Enriching homesof people all over the world
New Phase, New Growth.

NITORI HOLDINGS
Integrated Report 2022
2021.2.21 - 2022.2.20

Mission Statement & Vision

Contents & Editing Policy

Enriching homesof people all over the world

Company Information (As of February 20, 2022)

Vision 2032

3,000stores

Editing Policy

Special Feature

3

Net Sales ¥ trillion

We have issued the 2022 Integrated Report to aid
investors, shareholders, and other stakeholders’
understanding of our processes and potential forachieving a long-term, sustainable enhancement of
NITORI Holdings Co., Ltd.
Company Name
our corporate value. In planning and structuring thisAbout NITORI Group Akio Nitori, Representative Director & Chairperson (Chief Executive
Integrated Officer)
Report, we have focused on
Representative
Toshiyuki Shirai, Representative Director & President (Chief communicating
Operating Officer)“expansion of our long-termsustainablegrowth001-0907;
and contribution to environmental,
Sapporo Head Office: 1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo,
Hokkaidosocial,andeconomicsustainability,” while also
TEL: +81-11-330-6200
Addressreferring to the disclosure framework provided by the
Tokyo Headquarters: 3-6-20, Kamiya, Kita-ku, Tokyo 115-0043;
International Integrated Reporting Council (IIRC).
TEL: +81-3-6741-1235

03 1 Foundation of NITORI Group’s Value Creation
05 2 Global Business Development: Accelerating Store Openings

Establishment

Established December 1967

Incorporated

March 1972

Target Scope

07
Message from the¥811,581
Chairperson
Revenues
million(Consolidated)
09 Our Value Creation Journey
Ordinary
millionIncome11
Message from the¥141,847
President(Consolidated)
15 NITORI Group’s Today¥13,370
millionCapitalStock Our Mission
To Achieve
and Vision16

We set as many domestic and foreign NITORI Group
companies subject to consolidated ﬁnancial
statements as possible as the target of our reporting.
However, depending on the item, the reporting target
may differ.

Number of
NITORI Group’s Strengths
37,229 (including 18,245 average part-time employees)
Employees(Consolidated)
17 Business Model / Value Creation Model

Target Period

19

Product Development and Coordination

21 Manufacturing
NITORIGroup List
22

Quality

Curtain
Manufacturing Factory
23 Logistics

Import Agent Companies

HOME DECO CO., LTD

25

NITORI (China) Co., Ltd.

The
significanceof& this
reportNITORI(Taicang) Trading
Logistics
Co., LtdSales (Stores) NITORINITORI TRADING VIETNAM COMPANY LIMITEDNITORI TRADING (MALAYSIA)SDN.BHD.
WEB
NITORI TRADING THAILAND
CO., LTD.
NITORI INDIA
PRIVATE
LIMITED
Company
Information

SalesManufacturing(Stores) SHIMACHU
26Overseas
Companies
FURNITURE& O2O
27NITORIE-Commerce
VIETNAM EPE

Trading, Planning & Development,

A Wide Range of Business Fields
28Ba Ria-Vungand Logistics Functions

Corporate governance, internal controls,
compliance, etc.

Tau Branch

Logistics Companies

NITORI Group’s Sustainability
29Home Logistics Co., Ltd.
BookletHome Cargo Co., Ltd.
Integrated Report

Sustainability Policy

31

Materiality and Principal Activities

33

Nitori's ecology

36

Resource Circulation

37

Resource Circulation
with Customers
Manufacturing
Functions

39

Climate Change / Energy

41
42

Diversity

43

Occupational Health & Safety

44

IT Functions
Recruitment

45

Partnership with Suppliers

Nitori PublicCo., Ltd.
Sustainability
InformationWEB
IR Information
Strategies, financial results
information, etc.

Facility Management Insurance
Agent Business
Advertising and Publicity
Functions

Nitori Facility Co., Ltd.

Store Management Companies

Nitori Co., Ltd. Regarding
Disclaimer
・-HOME FURNISHING STORE
Forward-Looking-HOME FASHION STOREStatements-NITORI MALL

Facility Management
Functions

48

Overseas Sites / Own Factories

49

CSR Activities

51

Governance

52

Discussion with Female Directors

57

Directors and Executive Officers

59

Sustainability Data Book

Sales Functions

IT / Digital&Company
FinancialCompany Data
Nitori Digital Base CO., LTD.

63

Transition of Key Management Indicators

65

NITORI Group’s Financial Strategy

Carpet Company
and Rug Manufacturing
Company
Stock Information/ Company Information

01
01

Advertising
AgencyWEB
Initiatives for key issues

NITORI Holdings
Human Resources Development Co., Ltd.
[Holding Company]

69
SIAM NITORI CO., LTD.

February 21, 2021 to February 20, 2022
In this report, the ﬁscal year ended February 20,
2022, is referred to as ﬁscal 2021 or FY2021.
The Activity Report also includes some recent
content.

This-DECO-HOME
report contains plans, strategies and forecasts,
and-Online
forward-looking
statements regarding the
Shopping Business-Renovation Businessbusiness
performance of NITORI Holdings and-Corporate Sales Business, etc.
afﬁliatedcompanies.
These statements are not
SHIMACHU
CO., LTD.
-SHIMACHU
historicalfacts. These forward-looking statements-SHIMACHU HOME’S
are-NITORI
based onthe current assumptions and beliefs of
HOME’SNITORI Holdings in light of currently available
information. In addition, these statements containrisks and uncertainties related to economic trends,
ApparelSales Company
personal
consumption,market demand and supply,
N Plus Co., Ltd
taxation systems, and other systems. Therefore,
please note that the actual business performance of
NITORI Holdings and its group companies may differ
Overseas Sales Companies
the forecasts.
NITORIfrom
TAIWAN
CO., LTDNITORI (CHINA) HOLDINGS CO., LTD.
DECO HOME CHINA CO., LTD
NITORI (SHANGHAI) HOME FURNISHING CO., LTD
NITORI (SHANGHAI) HOME FURNISHING SALES CO., LTD
NITORI USA, INC.

