Summary of Financial Results for the First Quarter of Fiscal Year 2015
(Three Months Ended March 31, 2015)[Japanese GAAP]
April 24, 2015

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange, First Section
8165
URL: http://www.senshukai.co.jp
Mr. Michio Tanabe, President and Representative Director
Mr. Hiroyuki Hoshino, Managing Director, Executive Officer,
General Manager of the Corporate Development Division Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: May 13, 2015
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting: None
Stock code:
Representative:
Inquiries:(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 1st Quarter of 2015 (January 1, 2015 – March 31, 2015)(1) Consolidated operating results (cumulative)(Percentages represent changes from the same period of the previous fiscal year)
Operating income
Ordinary income
Net income

Net sales
Millions of yen%

Millions of yen%

1Q 201531,086 (16.5)(1,817)
1Q 2014
37,2298.0
1,012
Note: Comprehensive income (millions of yen)
1Q 2015: (972) (- %)-Millions of yen

Net income per share

Diluted net income per share

Yen

Yen

(26.89)12.62-

1Q 2015
1Q 2014%

Millions of yen(1,719)1,059 341.2
1Q 2014: (87) (- %)%(1,164)546 176.4(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

1Q 2015
101,316
Fiscal Year 2014
100,785
Reference: Shareholders’ equity (millions of yen) 1Q 2015: 51,668

51,721
53,160Net assets per share
%

Yen

51.0
52.7
Fiscal Year 2014: 53,160

1,193.05
1,227.52

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Yen

Year-end

Total

Yen

Yen

Yen

-

12.00

24.00

-

8.00

16.00

Fiscal Year 2014
12.00
Fiscal Year 2015
Fiscal Year 2015 (forecasts)
8.00
Note: Revision to the most recently announced dividend forecast: None

3. Consolidated Outlook for Fiscal Year 2015 (January 1, 2015 – December 31, 2015)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Net income
Operating income
Ordinary income
Net income
per share% Millions of yen% Millions of yen

2Q 2015 (cumulative)
74,000(0.1)
1,050 (42.7)
Full Year 2015
146,000
2.4
3,200
3.6
Note: Revision to the most recently announced consolidated outlook: None

1,250
3,500

% Millions of yen(35.8)
(1.4)

700
2,000

%

Yen

(23.4)
11.2

16.16
46.18

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Matters Related to Summary Information (Notes), (2) Application of Special Accounting Methods
for Presenting Quarterly Consolidated Financial Statements” on page 3 for further information.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at end of period (including treasury shares)
1Q 2015:

47,630,393 sharesFiscal Year 2014:

47,630,393 sharesFiscal Year 2014:

4,322,649 shares

1Q 2014:43,308,491 shares

2) Number of treasury shares at end of period
1Q 2015:

4,322,711 shares

3) Average number of shares outstanding during the period
1Q 2015:

43,307,715 shares* Disclosure regarding the implementation of quarterly review procedures
These quarterly financial results materials are not subject to quarterly review procedures based on the Financial Instruments
and Exchange Act. Thus, at the time of its disclosure, the quarterly financial statement review procedures based on the
Financial Instruments and Exchange Act have not been completed.
* Cautionary statement with respect to forward-looking statements
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page3, “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts
and Other Forward-looking Statements.”

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Matters Related to Summary Information (Notes)

3(1) Changes in Significant Subsidiaries during the Period

3(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

3(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements

3

3. Quarterly Consolidated Financial Statements

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6

Quarterly Consolidated Statement of Income(For the Three-month Period)

6

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)7(3) Notes to Quarterly Consolidated Financial Statements

8(Going Concern Assumption)

8(Significant Changes in Shareholders’ Equity)

8(Segment and Other Information)

8(Subsequent Events)

