainability

Initiative 1

working environments and sustainability into our operations.
Under such circumstances, we will reconsider the three
concepts of differentiation, standardization, andsimplification, which are deemed important in chain store
theory when advancing a multistore approach andimprovements in productivity, while promoting changes toour business domains that will enable us to better adapt
to change.

store worker man-hours by promoting the installation ofself-service point-of-sale (POS) cash registers that feature
improved operability. Furthermore, the procedures involved
to sign up for insurance when selling bicycles have been
greatly simplified.
As an example of our making use of customers’ mobile
devices, we developed an app that allows them to check thesales floor on their smartphones, enabling customers tosearch for product display locations by using the app. In theyears to come, we will resolve store problems at storesthrough the promotion of DX and devise ways to reduce thenumber of tasks and improve efficiency. Consequently, at thesame time we will be endeavoring to ensure that more of ouremployees’ time can be devoted to improving customer
service at our stores.

Medium-Term Management Plan

Differentiation, standardization, and simplification tailored to the times ahead

To promote the creation of the mechanisms needed for
low-cost operations, we are working on the active utilizationof digital technology. Previously when digitizing store
operations, there were aspects in which software andsystems were prioritized and promoted, and these were notentirely suitable for improving work efficiency at stores. In
recent years, however, we have changed our approach tosolving store problems by communicating closely with thoselocations that use the existing systems and mechanisms.
Providing a specific example of the results obtained isthe development and implementation of our freshness
management app. As an alarm sounds for products that areclose to their expiry dates when registering them on the app,
we are contributing to a significant reduction in the numberof working hours store staff spend in the checking ofproducts. We are also devising ways to reduce the number ofMessage from the President

There is a reason why the Company engages in low-cost operations as one of its business strategies. Efforts to
reduce the cost of business operations and lower the break-even point may seem easy, but reviewing mature store
operations requires that careful and more effective experimentation and drastic changes in operations based on chain
store theory be deployed without causing confusion. In the process of carrying out numerous M&A transactions andorganizational changes, the Company has been accumulating experience in the making of ongoing business reforms.
This is enabling us to gain a deep understanding of the nature of our business and boldly pursue low-cost operations
without compromising its essence. This can be said to be a major strength of the DCM corporate group. Even in thesehighly uncertain times, we believe that leaner management will be made possible by further strengthening theefforts we have made to date.

Business ModelDX promotion: Work reduction and efficiency improvements by development of store IT tools

the case of large-scale projects for which we have towork on systems development while obtaining thecooperation of an IT vendor, we are striving to develop
fast, high-quality, low-cost systems by accumulating
discussions on an equal footing from the system
planning stage. So that employees can fully demonstrate
their IT skills, we have put in place work systems—suchas telework, fair evaluation and compensation based ona job-based personnel system as well as a fulfilling
welfare program—while providing environments inwhich they can devote themselves to their work withpeace of mind. By having DCM-AT play a central role ina variety of collaborations and business reforms in the
DCM Group as well as in digital transformation for the
future, we will strengthen our ability to respond tochange and improve productivity while assisting inraising the Group’s corporate value.

25

Medium-Term Management Plan Business Strategies (3)ValuesBuilding of Unique BOPIS Style
In addition to its home centers, the DCM Group has several
store brands, including DCM Nicot and Hodaka, and operates
stores of different sizes in 37 prefectures nationwide. By
having formed the stores within the Group into a networkby means of the same BOPIS style system, we are able toprovide our customers with uniqueness and even greater
convenience.
For example, at DCM Nicot home convenience storesthat are opened in areas with relatively small populations,

we mainly stock daily necessities that are purchased
frequently, but when it comes to numbers of products thatexceed that, it is necessary to visit a larger DCM store thatcarries a more extensive product lineup. By having customers
use the BOPIS style at those stores, even if the product theywant is unavailable at the nearest DCM Nicot, we are able
to deliver products to customers quickly by supplying DCM
Nicot stores with products from large DCM stores that
handle EC shipments within the dominant area.