0270

Special Feature 1 Foundation of NITORI Group’s Value Creation

NITORI Group’s IT and DXNITORI Group’s Human Resources

Accelerating Evolution to Achieve Our Mission and Vision

Creating an Organization with a Wealth of
Elites for Sustainable Growth

NITORI Group’s business model, encompassing everything from product planning and manufacturing to distribution and sales,

NITORI Group’s growth is supported by a wealth of elite specialists who can think comprehensively and create new value. The

is built on IT systems that have been developed based on our philosophy of doing everything in-house. We plan, develop,

pillar of human resources development is “job-rotation-based education” designed so that employees experience various

implement, operate, and manage systems in-house, while incorporating the latest technologies from external parties. In addition,

occupations in the Group’s extensive business areas every two to three years. This is an education system that forms theIT plays an important role in terms of offering a comfortable and convenient shopping experience to our customers byfoundation of human resources development, designed to provide each employee with a wealth of knowledge and extensive

developing, introducing, and improving the functions of NITORI-net and the app. In line with the Group’s growth strategy,

experience. At the same time, in order to encourage the growth of each employee toward the fulﬁllment of his or her vision, we

responding to the ongoing development of operations in the countries and regions where we have a presence and thehave introduced a talent management system to link personnel data and are working to design transfers and employee

expansion of our business areas, we are building systems and mechanisms linked to our supply chain. We have been

education tailored to each employee’s career aspirations. This approach has produced a large number of NITORI-stylestrengthening the development and education of IT human resources. To further accelerate IT and digital transformation (DX),specialists who can apply knowledge in a broad range of ﬁelds and combine expertise in several subjects to generate

we established Nitori Digital Base in April 2022. We will lead global and large-scale projects with unprecedented innovative

innovation. We continue to aim for sustainable growth by taking advantage of the potential presented by being an organization

technology to support business model innovation.

with a wealth of elites.
Job-rotation-based education

4C Principle

Advertising
Businessplanning

IT

Store
operations

E-commerce

Logistics

Tradingcompanies

Education
Manufacturers

Nitori Digital Base’s officeIT human resources support NITORI GroupVoice

A work ethic that takes root in
NITORI Group

Focus on creating an organization in whiche a c h a n d ev e r y e m p l oy e e c a n w o r kvigorously and fulﬁll an active role

Voice
IT evolution and promotion of DX are indispensable for accelerating NITORINITORI Group has been emphasizing human resources development since its

Group’s store openings and expanding its business areas. Our task is tofoundation, convinced that “individual growth leads to corporate growth.” Wedevelop new systems, services, and channels, while operating and managing

need to grow dramatically to achieve our vision. The key to achieving our visionsystems safely and securely, to improve internal operational efﬁciency and tois how we can produce specialists by means of the 4Cs. Committed to creating

provide a wide-ranging and convenient shopping experience for ouran organization that values and nurtures people who continue to take on

customers. We will continue to actively create value as the foundation of thechallenges, we encourage NITORI Group employees worldwide to make steadyGroup’s business model.

progress toward realizing the company’s mission and their own vision.

Yoshihisa Sato03

Unique job-rotation system in which
employees are transferred to otherdepartments every couple of years

Senior Executive Officer
Chief Information Officer (CIO)

Mitsuru Ohki

Managing Executive Officer
General Manager, Organization Development
Office and Chief Information Security Officer (CISO)

04

Special Feature 2 Global Business Development: Accelerating Store Openings
NITORI Group is focused on opening stores in Eastern Asia, the U.S., Malaysia, and Singapore,and is promoting e-commerce in each of these countries and regions, as well as cross-border
e-commerce and wholesale business in countries and regions where the Group has no stores.
Having established the Global Business Development Office in January 2020 to enable ourheadquarters to take the lead in providing support to build foundations for overseas business,
we are further accelerating the speed of new store openings overseas.
Initiatives for global business development
ThemesOverview of initiatives

Support for overseas businessby the Japan headquarters

Supporting issues related to developing business in all countries and regions outside Japan. Encompasses humanresources development, development of educational tools, store creation, omni-channel development, store work
standardization, product supply, and inventory management, etc.

Clariﬁcation of know-how andtransfer of explicit
documentation

Providing systems and manuals in local languages for using the know-how employed in Japan throughout every aspectof overseas operations, including the creation of sales floors that offer clear product suggestions, development ofstandards for product displays and placement of promotional materials, and faster and more efﬁcient human resources
development.

Product proposals based on
lifestyle studies in new
countries and regions

Using our understanding of lifestyles in each country and region to promote NITORI products that resolve frustrations
and inconveniences of local people in a clear way using sales floors, and POP and promotional materials in local
languages, as an alternative to conducting market research on best-selling lines.

Global omni-channel promotion(platform-building, global
standardization)

Evolving from e-commerce deployed in each country and region to the development of a shared global platform.
Pursuing cost reduction measures and faster expansion to respond promptly to rapid changes in customers’ “purchasebehavior.”

Initiatives in fiscal 2021 in countries and regions where NITORI Group has stores
Country / region

Overview of initiatives

NITORI (CHINA) HOLDINGS CO.,LTD

Opened a store on TMall, an e-commerce site. Expansion of sales channels led to increases in the number of customers
and the e-commerce conversion rate. Implemented standardization measures such as unifying the logo and catch copy
to enhance NITORI’s brand power. Opened a custom furniture sales floor and a showroom for corporate customers inShanghai Xujiahui Store. 22 new store openings are planned for ﬁscal 2022 ending March 31, 2023.