9-1-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter (January 1, 2015 to March 31, 2015) of the current fiscal year, the Japanese economy continued
to recover at a moderate pace due to higher earnings, primarily in export industries, and other benefits ofeconomic stimulus measures by the government and monetary easing by the Bank of Japan. However, personal
consumption remains lackluster. The weaker yen is making consumer products more costly, real disposal income
continues to decline, and consumers are still reluctant to make purchases following the April 2014 consumption
tax hike. The persistent weakness of the recovery in personal consumption in Japan makes the outlook for theentire retail sector unclear.
The Senshukai Group is currently in the second year of the medium- to long-term management plan “Innovate for
Smiles 2018” that covers the five-year period ending in 2018. All group companies are focusing their energy onachieving the goals of this plan.
Net sales in the first quarter decreased 16.5% year-over-year to 31,086 million yen because the downturn inpersonal consumption after the April 2014 consumption tax hike has still not ended.
There was an operating loss of 1,817 million yen compared with operating income of 1,012 million yen in thesame period of the previous fiscal year. This loss was caused by the decline in sales and an increase in the cost of
sales ratio as the weaker yen raised the cost of merchandise.
Ordinary loss was 1,719 million yen compared with an ordinary income of 1,059 million yen in the same periodof the previous fiscal year) and net loss was 1,164 million yen compared with a net income of 546 million yen in
the same period of the previous fiscal year.
Overview by segment(Mail-order Business)
Consolidated sales in the mail-order business, centered on the catalog and the Internet businesses, decreased
18.0% year-over-year to 27,558 million yen in the first quarter. One reason is that the rush to make purchases inthe same period of the previous fiscal year before the consumption tax hike ended. In addition, sales were held
down by the prolonged weakness in consumer sentiment after the tax hike. Another negative factor was thedecision to cancel the cross-media promotions that took place in February 2014. Furthermore, the revised
promotional campaigns for our good customers that we started in 2015 have not produced results as expected.
These customers pushed back their purchases more than we anticipated during the first quarter, which was aperiod of transition in our promotional activities.
There was an operating loss of 1,686 million yen compared with operating income of 890 million yen in the same
period of the previous fiscal year. Benefits of cuts in selling, general and administrative expenses were more thanoffset by an increase in the cost of sales ratio caused by the yen’s weakness.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, decreased 10.7%
year-over-year to 2,368 million yen in the first quarter, because of the large number of weddings in the firstquarter of 2014 prior to the consumption tax hike. Operating loss was 216 million yen, compared with anoperating income of 15 million yen in the same period of the previous fiscal year.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, increased
14.9% year-over-year to 1,002 million yen, and operating income increased 15.0% to 108 million yen.
(Others)
Consolidated sales in other businesses, which provides services business (primarily insurance and credit card
services) and childcare business, increased 34.4% year-over-year to 157 million yen. Operating loss was 22
million yen, compared with an operating income of 12 million yen in the same period of the previous fiscal year.

-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 101,316 million yen at the end of the first quarter of the current fiscal year, an increase of 531
million yen from the end of the previous fiscal year.
Current assets decreased 1,822 million yen to 51,731 million yen. The main factors were decreases of 2,137
million yen in notes and accounts receivable-trade, and 1,361 million yen in accounts receivable-other, while
there were increases of 876 million yen in cash and deposits, 541 million yen in merchandise and finished goods,
and 206 million yen in other. Non-current assets increased 2,353 million yen to 49,584 million yen. The main
factors were increase of 1,380 million yen in property, plant and equipment, 764 million yen in investments andother assets, and 208 million yen in intangible assets.
Current liabilities decreased 1,914 million yen to 31,556 million yen. The main factors were decreases of 1,912
million yen in other and 903 million yen in income taxes payable, while there was an increase of 727 million yen
in accounts payable-trade. Non-current liabilities increased 3,885 million yen to 18,039 million yen. The main
factor was an increase of 4,457 million yen in long-term loans payable, while there was a decrease of 450 million
yen in bonds payable.
Net assets decreased 1,439 million yen to 51,721 million yen. The main factors were decreases of 1,642 million
yen in retained earnings and 355 million yen in deferred gains or losses on hedges, while there was an increase of
494 million yen in valuation difference on available-for-sale securities. Consequently, the equity ratio was 51.0%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Senshukai currently maintains its consolidated outlook for the current fiscal year (January 1, 2015 to December
31, 2015) that was released on February 5, 2015.
2. Matters Related to Summary Information (Notes)(1) Changes in Significant Subsidiaries during the Period
Not applicable.
(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements(Calculation of tax expense)
The tax expenses are calculated by first estimating the effective tax rate after the application of tax effectaccounting with respect to income before income taxes and minority interests during the fiscal year in which thequarter under review falls, and multiplying that rate by the income before income taxes and minority interests forthe quarter under review. However, the Company uses legally stipulated effective tax rates to calculate tax
expenses for cases in which using estimated tax rates gives a noticeably irrational result.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Not applicable.