Message from the President

Due to the evolution of the digital society and the further acceleration of the advances in online shopping anddelivery services brought about by the effects of the COVID-19 pandemic, consumers are now able to choose moreconvenient purchasing methods by using their computers and smartphones. On the other hand, online shopping
business operators are being required to review their business content due to soaring logistics and delivery costs
brought about by labor shortages as well as high costs and commodity prices. Under such circumstances, we will
demonstrate our strengths in developing both stores and our EC business by reinforcing our in-store pick-up (BOPIS:
Buy Online Pick-up In Store) initiatives to provide our customers with even greater convenience.

Business Model

Specific example of BOPIS style use 2. Improved convenience in areas where shopping is difficult

Building of unique BOPIS style under full-scale deployment

Provide store
inventory

EC siteProducts

Products

DCM Nicot

Large DCM store

Sales floor area: Approx. 990 m2

Sales floor area: At least 4,950 m2

BOPIS(In-store pick-up)

Shikoku, Chugoku and Kyushu
Stores to open in Kyushu within 2023

DCM Holdings Co., Ltd. Integrated Report 2023

Assembled, maintained
and handed overby DCM staff

Free collection of
unwanted bicycles
Limited to bicycles brought into
store
Maximum of one unwanted bicycle
per bicycle purchased

Customers can complete theircrime prevention registrations
and apply for bicycle
maintenance packs in store.

Hokkaido
Higashi Kariki Store

Financial Highlights

purchased a bicycle via EC, the assembly and maintenance ofthe bicycle can be completed in advance at the pick-up store
for a specified visit date and time, and thus they are never
kept waiting when they visit the store. If customers bring intheir unwanted bicycles, we can take them off their hands forfree and smoothly provide services such as security
registration and bicycle maintenance packs (insurance with
benefits).

As of March 2023, the number of stores that can ship orders
placed via EC from stores was five, but we plan to add threestores in 2023 and expand to 20 stores by the end of fiscal
2025. By increasing the number of stores that can handle
orders placed via EC, it will be possible to shorten the leadtime from order to product delivery, and the shortened
product transportation distances will also serve to reducetransportation costs. This will also lead to a reduction ingreenhouse gas emissions.
If the BOPIS style gains in widespread popularity, thiswill simultaneously improve customer convenience andproduct management efficiency.

Risk Management and ComplianceHome
deliveryTohokuStores to open in 2023
Kanto and Koshin
DCM Ageo Store(Saitama Prefecture)
Kanto and Koshin
DCM Shiroi Store(Chiba Prefecture)Tokai
DCM Atsuta Store (Aichi Prefecture)

Crime prevention
registration number
12345626

Corporate Governance

Expanding number of facilities serving as EC shipment bases to 20 nationwide by fiscal 2025

Benefits of purchasing a bicycle using the BOPIS style

Free shipping forin-store pick-up!

Sustainability

Order products
unavailable in store

Specific example of BOPIS style use 1. In-store pick-up of bicycle
Among the products handled by home centers are many thatcannot be handed over as they are from stock. Bicycle sales
give one example of how customers can be provided witha high degree of convenience by means of the BOPIS style.
First, customers can access not only the EC site but also the
QR code posted on the embedded leaflet and easily place anorder with their smartphones from a wide product lineup that
far exceeds a store’s inventory. For customers who have

Medium-Term Management Plan

We are gradually expanding the service areas where
customers can receive products purchased via our DCM
Online EC site at each DCM Group store. Combining thestrengths of having more than 800 stores in operation
nationwide, including Keiyo Co., Ltd., with the convenience of
our own EC site where customers can place orders anytime,
anywhere, we will make full-scale efforts to form andestablish new ways of making purchases that takeadvantage of the BOPIS style, which enables customers toreceive EC-purchased products at stores. The benefits forcustomers who purchase products via EC and choose to pickthem up at stores include, 1) Lower shipping costs, 2)
Customers can pick up the goods at any time, 3) Can secure
the required quantity of products needed in advance, 4) Can
purchase products that are not in stores, and 5) Facilitates
product returns in cases where the usability or impression
gained of a product turns out to be different.
Having customers come to stores in the BOPIS styleincreases opportunities for them to gain hands-on experienceof a range of in-store products. We also believe that we canwork to set ourselves apart from EC businesses that do not
operate stores through increased communications withcustomers at stores and thereby ascertaining their needs.