NITORI TAIWAN CO., LTD

Opened N Sleep Shop, a specialty shop for bedding products, in ﬁscal 2021, to expand the customer base and number ofcustomers by offering a new product lineup. Sales have been brisk. Opened a store on an external e-commerce site tostrengthen the e-commerce business. Began airing TV commercials for N Cool, N Warm and other seasonal bedding
products, that are basically the same as those in Japan. 12 new store openings are planned for ﬁscal 2022 ending March
31, 2023.

NITORI USA, INC.

Opened 11 pop-up stores to expand sales channels. Use of Amazon and Walmart Marketplace as well as our own
e-commerce site contributed to increased sales. Began changing store signage to “NITORI” as in other countries andregions to improve brand recognition. 1 new store opening is planned for ﬁscal 2022 ending March 31, 2023.

Voice

Masanori Takeda

Director
General Manager of Global
Merchandising Division
General Manager of Global Sales
Promotion Office
In charge of Overseas Sales Business

05

NITORI Group’s overseas operations took a major step forward in ﬁscal 2021, including theresumption of accelerated store openings in Eastern Asia and the opening of our ﬁrst store in
Southeast Asia. Homes and lifestyles vary around the world. In order to supply products andservices that help to resolve customers’ discontent,dissatisfuctions and inconveniences, we
intend to create systems that enable us to open stores anywhere in the world, making use of theknow-how and strengths we cultivated in Japan. Moreover, we will use online sales channels incountries and regions where we do not have physical stores to enter the market faster and in atimely manner.

Opening of First Stores in
Malaysia and Singapore and New Initiatives

TOPIC 1Opened the first store in Malaysia
Our ﬁrst store in the Southeast Asian market

On January 20, 2022, we opened our ﬁrst store in Malaysia,
which was also our ﬁrst store in Southeast Asia, in the Mitsui
Shopping Park LaLaport BUKIT BINTANG CITY CENTRE,
Kuala Lumpur. The store area is approximately 800 tsubo(2,600 square meters). The products are almost as wideranging as in Japan, with a large selection of N Cool products
suitable for the warm climate. The store includes an N Sleep
Shop specialized in bedding products. We also launched ourown e-commerce site. In order to gain the support of manycustomers in Malaysia, we plan to open 20 stores over the
next ﬁve years, with six new store openings planned for ﬁscal
2022 ending March 31, 2023.

TOPIC 2Opened the first store in Singapore

Enhance brand power with a presence in the country with the strongest
economy in ASEAN

On March 31, 2022, we opened our ﬁrst Singapore store on
Level 4 of COURTS Nojima The Heeren on Orchard Road.
The store has a floor space of 760 tsubo (2,500 square
meters) and handles almost the same products as in
Malaysia. To meet unique storage needs in Singapore, thestore has a sales floor for custom-made storage furniture,
which is not available in Japan. We also launched our own
e-commerce site. We plan to open 10 stores over the next
ﬁve years, with two new store openings planned for ﬁscal
2022 ending March 31, 2023.

TOPIC 3

Launched e-commerce in South Korea
Tie-up with Coupang, the largest e-commerce company in South Korea

On January 12, 2022, sales of NITORI products began on
Coupang’s e-commerce site. By supplying goods to Coupang,
we entered the Korean market initially through e-commerce,
prioritizing faster market entry in a timely manner. More than
120 products, including bedding, cushions, slippers, andkitchen mats, are available and plans call for the launch of the
N Cool series tailored to Korean bed sizes in the summer of2022. We will promote market analysis and acquisition of
know-how in preparation for business expansion in South
Korea.

06

About NITORI Group -Message from the Chairperson

Continuing to take on the challengeof achieving our mission, rejecting
the status quo and engaging ininnovation, to provide enrichment
to our customers
Akio Nitori

Representative Director & Chairperson(Chief Executive Officer)

Respond to change and continue sustainable growth byleveraging a challenging business environment
Though the number of COVID-19 cases goes up anddown with the passage of time, it cannot be said that the
pandemic has been contained. Furthermore, inflation has
become apparent worldwide due to soaring crude oil andraw material prices, supply chain disruptions, and labor
shortages, and ﬁnancial market and exchange rates are
fluctuating markedly. The situation in Ukraine is anotherconcern. Thus, the business environment in which we
operate remains uncertain and challenging. We have been
affected by this, to no small extent, but taking advantage ofour business model that integrates manufacturing, logistics,
IT, and retail, we are devising ways to reduce various costsin the supply chain in an effort to continue to “offer theunexpected” to our customers. NITORI Group faced
several crises over the years. Each time, however, weovercame adversity by seizing it as an opportunity. The
driving force behind that is our aspiration to accomplish our
mission, “To enrich homes of people all over the world.”
Going forward, NITORI Group will continue to grow by

07

flexibly responding to the changing times, rejecting thestatus quo and engaging in innovation.
For chain stores, the ever-increasing number of customers
and the ever-expanding number of stores are the metrics ofsocial contribution. In order to attract more customers, wehave continued to increase the number of stores whiledeveloping new products, providing new services, andimplementing various measures. It took 29 years from ourfounding for the number of stores to reach 30. In the next
seven years, we achieved 100 stores. Subsequently, weshortened the time taken to open the next 100 stores to six
years, to three years, and then to two years. We did not
slacken the pace of new store openings in ﬁscal 2021, witha net increase of 79 stores in one year. We have become
able to rapidly increase the number of stores because we
now have a full complement of specialists to support eachstage of our manufacturing-logistics-IT-retail businessmodel. I think this is the result of our focus on employee
development and the creation of a framework for fostering

Message to Stakeholders
human resources. I believe it indicates that humanresources development is the source of our sustainablegrowth potential, and moreover, that the growth of
employees is linked to enriching the homes of an evergreater number of customers. NITORI Group plans active
store openings in ﬁscal 2022. Plans call for a net increaseof 143 stores, 100 in Japan and 43 overseas. This year, weplan to resume sending employees to observation study
tour in the U.S. for the ﬁrst time in three years. We intend to
make ﬁscal 2022 a year of proactive investment in humanresources development (see p.4 NITORI Group’s Human
Resources Development) and improvement of operational
efﬁciency through IT and digital transformation (DX) (seep.3 NITORI Group’s IT and DX). For the second 30-year
plan, Vision 2032, targeting 3,000 stores and 3 trillion yen in
net sales, 10 years remain. Achieving this grand vision will
not be an easy task, but all employees will continue working
as one to achieve it.