-3-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2014
(As of Dec. 31, 2014)

1Q 2015(As of Mar. 31, 2015)

AssetsCurrent assets
Cash and deposits

7,910

8,787

Notes and accounts receivable-trade

6,622

4,485

Merchandise and finished goods

21,591

22,132

Accounts receivable-other

9,511

8,150

Other

8,230

8,436

(311)

(260)

53,55451,731

Buildings and structures, net

13,963

14,983

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Land12,311

12,245

Other, net

2,801

3,227

Total property, plant and equipment

29,07530,456

Goodwill

2,225

2,452

Other

3,154

3,137

Total intangible assets

5,380

5,589

Investment securities

6,155

6,806

Other

6,885

6,998

Intangible assets

Investments and other assets

Allowance for doubtful accounts

(265)

(265)

Total investments and other assets

12,774

13,53847,231

49,584

100,785

101,316

Total non-current assets
Total assets-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

(Millions of yen)
1Q 2015(As of Mar. 31, 2015)

Fiscal Year 2014
(As of Dec. 31, 2014)
Liabilities
Current liabilities
Electronically recorded obligations-operating

12,124

12,077

Accounts payable-trade

5,397

6,124

Short-term loans payable

2,747

2,781

Current portion of bonds

700

800

Income taxes payable

915

11

Provision for sales promotion expenses

219

307

Other

11,367

9,454

Total current liabilities

33,47031,556

Non-current liabilities
Bonds payable

450-

Bonds with subscription rights to shares

7,000

7,000

Long-term loans payable

3,510

7,967

Net defined benefit liability
Other
Total non-current liabilities
Total liabilities

84

91

3,109

2,980

14,15318,03947,624

49,595

20,35920,359Net assets
Shareholders’ equity
Capital stock
Capital surplus

21,03821,038Retained earnings

17,086

15,444

Treasury shares(2,776)(2,776)

Total shareholders’ equity

55,70754,065

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,261

1,755

Deferred gains or losses on hedges

2,780

2,424

Revaluation reserve for land

(6,724)(6,712)135

135(2,546)(2,397)

Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

-5-

-

52

53,16051,721

100,785

101,316SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Three-month Period)
1Q 2014(Jan. 1, 2014 – Mar. 31, 2014)(Millions of yen)
1Q 2015(Jan. 1, 2015 – Mar. 31, 2015)

Net sales

37,22931,086

Cost of sales

19,965

17,297Gross profit

17,264

13,788Selling, general and administrative expenses

16,252

15,606

Operating income (loss)

1,012(1,817)

Interest income

825

Dividend income

15Gain on adjustment of account payable

53

54

Other

57

74

Total non-operating income

121

159

54

48

Non-operating income

Non-operating expenses
Interest expenses
Other

19

13

Total non-operating expenses

74

61

1,059

(1,719)Gain on sales of non-current assets-

1

Gain on sales of investment securities

0-

Total extraordinary income

01

Ordinary income (loss)
Extraordinary income

Extraordinary losses
Loss on sales and retirement of non-current assets

70

Impairment loss-

65

Total extraordinary losses

7

65

1,052

(1,783)

Income taxes

504

(618)

Income (loss) before minority interests547(1,164)0-546(1,164)

Income (loss) before income taxes and minority interests

Minority interests in income
Net income (loss)-6-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

(Quarterly Consolidated Statement of Comprehensive Income)(For the Three-month Period)
1Q 2014(Jan. 1, 2014 – Mar. 31, 2014)(Millions of yen)
1Q 2015(Jan. 1, 2015 – Mar. 31, 2015)

547(1,164)

Valuation difference on available-for-sale securities

(49)

494

Deferred gains or losses on hedges

(564)

(355)

-

53

Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method

(15)

0

(6)

(1)

Total other comprehensive income

(634)

191

(87)

(972)

Comprehensive income attributable to owners of parent

(87)

(972)

Comprehensive income attributable to minority interests

0-

Income (loss) before minority interests
Other comprehensive income

Revaluation reserve for land

Comprehensive income
Comprehensive income attributable to-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Not applicable.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Segment and Other Information)
I 1Q 2014 (Jan. 1, 2014 – Mar. 31, 2014)
1. Information related to sales and profit or loss for each reportable segment(Millions of yen)

Reportable segment

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

Corporates
Sub-total
business

Others(Note 1)

Total

Amounts shown onquarterly
consolidated
Adjustment
statement of income(Note 2)Mail-orderbusiness

Bridalbusiness

33,5872,652

871

37,112

117

37,229-37,229

173

-

11

184

0

184

(184)

-

33,7602,652

882

37,296

117

37,413(184)

37,229Segment profit
890
15
94
999
12
1,012
1,012
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist mainly of
the services business primarily offering insurance and credit card services.
2. Segment profit is consistent with operating income shown on the quarterly consolidated statement of income.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.
II 1Q 2015 (Jan. 1, 2015 – Mar. 31, 2015)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