Hokuriku and Kinki
Shikoku, Chugoku and Kyushu Stores to open in 2023
DCM Matsumae Store (Ehime Prefecture)

As of March 2023: Five facilities
Scheduled to be added in 2023: Three facilities

27

Medium-Term Management Plan Business Strategies (4)Gross profit margin trends andmedium- to long-term targets
(%)

38.0

50.0
A company
B company

35.0

30.0

35.0%

DCM
20.0

38.0%

36.0

34.0

32.0

10.0

A company

Product development idea contest by employees “Pikka! Egg”

33.3%

31.0

0.0

30.0
2016

2020

2025

2030 (CY)

2016

2020

2025

2030 (CY)28

DCM Holdings Co., Ltd. Integrated Report 2023

Furthermore, we intend to offer good products at affordable
prices by proposing high-priced products offered by othermakers in the mid-tier range through PB development.
We are approaching the SDGs priority issues froma variety of angles. In recent years, our focus has been on
using raw materials that have as minimal environmental
impact as possible. Previously, raw materials with low
environmental impact tended to be more expensive,
but as society as a whole has become more aware of theimportance of a circular society, they can now be utilized
without sacrificing cost compared to the past. We are also
taking measures such as using environmentally certified
materials for product packaging.

Example of a product that was
eventually commercialized
DCM Aluminum Car Sunshade

Can be used regardlessof where the drive
recorder is installed.

As an effort to link the voices and ideas of our employees to product development,
we hold a product development idea contest called Pikka! Egg. All employees are
eligible to subject their ideas for the contest, and outstanding ideas will receive
awards and a chance to be commercialized into products. The program is anindispensable part of our aim for product development from the customer’s
viewpoint by utilizing ideas from employees, who are also consumers.
In fiscal 2022, we received more than 2,500 applications from various storesand departments. The Pikka! Egg contest has three award categories: Golden Egg,
Silver Egg, and Boiled Egg, and 15 entries were eligible for the awards in fiscal
2022. All of the following criteria must be met for an idea to receive the highest
Golden Egg award:(1) High contribution to people’s lives(2) Product must be expected to be in demand after commercialization(3) Product must be unique
Examples of ideas that have won the Golden Egg award include a small
holder for bottle washers and cooking and serving chopsticks, aluminum car
sunshades, and foldable kitchen mats.

Financial Highlights

Focusing on product development in areas with strong business characteristics (DIY, gardening, petcare products, SDGs-related)
In the category of product development, gardening, DIY andpet care products and SDGs-related products, in which we
can demonstrate our strengths as a home improvement
retailer, are priority areas in the current medium-term
management plan. In particular, we intend to further
strengthen our product proposals for gardening and DIY,
which are aligned with our customers’ pursuit of eco-friendly
lifestyles. We aim to enrich our customers’ lives through DIY
by further deepening the fusion of plants and gardening.
For pet care products, we will strengthen our fortes andtake on the challenge of developing new products in a genre
where we have not been able to develop sufficient productsin the past, as people are increasingly moving towarda lifestyle of living with pets after the pandemic.

(1) L egal compliance and ethics(2) Human rights and labor(3) Environment(4) Safety and health(5) E nsuring product safety andquality

Risk Management and Compliance

26.2%

35.0%

DCM

33.0

Procurement Policy

Corporate Governance

40.0

B company

37.0• Patent rights• Design rights• Trademark rights• Unfair Competition Prevention Act• Act against Unjustifiable Premiums andMisleading Representations• Act on Pharmaceuticals and Medical Devices• Household Goods Quality Labeling Act• The Plant Variety Protection and Seed Act• Act on Welfare and Management of Animals• Quality design

Sustainability

39.0

In terms of the SDGs and quality control, we check the status of compliancebased on the Code of Conduct of our Procurement Policy, with which all
DCM suppliers are required to comply with. In addition to the items (1)through (4) listed on the right, which are common items for retailers in
Europe, the U.S., and Japan, a feature of DCM is its inclusion of (5) “ensuring
product safety and quality” to reflect its responsibilities as a manufacturer.
When evaluating a supplier’s factory, we scrutinize its social
responsibility and quality according to an assessment sheet we have
prepared, and we also refer to reports from third-party organizations.
During the period of the third medium-term management plan, we plan
to conduct assessments of all new transaction factories and all factories withtransaction value above a certain level.