Fiscal 2021 marked 35 years of consecutive sales andproﬁt growth for NITORI Group. In addition, we haveachieved 32 consecutive years of increased sales and proﬁtsince our listing and are ranked ﬁrst in the world in terms ofthe number of consecutive years of increased sales andproﬁt among listed companies. This is due to the support of
all our stakeholders, including the customers who havepurchased our products, our shareholders, ﬁnancial
institutions, local residents who have cooperated with us
concerning the opening and operation of our stores, oursuppliers and many other business partners at every stage
in the supply chain, and NITORI Group employees who are
doing their utmost to achieve our mission and vision. I
would like to express my wholehearted gratitude to all ofyou.
We will strive to continue enriching homes for many more
people. I am grateful to all of our stakeholders for theircontinued support in our endeavors.

08

About NITORI Group -Our Value Creation Journey
NITORI Group’s philosophy of doing everything in-house, making it possible tooffer the unexpected.
We control everything, from product planning to manufacturing, logistics,
and sales.

Mission Statement

Enriching homes of people all over the world
The needs of the times and our value offered“To bring America’s enriched
lifestyles to Japan.”—this was our starting point.

Widely accepted “One-room
coordinated interior design.”

Achieving lower prices for
expensive items with productdevelopment fromthe customer’s perspective.

We stopped displaying productsby type, which is the conventional
method, and set up room displays
representing life scenes for eachroom of the house, such as theliving/dining room, bedroom, andkid’s room. Before any othercompany, we created sales floors
where customers could
experience coordinated living
spaces.

The observation tour of America
in 1972, had a major influence on
NITORI. The stores there
supported a luxurious everyday
lifestyle, offering
customer-oriented products atoverwhelmingly low prices thatwere in lineups unified in quality,
color, and style—this was thestarting point of NITORI Group.

Implementing price cuts evenduring recessions with
an affordability that has value.

Feather comforters once costmore than 100,000 yen. By
reevaluating raw materials,
NITORI Group was able to cut theprice to under 10,000 yen whilestill maintaining its quality. In thesame way, we have contributed tolower prices for furniture, such as
sofas and beds, as well as
randsels (school bags).

NITORI Furniture Store established1986“Offering
the Unexpected”“To bring the comfortable andenriched living of
the U.S. to Japan”

2007

Achieved 100 stores and¥100 billion in net sales

1994

Opened KaohsiungDream Mall Store1973

Price Cut Declaration

Price cuts on 1,000 items
following the global
financial crisis

Established NITORI-net

Launched the online
sales business

Established factories overseas inorder to achieve low prices for
products with Japanese quality

Direct purchase frommanufacturers started

2008

2004

Began operating
an overseas factory

2009

Number of storesNote: Numeric figures are from the financial statement announcement.

1

09

3

7

Opened Printemps Ginza Storeas the first store inside
a department store

2017

2013

The new factory in Ba Ria-Vung Tau,
Vietnam, began operation

Opened the first store
in the U.S.

2021

Aki-Home
Globalization and expansion ofbusiness areas

18

21

24

29

37

50

0
0

0.4
0

2.9
0.1

9.0
0.4

13.2
0.9

17.5
1.2

19.3
1.5

25.6
1.8

34.8
2.0

48.9
3.5

1967

1973

1979

1986

1990

1992

1994

1996

1998

2000

73

63.2
3.8
2001

73

82

78.7

88.2

7.1

8.9

2002

2003

100

108.7
13.0

2004

116

130

145

189.1
129.4
15.2

2005

162

217.2

373

19.0

2006

2007

244.0

286.1
47.4

331
300

314.2
53.5

268

331.0
59.1

387.6

471

Global Business
Development:
Accelerating Store
Openings
➡ p.5

417.2

722

611

716.9

801

811.5

576

642.2
608.1

138.4

141.8

572.0

512.9

109.5
103.0

458.1

348.7

Opened the first store
in Malaysia
Opened the first store
in Singapore
Nitori Digital Baseestablished

523

Management integration
with SHIMACHU CO., LTD.

244

Special Feature 2

94.8
87.5

75.0

62.1

63.4

2013

2014

67.9

33.9

156.7
23.1

188

217

Foundation of
NITORI Group’s
Value Creation
➡ p.3

2022

2015

Achieved 200 stores and¥200 billion in net sales

Achievement of total coordination

Special Feature 1

Globalization and expansion of business areas

Opened Wuhan Star City Store
Launched NITORI app service

Opened large stores which sold productsthat make daily life more enjoyable andconvenient

15

NITORI Group is making efforts
to balance economic andenvironmental value by pursuingmore efficient manufacturing andlogistics with methods such as
mattress compression technology
which leads to smaller package
sizes and better container loading
efficiency.

2014

Ordinary income (billions of yen)

We have rapidly expanded our lineupof N Warm products (launched in2011), which use moisture-absorbing,heat-generating materials, and N
Cool products (launched in 2012),
which use materials that are cool to
the touch, while also enhancing theseproducts’ functions. The products arevery well regarded by our customers.

420

Break through from being justa furniture store

Net sales (billions of yen)Pursuing higher functionality
in daily essentials extending totheir materials.

Domestic nationwide development/Overseas expansion

Adding cost competitivenessthat is one step ahead

Founding spirit

Aspirations move tothe global stage

Coordination

2003

Started direct import of overseas
products

Balancing economic andenvironmental value with more
efficient manufacturing
and logistics.

