Senshukai Co., Ltd.
Fiscal 2010 Earnings Presentation
February 3, 2011

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

1

Contents. Results of Consolidated Operations for Fiscal 2010
. Consolidated Earnings Forecasts for Fiscal 2011222

. Results of Consolidated Operations for Fiscal 2010333

Fiscal 2010 Consolidated Results Highlights

Profits increased despite lower sales from the slump in personal
consumption
Sales declined as consumers exhibited a strong preference for low-priced
items, held back on new purchases, and due to poor weather
Profits rose strongly due to an improvement in the cost ratio from a decline
in valuation losses, and due to broad cuts in SG&A expenses

Net assets increased and the shareholders’ equity ratio recoveredto 43.7%
Net assets steadily improved due to the booking of profits
The shareholders’ equity ratio recovered to 43.7%

Operating cash flow improved significantly due to more efficient useof working capital
Quick collection of accounts receivable due to shorter grace periods
Steady decline in loans and bonds payable444

Consolidated Results of Operations for Fiscal 2010 (YoY Comparison)(Millions of yen)

Fiscal 2009

Fiscal 2010YoY change% to netsales% to netsales

Amount%Net sales

147,292-

136,859--10,433-

Cost of sales

78,92753.6%

69,44750.7%-9,480-2.9%

Gross profit

68,36446.4%

67,412

49.3%

-952

2.9%

SG&A expenses

70,77048.0%

63,98946.8%-6,780-1.2%

Operating income(loss)-2,405

-1.6%

3,422

2.5%

5,827

4.1%

Ordinary income(loss)-1,410

-1.0%

3,167

2.3%

4,577

3.3%

Net income (loss)-3,811

-2.6%

2,037

1.5%

5,848

4.1%

Net income (loss) pershare (Yen)-84.18-

47.04

---

Return on equity

-9.3%

-

5.3%

---555

Trend in Sales and Profits
Consolidated Net Sales andConsolidated Gross Profit Margin

Operating Income and Operating Margin Trends(100 millions of yen)(100 millions of yen)
Net sales

1,567

Grross profit margin

1,582

1,481

48.4%

48.3%

46.4%

Operating income

3.4%

Operating margin

52.9

1,472
1,368

48.9%

3.1%

2.5%

46.0

49.3%

34.2

1.5%
24.1

-24.0
Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Fiscal 2010

-1.6%
Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2009

Fiscal 2010

Sales continued to decline due to weak personal consumption, but profits recovered in Fiscal 2010 666

Consolidated Balance Sheet for Fiscal 2010 (YoY Comparison)Dec. 31, 2009 Dec. 31, 2010 Difference(Millions of yen)

Remarks

AssetsCurrent assets

42,11742,656539

Merchandise and finished goods [Increase in initialinventories]
Decrease in notes and accounts receivable-trade, increase incash and deposits

Noncurrent assets

49,72047,430-2,289Investment securities [sales, redemption, impairment loss, etc.]

Total assets

91,83790,086-1,750Current liabilities

41,321

41,318-2

Noncurrent liabilities

12,6099,356-3,252

Total liabilities

53,93050,675-3,254

Shareholders’ equity

48,14049,966

1,826

Valuation andtranslation adjustments-10,247-10,555

-307

14

-

-14

37,906

39,411

1,504

91,83790,086-1,750Liabilities
Trade payables [Increase due to the growth in inventories]
Short-term loans payable [decrease due to repayments]
Bonds payable [decrease due to redemption]
Long-term loans payable [decrease due to repayments]

Net assets

Minority interests
Total net assets
Total liabilities and netassets

Retained earnings [booking of net income]777

Consolidated Statements of Cash Flows for Fiscal 2010 (YoY Comparison)(Millions of yen)

Fiscal 2009

Fiscal 2010

Difference

Net cash provided by (used in)operating activities

521

9,585

9,064

Net cash provided by (used in)investing activities-1,141-1,09447

Net cash provided by (used in)financing activities

1,035-6,417-7,452

Effect of exchange rate change on cash
and cash equivalents-2-14-11

Net increase (decrease) in cash andcash equivalents

413

2,060

1,646

Cash and cash equivalents at end ofperiod

8,795

10,8552,060

Net cash provided by operating activities increased due to decrease in trade receivables

888

Net Sales by Business Segment for Fiscal 2010 (YoY Comparison)(Millions of yen)