Main items to be verified in terms ofintellectual property and quality
control when developing PB products

Medium-Term Management Plan

Trends in PB product sales composition ratio andmedium- to long-term targets

The Intellectual Property and Quality Control Department supports productdevelopment from the perspectives of legal compliance, quality, security, andsafety to ensure that our customers can use our DCM brand PB products,
more safely and with peace of mind.
In developing PB products, we thoroughly check in advance for potential
infringement of any intellectual property rights such as patents, designs,
trademarks, and copyrights before consulting with the Product Development
Committee, which makes decisions on commercialization. This reduces therisk of development delays due to violations of intellectual property rights
once product development is fully in progress. We also work to enhance thevalue of the DCM brand by filing design and trademark registrations for
products we are developing as needed.

Message from the President

In the past few years, the pace of product development
had slowed to some degree, as the COVID-19 pandemic
reduced the frequency of direct visits to overseas business
partners and made it difficult to communicate face-to-face.
That said, we believe we are now in an environment where
we can work on PB product development at a faster pace
now that borders are reopening in many countries, including
Japan. We intend to raise the gross profit margin to 35% in
the medium term and to 38% in the long term, driven by anincrease in the percentage of PB products in our sales mix.

50.0%

Business Model

In developing PB products, DCM’s basic policy is to develop
only unique products that offer new value to customers,
including their selling prices, as “DCM brands.” This policy
will remain unchanged in the process of increasing the PB
ratio to 35% of net sales in the medium term and to 50% in
the long term. To increase the PB ratio, we will continue tooffer new products that are unique to DCM by linking eachorganization that is involved in “products x sales floor x
sales promotion.”

60.0

ColumnIntellectual property and quality control initiatives at DCM

Basic policy for PB product development(%)

ValuesDeepening the Private Brand (PB) Product Development System

Comes with two
suction cups

29Medium-Term Management Plan Business Strategies (5)ValuesM&A Strategy
Approach to M&A strategy

to the mutual flow of customers between virtual and real
stores in the establishment of the BOPIS (buy online, pick up
in-store) business model that we are focusing on. We arealso striving to revitalize our sales floors by selling MAXZEN,a PB product of XPRICE in real stores, as well as other home
appliance PB products with the potential for further expansion.
In addition to the investment in the e-commercebusiness, XPRICE, we will consider partnerships andinvestments in other industries to become an integrated
business that comprehensively makes people’s lives more
comfortable, including housing equipment; renovation, reuse,
and recycling; pro-use tools; and online services.

Message from the President

Medium-Term Management Plangrowing our sales network of products including PB
products, reduce procurement costs, and enhance
profitability through the development of new products.
The Group has also worked to reduce costs by, for example,
unifying the business model of its stores. Furthermore, theexpansion of business areas has provided greater
opportunities for mobility and career advancement for theemployees of each Group company.
The domestic home improvement retail market ismaturing. For this business to continue to grow amid social
challenges such as a declining birthrate, aging population,and depopulation in rural areas, we believe it is critical toestablish an overwhelming No. 1 position and to be
a company that can appropriately identify changing customer
needs and continue to enhance their convenience. We hope
to continue to increase the number of colleagues who will
join us in pursuing our aspirations.