In 2008, when oil prices skyrocketed,many companies resorted to raising theprices of their products, but that is when
NITORI made its Price Cut Declaration. It
was our desire to give back to ourcustomers when the economy was
experiencing a recession. More than
5,000 items were cut in price by 20% on
average by 2012, garnering great support
from our customers.

Quality andFunctionality

Affordability

Establishment of a new business model that integrates manufacturing, distribution, IT, and retail

1967

Present-day onward~●Sourcing that expands across the globe to achieve low prices●Achieving high quality by working closely with the suppliers, providing directions and management on the manufacturing
process at overseas plants.
●Conducting trading operations in-house. Achieving cost reductions by creating our own logistics network fromthe import of products to the delivery to our customers.

26.5

2008

2009

2010

2011

2012

2015

2016

2017

2018

2019

2020

2021

2022(FY)10

About NITORI Group -Message from the President

Promoting acceleration of
global business development
and expansion of businessareas to achieve Vision 2032
Toshiyuki Shirai

Representative Director & President(Chief Operating Officer)

Summary of fiscal 2021 ended
February 20, 2022
NITORI Group achieved sales and profit
growth for the 35th consecutive year andfor the 32nd consecutive year since listing
Economic conditions remained unpredictable in ﬁscal
2021, as challenging circumstances persisted amid the
COVID-19 pandemic. In the furniture and interior homefurnishing industry, the business environment remained
challenging due to intensifying sales competition acrossindustries and business formats, soaring labor costs
caused by labor shortages, container shortages, risinglogistics costs resulting from soaring ocean freight rates,etc. NITORI Group’s operating results were as follows: net
sales were 811.5 billion yen, a 13.2% increase year on
year, ordinary income was 141.8 billion yen, a 2.5%
increase year on year, and net income attributable toowners of parent was 96.7 billion yen, a 5.0% increase
year on year. We achieved sales and proﬁt growth for the
35th consecutive year and for the 32nd consecutive year
11

since our listing and ranked top in the world for the number ofconsecutive years of sales and proﬁt growth as a listed company.
This would not have been possible without our stakeholders, notleast the customers who have purchased our products. I wish to
express my heartfelt appreciation to all of you.

Net sales/Ordinary income
Net sales

Ordinary income(billions of yen)

811.5

800

716.9 138.4
600

642.2

608.1

572.0

94.8

103.0

141.8

150

120

109.5

90

400
60
200

0

30

2018

2019

2020

2021

2022

0
(FY)

Strategy to Achieve Vision 2032
Direction of growth strategies andapproach to corporate growth
At NITORI Group, every employee shares the mission ofenriching homes of people all over the world, which is at
the heart of everything they do. Aligned with our basic
policies of offering products with stable quality ataffordable prices and of proposing the pleasure of total
coordination of living spaces to more customers aroundthe world, the guiding principle of our corporate activities is
to do our utmost to achieve our long-term vision of 3,000
stores and 3 trillion yen in net sales by 2032 by mobilizing
the Group’s strengths.
To achieve NITORI Group’s grand mission and vision, we
have formulated and are implementing ﬁve medium- tolong-term management strategies.
For the ﬁrst strategy, “Evolution toward comprehensive
lifestyle suggestions,” in order to respond to changes inthe business environment and to consumers’ changing
demographic proﬁle, behavior, and needs, we will pursue
expansion and integration of business areas, including
through development of new lifestyle-related categories
and services, and evolve into a company that makes
comprehensive lifestyle suggestions, also covering home
improvement and apparel. By building ongoing
relationships with individual customers so that they
become repeat customers of NITORI Group stores ande-commerce, we hope to increase the number ofcustomers. As interim targets, we have set KPIs for ﬁscal
2025, which are over 200 million purchasing customers,
25 million app members, and 150 billion yen in
e-commerce sales. Regarding the second strategy, “Taking
up a challenge to realize a global chain store,” we intend toopen stores in more regions around the world in an effort
to enrich the homes of an ever-greater number ofcustomers. Our goal is to achieve 1,400 stores across theglobe by ﬁscal 2025. We also intend to expand
geographical coverage of cross-border e-commerce,
which we launched to enable customers in regions where
there are no NITORI Group stores to purchase our
products (see p.5: Global Business Development:
Accelerating Store Openings). For the third strategy,“Business foundation reform through supply chain

management, IT, and organizational strategies,” we will
invest a total of 350 billion yen or so until 2025 to establish
our own distribution centers of our own in Japan andpromote strategic relocation to enhance operational
efﬁciency. As for the fourth strategy, “Promotion of M&A
and alliances to expand business ﬁelds,” we will seek
strategic alliances with a view to strengthening both ourbusiness and functions, including M&A, in order to evolve
into a company that makes comprehensive lifestylesuggestions. Regarding the ﬁfth strategy, “Sustainability
management to both resolve social issues and achieve our
mission,” we aim for and pursue a better future for ourcustomers and all our stakeholders as well as for theenvironment, and society.

Table 1

Medium- to long-term management strategies
1 Evolution toward comprehensive lifestylesuggestions
2 Taking up a challenge to realize a global chainstore
3 Business foundation reform through supply chain
management, IT, and organizational strategies
4 Promotion of M&A and alliances to expand
business ﬁelds
5 Sustainability management to both resolve social
issues and achieve our mission

12About NITORI Group -Message from the President
Key measures for fiscal 2022 ending March 31, 2023
Based on these medium- to long-term management strategies for achieving our medium- to long-term management plan,
we set ﬁve key measures for ﬁscal 2022, as indicated below.

Table 2

Key measures for fiscal 2022
1 NITORI Business (domestic)

Pursue low prices and increase thenumber of customers

2 NITORI Business (overseas)

Build the foundation and accelerate growthto achieve Vision 2032
Establish a global supply chain and IT
systems, accelerate store openings incountries and regions where NITORIGroup has no stores yet.