-7.1%
Fiscal 2009

Fiscal 2010

147,292-9.4%

136,859
119,610

108,321-12.8%+14.1%

16,325
11,357

Catalog Business

18,632

9,905

Hanpukai Business

Other Businesses

Consolidated

Sales declined in the catalog and hanpukai businesses due to a decline in memberships and average prices
9Sales in “other businesses” rose due to increases in the corporates and bridal businesses
99Fiscal 2010 Trend in Sales by Product Category
Fiscal 2009

(Millions of yen)

Fiscal 2010

-6,77858,57551,797-1,810-2,06829,312-1,348+1,92227,501
21,495

15,12919,426-349

18,974

13,781
5,728

Apparel

17,051

Fashion accessories

Interior goods

Household goods

5,378

Foods

OthersIn the apparel category, sales were weak for outerwear but strong for kids' wear. In the interior goods
10category, sales of furniture and storage products were slow.
1010Fiscal 2010 Overview of Gross Profit and SG&A Expenses(Millions of yen)

Consolidated Gross Profit Margin+2.8%

Purchasing cost ratio roughly flat YoY
Decrease in charge-off and valuation losses- Charge-off-410 million yen- Valuation losses-3,770 million yen

Consolidated SG&A Expenses-6,780

Sales expenses: catalog costs declined due to more efficient
distribution -3,390 million yen(Catalog circulation: -11.2 million issues)
Other sales promotional costs declined -720 million yen
Administrative expenses: personnel expenses, commission fee,rent, miscellaneous expenses, and fixtures andsupplies expenses were cut -2,370 million yen

11Charge-off and valuation losses declined, catalog costs declined, and various other costs were cut
1111

Internet-related Indicators
Internet Sales(including mobile sales)

Number of Internet Members(100 millions of yen)

623

663

671

(10,000 members)

653

730

557

664
606

Via catalog

542
467

Internet only
Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

* Via catalog : Customer reads a catalog then purchases by Internet, entering catalog number* Internet only: Customer makes purchase through the Internet by putting products into online shopping cart

Overall Internet sales declined slightly, but sales over the Internet only increased

121212

Trend in Catalog-related Indices
Buying Customers (the number of customers
that ordered in one year)(1,000 members)

Average Sales per Customer and Annual
Order Amount(Yen)

The average sales per order continued to decline, but the annual order frequency remained firm at 2.913
1313

Measures Adopted in the Catalog Business in Fiscal 2010
Renew Belle Maison’s interior and sundries catalog!
Launch catalogs “sumutoco” and “Remie style” !
“Shin Sumai to Zakka” and “HOME BASE” → “sumutoco”
Sales generally steady thanks in part to hit products“Shin Seikatsukan” → “Remie style”
Strong sales of “mini labo” brandmen’s kurasufuku⇒ We believe we have as manypotential men customers as wehave women members
We aim to get them to shop
through women
Issued one million copies ineach of March and September,sales steady

Otona no Fuku
Targeted customers among thosealready familiar with Belle
Maison, and greater sales
Targeted customers around 50years oldIssued one million copies in
September; sales strong

Captured new customers through the reorganization of media and the issue of three new catalogs
14(men’s kurasufuku, Otona no Fuku, and la fite (plus size clothings))
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Fiscal 2010 Current Situation of Hanpukai Business
Fiscal 2009

Fiscal 2010

11,357

9,905-1,451

38.7

33.1

-5.6

Net sales(Millions of yen)
Hanpukaimembership(10,000 members)

Sola Iro Ensemble andother air fresheners
510,000 units

DifferenceDue to a slump in new
product sales
Ongoing decline inmembers

Soup na Shiawase

Chokochoko series

470,000 units

950,000 units

Sales declined, but we achieved a profit thanks in part to hit products

151515Fiscal 2010 Sales in Other Businesses

Businesses(Millions of yen)

Fiscal 2009

Fiscal 2010

Difference

Bridal

7,002

8,149

1,147

Weddings increased as weopened a new wedding hall

Corporates

6,096

7,651

1,555

Increase in contract

Pet

1,538

1,483-55

Storefront business(excluding outlet)

848

943

95

Others840

405-434

Total

16,325

18,632

2,307

Increase in Kurasufuku store
openings (total network of 11stores)
Sales declined due to theliquidation of subsidiary B·B·S* Bridal business: Combined sales of Dears Brain and Belle Mariee Chapelle

Sales and profits rose due to an increase in weddings and the opening of a new wedding hall at Dears Brain
161616

Fiscal 2010 Non-operating Income (Expenses) / Extraordinary Income (Loss)(Millions of yen)
Non-operating income
Dividends income
Foreign exchange gains