Corporates
Sub-total
business

Others(Note 1)

Total

(Millions of yen)Amounts shown onquarterly
Adjustment
consolidated(Note 2)statement of income(Note 3)Mail-orderbusiness

Bridalbusiness

27,558

2,368

1,002

30,928157

31,086-31,086

186

-

60

246

0

246

(246)

-

27,744

2,368

1,062

31,175

157

31,333(246)

31,086

Segment profit (loss)(1,686)(216)
108(1,794)(22)(1,817)(0)(1,817)
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist mainly of
the services business primarily offering insurance and credit card services, and childcare business.
2. The (0) million yen adjustment to segment profit (loss) comprises elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with operating loss shown on the quarterly consolidated statementof income.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
No major events or changes occurred.

-8-

SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

(Subsequent Events)
Capital and business alliance, issuance of new shares and disposal of treasury shares through a third-party
allotment.
At the Board of Directors meeting held on April 17, 2015, resolution was approved to establish a capital andbusiness alliance agreement with J.FRONT RETAILING Co.,Ltd. (JFR) and to issue new shares through thethird-party allotment to this company, as well as the disposal of treasury shares (the “Third-party Allotment”).
The agreement was signed on the same day.
In association with the Third-party Allotment, JFR purchased Senshukai stock from five shareholders as of April
17, 2015. Following these purchases of its stock by JFR, Senshukai expects change in its largest shareholder andother affiliated company.
I. Capital and business alliance
1. Reason for the capital and business alliance
As a “Women’s Smiles Company,” Senshukai provides wide variety of original merchandise such as apparel,
accessories, furniture and other products to women in their 30s to 50s by using primarily the Belle Maison
mail-order business. In 2000, Senshukai was one of the first companies in its industry to start an e-commercebusiness. Senshukai has accumulated considerable expertise in the mail-order business from its involvement inthis business for many years. To achieve more growth in corporate value, Senshukai established a medium-to
long-term management plan covering the five years from 2014 to 2018, in February 2014. The plan has several
strategic objectives. First is to develop the best possible private brands for each targeted customer segment for
women in their 30s to 50s, the main customers for its mail-order business. Second is to implement merchandiseplanning for enabling all the sales channels to contribute to raising awareness of its private brands. Third is toenact structural reforms for switching to an SPA (specialty store retailer of private-label apparel) business model,
which Senshukai believes will facilitate the efficient and effective growth of private brands. Fourth is to establish
an omni-channel framework. This goal involves integrating e-commerce, catalogs, stores and all other sales anddistribution channels so that our customers can make purchases at any time and any location.
The JFR Group has a well-balanced nationwide network of department stores, including PARCO CO., LTD andStylingLife Holdings Inc.,, located in major metropolitan areas of Japan as well as a high-quality customer base.
Under a medium-term business plan that covers the three years from 2014 to 2016, the JFR Group is working on
becoming much more competitive and profitable as a multi-channel retailer. Other goals are to establish abusiness model for growth centered on its stores along with the regions where stores are located (urban market
dominance strategy) and to use omni-channel retailing.
The business climate for the retail industry in Japan is undergoing major changes. Most significantly, there isincreasingly heated competition among retailers along with growing competition with companies outside theretail sector. By operating department stores, the JFR Group has much expertise involving brands, sales andcustomer service, and store operations. In addition, this group has a balanced network of stores in Japan’s large
cities and a solid base of quality customers.
Senshukai and the JFR Group have expertise in different business domains and serve different customer
segments. The JFR Group uses stores to sell merchandise while Senshukai uses mainly catalogs and Internet. The
JFR Group targets a broad spectrum of age segments while Senshukai’s customers are mainly women in their 30s
to 50s and mothers. As a result, the operations of the two companies are mutually complementary. Therefore, we
concluded that a business alliance will enable both companies to increase their market shares and conductbusiness operations with greater efficiency. Discussions regarding an alliance started in October 2014. The twocompanies confirmed that there are good prospects for synergies, such as by jointly selling their private brandmerchandise to expand sales channels. To determine specific alliance activities and the use of funds procured
through the capital alliance, Senshukai and the JFR Group agreed to establish a committee to hold discussions.
The two companies also agreed that JFR will use the capital alliance to provide Senshukai with the funds
required for business alliance activities. These actions led to an agreement for a capital and business alliance that
includes the acquisition of at least 20% of Senshukai’s stock by JFR.