3

SHIMACHU BusinessRealize a broader product range (homeimprovement business) than existing
businesses and maximize synergies

4 Establishment of business infrastructure

Establish the foundation that enables
expansion of geographical coverage andbusiness areas

5 SDGsTake steps toward achieving our mission
while resolving the issues of the world,
aiming for a better future

Specific initiatives●Proactive store openings in Japan●Improving the ratio of operating income to net sales of the Corporate
Sales and Interior Renovation Businesses and strengthening productdevelopment●Expansion of the offering of online-exclusive products, addition of newfeatures●Accelerating store openings overseas (34 stores in Eastern Asia, 1store in the U.S., 6 stores in Malaysia, 2 stores in Singapore)●Improving proﬁtability of the Eastern Asia business●Expanding geographical coverage of overseas e-commerce to cover
countries and regions where NITORI Group has no stores yet●Rebuilding the range of home improvement products that earn the
support of local customers●Optimizing the product mix●Accelerating development of private-brand products●Promoting cost reduction by consolidating suppliers, shifting production
areas, purchasing raw materials, etc. in response to rising costs●Establishing systems and mechanisms in cooperation with the supply
chain for store openings in countries and regions where NITORI Group
has no stores yet and for expanding business areas●Further utilizing IT and promoting DX to improve operational efﬁciency●Responding to climate change●Reducing waste and expanding recycling●Sustainable raw material procurement, building a supply chain free ofhuman rights violations●Promoting diversity●Penetrating sustainability activities internally and externally

For the ﬁrst measure, “NITORI Business (domestic):
Pursue low prices and increase the number of customers,”
to gain further support as destination stores for customers
in Japan, we will scale the product mix and efﬁciently
renovate NITORI and NITORI EXPRESS stores and weplan to expand the opening of small Deco Home stores of
100 tsubo (330 square meters) in size. In addition tostrengthening the development of products that resolve
customers’ frustrations and inconveniences, we will also
expand Deco Home original products. For the third
measure, “SHIMACHU Business: Realize a broader
product range (home improvement business) than existing
businesses and maximize synergies,” in order to maximize
13

synergies with SHIMACHU, with which NITORI Group
integrated its management last year, in addition torebuilding a product range that earns the support of local
customers and development of SHIMACHU private-brandproducts, we will reform SHIMACHU’s structures andsystems, including the organizational structure and theeducation system. For the fourth measure, “Establishmentof business infrastructure: Establish the foundation thatenables expansion of geographical coverage and businessareas,” we will work to establish a supply chain, IT,
collaboration among organizations, and backcastingmechanisms and systems for the achievement of ourvision.

NITORI Group’s Sustainability
NITORI Group positions sustainability as a key
management issue and promotes efforts to resolve
environmental and social issues that are required of acompany. Through our unique business model that
integrates manufacturing, logistics, IT and retail, we will
strive to promote the business that achieves both
comfortable lifestyles for our customers and the resolutionof environmental and social issues, with the aim ofrealizing a sustainable society. We are implementing
initiatives based on the seven key sustainability issues(materiality) identiﬁed in ﬁscal 2021 (see p.31 Materiality
and Principal Activities).
We promoted initiatives geared to a circular economy,such as an experimental project to collect curtains anddown comforters at some stores for recycling and productdevelopment with an eye to recycling from the designphase onward. In addressing climate change, we haveexpressed our endorsement of the TCFD
recommendations and implemented information disclosure
based on them, including greenhouse gas reduction
targets. We have set greenhouse gas emission reduction
targets for ﬁscal 2030 and ﬁscal 2050. As well as striving
to reduce greenhouse gas emissions, we will work tocontribute to CO2 reduction in our supply chain throughthe promotion of green logistics, such as joint
transportation and modal shift. All of our employees inJapan and overseas—not only those in management orworking at headquarters—are playing their part to enable
the Group to work as one to achieve sustainable growth
and the kind of sustainable management that suits NITORIGroup.

Message to Stakeholders
By steadily resolving the issues, capitalizing on NITORIGroup’s unique business model that integrates
manufacturing, logistics, IT, and retail, we will progress
toward the achievement of Vision 2032 and our mission.
NITORI Group will continue to meet the expectations ofcustomers, shareholders and investors, employees, and allother stakeholders, and we look forward to your continued
support.

14About NITORI Group -NITORI Group’s Today

About NITORI Group -To Achieve Our Mission and Vision

NITORI Group has continued to provide products tailored to customer needs, based on its concept, which has remained
consistent since its founding – to bring the comfortable and enriched living of the U.S. to Japan. NITORI Group of “today” is a
midway point on its journey into “tomorrow,” as it looks to achieve its vision.

To achieve our mission “Enriching homes of people all over the world,” NITORI Group formulated the second 30-year planin 2002 with a vision of 3,000 stores and 3 trillion yen in net sales by 2032. We have formulated a ﬁve-year plan and mediumterm management strategies to achieve the vision.

Number of app
members

Number of customers

Net sales¥ 811.5 billion

Approx.

Vision 2025

1,400stores

Approx.

146 million*Number of customers who have purchased our products

13.14 million

Vision 2032

Over 200 million purchasing
customers

3,000stores

Medium- to long-term
management
strategies¥3 trillion in net sales

Number of stores

801stores

708storesJapan

90stores 2stores
Eastern Asia

Current growth base

U.S.