Eleven companies have joined the DCM Group since theestablishment of DCM Japan Holdings Co., Ltd. (renamed
DCM Holdings Co., Ltd. in 2010) in September 2006.
Expanding our business scale through M&A is a key strategy
for us. Our approach to M&A, including capital participation
and business transfers, follows two basic aspects: 1) growthof the home improvement retailer business through capital
participation and alliances with other home improvement
retailers, and 2) various alliances, cross-industrial
partnerships, and functional reinforcement to become an
integrated business that comprehensively makes people’s
lives more comfortable.
Until now, we have made capital participation andbusiness acquisitions in peer companies to grow our home
improvement retailer business and enhance our corporate
value by expanding our catchment area and purchasing
power. In the past, we were able to increase sales by

As we move forward in our initiatives to become an
integrated business that comprehensively makes people’s
lives more comfortable, we will not only expand our home
improvement business through M&A, but also aim for M&A
and business collaboration to maximize the enrichment ofpeople’s lives by supplementing elements and businessdomains that are lacking in response to uncertain socialchanges ahead. Based on this approach, in March 2022,
we made a subsidiary of XPRICE, Inc., an e-commerce
platform focused on home appliances. In addition tostrengthening the e-commerce business, which has beenlacking, XPRICE is expected to make a significant contribution

Business Model

Various alliances, cross-industrial alliances and functional enhancements to become an integrated
business that comprehensively makes people’s lives more comfortable

Integrated business that comprehensively makes
people’s lives more comfortable

Sustainability

Renovation

M&A transition

Reuse andrecyclePro-use tools

Company nameYears

Major areas

Capitalparticipation/
alliances

Osaka Prefecture, Nara Prefecture,
Wakayama Prefecture, Mie Prefecture

Acquiring majority
ownership

Home Center Sanko Co., Ltd.

June 2008

Kumamoto Prefecture, Fukuoka Prefecture

Acquiring majority
ownership

Home Expo Co., Ltd.

October 2014

Aichi Prefecture

Acquiring majority
ownership

The home improvement retail business of
Fujita Sangyo Co., Ltd.

October 2014

Hokkaido

Business transfers

Sanwado Corp.

July 2015

Aomori Prefecture, Hokkaido, Akita Prefecture

Acquiring majority
ownership

The home improvement retail business of
UNY Holdings Co., Ltd.

June 2016

Aichi Prefecture, Gifu Prefecture, Nara Prefecture,
Mie Prefecture

Business transfers

Kuroganeya Co., Ltd.

December 2016

Yamanashi Prefecture, Kanagawa Prefecture,Tokyo

Acquiring majority
ownership

Keiyo Co., Ltd.

January 2017

Kanto, Koshin, Tokai, Kinki, Tohoku

Equity-method
affiliates

T.O. Retailing Co., Ltd.

July 2021

Hokkaido

Capital andbusiness alliances

Kanseki Co., Ltd.

July 2022

Tochigi Prefecture, Ibaraki Prefecture, Fukushima
Prefecture, Gunma Prefecture

Capital andbusiness alliances

Enhancing functions to realize an integrated lifestyle comfort company
Company name

XPRICE Inc.

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DCM Holdings Co., Ltd. Integrated Report 2023

Years

March 2022

Major areas

Capitalparticipation/
alliances

Operation of one of Japan’s largest e-commercesites focusing on home appliances

Acquiring majority
ownershipHome
improvement store
area expansion

Specialty storesHome improvement center
ColumnIntroduction to XPRICE Inc.
XPRICE was founded in 2004 as a website operator focusing
on home appliances and has since continued to grow while
expanding its product range. XPRICE not only sells its
mainstay home appliances products at competitive prices,
but also works to maximize customer convenience and peaceof mind by offering nationwide coverage for appliance set up
and installation, extended warranties, support for appliancerecycling, and diverse payment methods.
Additionally, the company offers approximately 100
items under its MAXZEN private brand. These cost-effective
home appliances that thoroughly pursue a balance between
functionality and price have earned a loyal following.
Cumulative sales of MAXZEN brand products have exceeded
1.3 million units.

Financial Highlights

December 2007

Online DX

Risk Management and Compliance

O-JOIFUL CO., Ltd.

Housingequipment

Corporate GovernanceArea expansion through capital participation in and alliances with other home improvement center retailers

Xtreme

PRICE

The company name was coined by combining extreme (or theultimate) and price. The brand embodies XPRICE’s ambition toprovide the ultimate service unique to home appliance e-commerce
at a price customers can trust.

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