-9-SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

2. Details of the business alliance
Goals of the business alliance are as follows.
(1) Expand sales channels and reduce the cost of merchandise through joint marketing of the current private
brand merchandise of both companies(2) Conduct cross selling by utilizing each company’s resources and expertise with regard to certain
merchandise groups that do not fully meet customers’ needs(3) Develop and jointly market new private brand merchandise, utilizing Senshukai’s product development
capabilities and the JFR Group’s expertise in store development and operations and sales customer service(4) Expand e-commerce sales and earnings by utilizing Senshukai’s expertise in e-commerce operations andthe JFR Group’s customer base and powerful brands(5) Consider improving the operating efficiency and rebuilding the platform of the JFR Group’s direct
marketing business, by utilizing Senshukai’s expertise and order fulfillment system(6) Generate earnings in more ways by utilizing each group’s assets and expertise to the maximum extent(7) Establish a Business Alliance Promotion Committee to drive the above initiatives forward
3. Capital alliance
Senshukai will use the Third-party Allotment to sell 8,900,000 shares (17.06% of all voting rights) of its common
stock to JFR. In addition, JFR has purchased 2,915,000 shares (5.59% of all voting rights) of Senshukai common
stock from shareholders of Senshukai. Following these purchases, JFR holds 22.65% of Senshukai’s voting rights
and 22.62% of all Senshukai shares issued.
4. Profile of J.FRONT RETAILING(1) Name(2) Location(3) Representative(4) Business(5) Capital

J.FRONT RETAILING Co.,Ltd.
10-1, Ginza 6-chome, Chuo-ku, Tokyo
Ryoichi Yamamoto, PresidentManagement planning, administration and associated operations for subsidiaries
and group companies that operate department stores and other businesses
30,000 million yen

II. Issuance of new shares and disposal of treasury shares through a third-party allotment
1. Issuance of new shares(1) Type and number of shares to be issued:

Senshukai common stock 4,600,000 shares(2) Issue price:

846 yen per share(3) Total issue price:

3,891,600,000 yen(4) Amount credited to capital:

1,945,800,000 yen(5) Method of allotment:

Issuance of new shares through a third-party allotment(6) Allottee:

J.FRONT RETAILING Co.,Ltd.

(7) Payment date:

May 7, 2015

2. Disposal of treasury shares(1) Type and number of shares to be sold:

Senshukai common stock 4,300,000 shares(2) Disposal price:

846 yen per share(3) Total disposal price:

3,637,800,000 yen(4) Method of disposal:

Disposal of treasury shares through a third-party allotment(5) Purchaser:

J.FRONT RETAILING Co.,Ltd.

(6) Payment date:

May 7, 2015

- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for the First Quarter of Fiscal Year 2015

3. Purpose and reason for offering
As was explained in “I. Capital and business alliance 1. Reason for the capital and business alliance,” theThird-party Allotment is associated with the business alliance with JFR. The purpose is to build a framework forcooperation between Senshukai and the JFR Group in order to improve prospects for the success of the capitaland business alliance.
The Third-party Allotment will result in the dilution of Senshukai common stock. However, Senshukai believes
that the capital and business alliance with JFR and the improvement in its financial soundness due to theThird-party Allotment will lead to growth in the corporate value of the Senshukai Group as well as in shareholder
value.
4. Amount and use of funds to be raised(1) Amount of funds to be raised(i) Total payment amount
7,529,400,000 yen(ii) Estimated cost of issuance and disposal
244,000,000 yen(iii) Estimated net proceeds
7,285,400,000 yen
Note: 1. Estimated costs of issuance do not include consumption tax.
2. Estimated costs of issuance mainly include commercial registration fees, advisory fees and stock
exchange listing expenses.
(2) Specific use of funds to be raised
Senshukai plans to use the estimated net proceeds of 7,285 million yen for capital expenditures and otherinvestments associated with the business alliance with JFR. In the mail-order business, as initially planned,
Senshukai will use 3,000 million yen of the funds associated with this alliance for investments in systems
required for the omni-channel strategy in “Innovate for Smiles 2018” management plan. Another 3,000
million yen will be used for the logistics infrastructure, including shipping, warehousing and other systems,
needed to support growth in shipments as Senshukai and JFR Group sales increase. The remainder of the net
proceeds will be used for opening flagship stores in large cities (Tokyo, Osaka and others) for activities
involving new brands and for the joint development and procurement of new private brand merchandise. The
Business Alliance Promotion Committee, which the two companies plan to establish, will determine specificactions and these investments will be made at the proper times.
* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which has
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

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