1storeFY2021

FY2025Five-year plan

Malaysia

FY2032Medium- to long-term
management strategies

1. Expand business areas andgeographical coverage

Number of employeesof the Group

Number of containers
handled annually

Number ofannual deliveries

2.75 million 162*Highest in Japan

thousandTEU

52,789*Number of full and part-time employees (calculated byconverting standard 8-hour workday as 1) is 37,229(including 18,245 average part-time employees)*Numeric figures are from fiscal 2022

Net sales(billions of yen)
1,000.0

750.0

642.2

963.6
716.9

(billions of yen)
120.0

506.8
450.0

354.3

411.7 425.8

300.0

250.0

15

(billions of yen)
600.0

811.5

500.0

0

Net income attributable toowners of parent

Gross profit

0

90.0

96.7

104.0

71.3
60.0

2020/2 2021/2 2022/2 2023/3(Forecast)0

2. Customer-centric management:
Product development and business formats●Development of products meeting new needs
based on the voice of the customer●Acceleration of coordination strategy●Development of private-brand (PB) home
improvement products●Resolution of social issues by providing
sustainable products●Establishment of sales channels that respondto changes in consumer behavior, such as
remote customer service and live commerce

3. Global supply chain
management strategy

1. Evolution toward comprehensive
lifestyle suggestions
2. Taking up a challenge to realize
a global chain store
3. Business foundation reform
through supply chain management,
IT, and organizational strategies

4. Promotion of M&A and alliances toexpand business fields

Enriching homesof people all over
the world

Aiming to be acompany that makes
comprehensive
lifestyle suggestions

5. Sustainability management toboth resolve social issues andachieve our mission●Supply chain management reform to achieve¥3 trillion in global sales●Investment in domestic distribution:
Over ¥200 billion in five years

30.0

150.0

2020/2 2021/2 2022/2 2023/3(Forecast)

92.1●Dominance in the furniture/home fashion area
in Japan by NITORI business in Japan;
expansion of overseas business●Covering a wider range of customer lifestyles;
expansion of customer base through home
improvement business●Establishment of a common Group platform for
e-commerce●KPI: Over 200 million purchasing customers
1,400 stores across the globe
25 million app members¥150 billion in e-commerce sales

2020/2 2021/2 2022/2 2023/3(Forecast)

16

NITORI Group’s Strengths -Business Model / Value Creation Model

A manufacturing-logistics-IT-retail business:
NITORI Group’s unique business model provides value
by “offering the unexpected”
Leveraging our solid foundation of human resources and global network of partner companies, we have established all
operational functions inside NITORI Group to create a manufacturing-logistics-IT-retail business. We are endeavoring toevolve our customer-oriented business model in order to continue creating value by “offering the unexpected.”

3,000stores

1,400storesOver 200 million
purchasing customers

Vision2025

MissionStatement¥3 trillion in net sales

Vision2032

Enriching homesof people all over
the world

Aiming to be a company thatsuggests enriched
lifestyles to people around the world

Product Development/ Coordination

Product
Planning

Raw Material
Procurement

We control everything in an integrated
manner, from product planning to manufacturing,logistics, and sales.

Environmental value

SystemDevelopment

Social value

Manufacturing

Creation of Shared Value
Offering
the Unexpected

Sales (Stores)

This is our system for creating products “offering the unexpected.”
1. Affordability

2.Quality

Quality Control

Economic value

3.Coordination

NITORI Group’s Sustainability
Sales(E-commerce)

Taking steps toward achieving
our mission while resolving the issues of the world,
aiming for a better future.

Trade
Logistics

Foundation of
IT / DX Foundation

17

Value Creation

p.3

Management System / Corporate Governance

p.29

Foundation of Human Resources

p.4

p.51

18

NITORI Group’s Strengths -Product Development and Coordination

Focusing on productdevelopment to resolve
customers’
discontents,dissatisfactions andinconveniences

Product
Development

NITORI’s coordination
continues to evolve

Developing new products based on thorough market
research to offer an extended product lineup

Coordination

Accelerating global business development to provide
enriched lifestyles to people around the world bysuggesting coordination

NITORI Group has been vigorously promoting development and

NITORI Group offers a variety of suggestions so that customers aroundextending the range of private-brand (PB) products. The home appliances

the world feel familiar with coordination and will be inspired to shop at

we began rolling out in 2018 have been well received by our customers,

Wi-Fi
ready

and resolving their frustrations and inconveniences. Suggestions to link

and in response to their requests, we now offer more products for families
in addition to those for single-person households. The lineup has been
extended, including the launch of Wi-Fi air conditioners in 2020. We arealso accelerating the shift to PB home improvement products for

NITORI. Suggestions to improve lifestyles by meeting customers’ needs

Cleaning by
freezing andthawing

interior colors and patterns to make a room more enjoyable andcomfortable. If customers feel that their rooms are naturally arranged in a
beautiful way as a result of shopping, this is the realization of the joy of

SHIMACHU customers. In November 2021, we launched PB toilet paper

coordination and the ﬁrst step toward enriched lifestyles. We will continue

and boxed tissues. We will continue to emphasize the development of PB

to expand coordination suggestions both at physical stores and by

products to strengthen product appeal and contribute to the comfortablee-commerce to help customers realize their ideal lifestyles.

lifestyles of local customers.

For further enhancement
Promote product development
targeting coexistence with theenvironment and society

19

For further enhancement
Fully utilizing the business model that integrates manufacturing, logistics, IT, andretail, we are also emphasizing the development of products with functions thatlead to reduction of environmental impacts, such as reduced power
consumption, as well as “Nitori’s ecology” products.
p.33

Promoting coordination suggestions
through in-store displays thatconvey the concept:
Expand room-type presentations
corresponding to lifestyle scenes

A room-type presentation comprises furniture, curtains, rugs, andother large interior products, as well as small interior items andlighting, in a way that simulates actual lifestyle scene. We offer
proposals that coordinate color tones and textures.