Fiscal2009314

Fiscal
2010
105

1,403

-Difference-208-1,403Extraordinary incomeFiscal
2009

Fiscal2010

Difference

Gain on sales ofnoncurrent assets

11312

Other extraordinary
income

4252

9

Total

4365

21

Fiscal
2009

Fiscal2010

Difference

Other431

513

81

Total

2,148

619

-1,529Fiscal2010

Difference

Extraordinary loss

279

-38

95

217

121

256

Loss on sales andretirement ofnoncurrent assets
Loss on valuation ofinvestment securities

573

253

-320

Loss on sales ofinvestment securities576

110-465

356

385

28-

317

317

Non-operating expenses

Fiscal2009

Interest expenses
Foreign exchange
losses317-256

Commission fee450--450

Bond issuance cost127--127

Loss on valuation ofcompound financial
instruments

-164

164

Impairment loss

Other

259

173

-85

Loss on liquidation ofbusiness

Total

1,154

873

-280

Other

124

73

-50

Total

1,726

1,358-368

Booked foreign exchange losses from yen appreciation, and impairment losses

171717

181818

. Consolidated Earnings Forecasts for Fiscal 2011

191919

Consolidated Earnings Forecasts for Fiscal 2011 (YoY Comparison)(Millions of yen)

Fiscal 2010

Fiscal 2011

% to net sales

YoY change% to net sales

Amount%Net sales

136,859-

137,500-

641-

Cost of sales

69,44750.7%

71,181

51.8%

1,734

1.1%

Gross profit

67,412

49.3%

66,31848.2%-1,094-1.1%

SG&A
expenses

63,98946.8%

64,318

46.8%

329

0.0%

Operatingincome

3,422

2.5%

2,000

1.5%

-1,422-1.0%

Ordinary
income

3,167

2.3%

2,700

2.0%

-467

-0.3%

Net income

2,037

1.5%

2,000

1.5%

-37

0.0%

We forecast net sales will be on a par with last fiscal year, operating income will decline as rising procurement costs boost the cost ratio, andnet income will be on a par with last fiscal year

202020Projected Net Sales by Business Segment for Fiscal 2011 (YoY Comparison)(Millions of yen)

+0.5%
Fiscal 2010

Fiscal 2011

136,859+3.7%
108,321

137,500

112,277-6.1%-14.6%
18,632

9,905

Catalog Business

15,921

9,302

Hanpukai Business

Other Businesses

Consolidated

We forecast an increase in catalog business sales due to the capture of new customers, but a decline in other21
business sales due to a decline in contract sales
2121

Fiscal 2011 Topics
Ⅰ Cross media promotion
Implement cross media promotion to improve/raise awareness of the Belle Maison brand, andcapture new customers!
Draw in new customers by advertising across a variety of media including
television, newspapers (inserts), and the Internet
Nationwide television advertising campaign from April
Focus on creating a favorable impression for the Belle Maison brand

Ⅱ Group businesses, growth strategy
Dears Brain:
New wedding hall opened in Chiba

Shanghai Senshu Merchant and Commerce Co., Ltd.:
Expand store network in China“The Meets Marina Terrace”
Develop the business foundation,centered on stores with closely
monitored profitability, by closely
watching market trends andgrasping market characteristics
Opened in January, boosting
network to 13 halls

Target a network of 11 storesin Fiscal 2011
222222

Capital Expenditures / Depreciation Expenses
Capital Expenditures(Millions of yen)

Depreciation Expenses

3,506
Intangible assets

3,211
2,873
2,624

2,062
Property, plant and equipment
Forecast

Forecast

23
2323

Schedule of Dividends and Results Announcements
Senshukai’s basic policy regarding dividends is to appropriately return profits to shareholders bymaintaining stable dividends that take into account a payout ratio while at the same timestrengthening the business foundation with retained earnings.
Based on this policy and in light of Fiscal 2010 consolidated results, Senshukai raises its planned
yearend dividend payment by 2 yen per share, from 6 yen to 8 yen, and together with the interim
dividend of 6 yen, this translates into a total annual dividend of 14 yen per share.
For Fiscal 2011, Senshukai plans an annual dividend of 14 yen per share (7 yen each at interim andyearend), for a payout ratio of 30.3%.
Date of earnings announcements for Fiscal 2011
- April 28 (Thu)First quarter of Fiscal 2011

- July 28 (Thu)
Second quarter of Fiscal 2011
- July 29 (Fri)Presentation for earnings for second quarter of fiscal 2011 (Tokyo)- October 28 (Fri) Third quarter of Fiscal 2011
The forward-looking statements contained in this earnings presentation are based on informationthat was available at the time. Actual results could differ significantly from these projections due toa variety of factors.

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