20

NITORI Group’s Strengths -Manufacturing

NITORI Group’s Strengths -Quality

Deploying verticallyintegrated merchandising on
a worldwide scale

Product safety and quality
control with our sights set
on the world

Manufacturing

NITORI Group’s own overseas factories contribute to stablesupply of products in any circumstances

Quality Control

Strengthening the system to supply safer and more secure
products with appropriate quality

NITORI Group pursues vertically integrated merchandising covering all

Having reflected on the recall of diatomite products in 2020, we expanded the restricted

processes from raw material procurement to the point where products

substances list to include 108 substances and enforced bans on use, or restrictions on thereach customers for use. Among the Group’s own manufacturing sites

amounts, of the relevant substances in products. In February 2021, a Planning & Design

overseas, two factories in Vietnam (Hanoi and Ba Ria-Vung Tau) and a

Evaluation Meeting was established to jointly check the 3 items of “conﬁrmation of raw

factory in Thailand underpin a stable supply of products and are among

material safety,” “compliance with regulations and standards,” and “monitoring and guidance

the Group’s strengths. The Hanoi Factory mainly produces furniture suchof factory management systems" with the departments involved in product development. We

as cupboards and chests, beds, and sofas, while the Ba Ria-Vung Tau

have introduced a system whereby products featuring new materials or new functions must

Factory produces curtains, N Cool and other bedding products in additionpass through a conﬁrmation process overseen by this evaluation meeting before

to dining table sets. In July 2021, a curtain factory with a floor area ofcommercialization. This system leads to the identiﬁcation of substances restricted by laws

22,000 tsubo (73,000 square meters) started full-scale operations. The

and regulations, prevention of the use and mixing of unregulated hazardous substances,

factory produces 5,000 sets of curtains per day. Those curtains have been

examination and veriﬁcation of inspection and management processes required for new

sold at stores since the end of September 2021.

materials, and accumulation of know-how. We have put in place a double-checking system
whereby Planning & Design Evaluation Meetings function in parallel with the Development
Technology Evaluation Meetings, which conﬁrm the safety of use of new products.

For further enhancement
Expanding factories in Vietnam andThailand:Strengthen the production systemand enhance productivity inreadiness for increasing the numberof stores in Japan and overseas

21

In 2022, we acquired land for a third factory in the vicinity of the Hanoi
Factory in Vietnam. The new factory will respond to the need for increased
production of furniture. Construction of a new building with a total floorarea of 1,960 tsubo (6,500 square meters) as the second factory of SIAMNITORI in Thailand is scheduled for completion in June 2022. Production
and development of carpets and rugs will be further strengthened.

For further enhancement
Digital transformation (DX) of quality
control:
Introduce a quality control platformsystem to seamlessly manage quality
operations by country/region

Plans call for the introduction of centralized management of reports
and data from product development through to supply in a databaseby 2025. We will promote the localization of Technology Evaluation
Meetings and quality audits, which have been led by Japanese
Headquarters aiming to establish a global quality control system
and localization of product evaluation.

22

NITORI Group’s Strengths -Logistics

A logistics network to optimize
transportation efficiency

Establishment of a logistics network:
Managing container transportation from ports todistribution centers in-house

Logistics

Logistics

Rebuilding domestic distribution centers:
Total optimization based on optimal location andconcentration of functions

Home Cargo Co., Ltd. was established in February 2021 to realize integrated

NITORI Group is rebuilding its domestic distribution centers not only to expand

logistics services from container transportation to last mile delivery by taking

receiving and shipping functions in response to the increase in the volume ofadvantage of NITORI Group’s economies of scale. The objective is to play agoods, resulting from accelerated store openings and increased demand forrole in domestic drayage transportation, transporting containers arriving at

e-commerce, but also to curb CO2 emissions and reduce costs. We are planningmajor ports around Japan from factories overseas to each distribution center

to invest a total of around 350 billion yen by 2025, to set up eight of our own new(DC)*. The greatest characteristic of Home Cargo is that cargo transportation

distribution centers, ranging in scale from around 25,000 to 120,000 tsubo (83,000

is done in-house, using its own vehicles and drivers. In response to issues

to 400,000 square meters). As the ﬁrst step, Ishikari Distribution Center (DC) insuch as driver shortages, rising transportation costs due to soaring fuel prices, and the need for driver workstyle reform, we will

Hokkaido will begin operation in August 2022. Ishikari DC is equipped with newpromote visualization and streamlining of transportation costs, and vigorously work to create a working environment in which female

material handling equipment and an in-house refueling facility (in-tank), and canand elderly drivers can also work with peace of mind.

also handle disaster stockpiling by taking advantage of economies of scale.

*Distribution center (DC): A hub for stocking inventories

Subsequently, plans call for opening Kobe DC (Hyogo Prefecture), Nagoya DC(Aichi Prefecture), and Satte DC (Saitama Prefecture). Among them, Nagoya DC

Home Cargo’s role

will be NITORI Group’s ﬁrst distribution center in this part of Japan, covering theTokai and Hokuriku regions.
StoresFor further enhancement
Delivery Management
OfficeOverseas distribution
centers

Ports

DCs

Drayage transportation carried out
by Home Cargo

23

Customers

Improvement of warehousing
efficiency by introducing Automatic
Guided Vehicles (AGVs)

The new distribution centers will be equipped with AGVs for unmannedtransportation tasks that were previously performed by forklifts andpeople. We will increase productivity and safety by creating anenvironment where employees can focus on work with added value.

Shipping centers

24

NITORI Group’s Strengths -Sales (Stores) NITORINITORI Group’s Strengths -Sales (Stores) SHIMACHU

Making more people’s lives
comfortable and convenient by
expanding our store network

Safe and secure stores offering a convenient enjoyable
shopping experience where customers want to shop again

Sales (Stores)

Sales (Stores)

NITORI HOME’S Miyahara Store, an integrated store
featuring almost all the products of NITORI and SHIMACHU,
opened in June 2021

Stores are crucial contact points that directly connect customers with

The ﬁrst floor of NITORI HOME’S Miyahara Store is a home

NITORI Group. Going forward, we will accelerate the opening of new

improvement center that handles exterior items and daily necessities andstores in Japan and overseas so as to increase opportunities for moreconsumables as well as staple NITORI products, while the second floor

customers to visit our stores and physically touch and try our products. We

offers furniture and other products of both NITORI and SHIMACHU. The

are creating clearly laid-out sales floors that make shopping easy so that

store is notable for sales floors offering coordination suggestions

customers visiting our stores can have an enjoyable shopping experience

combining these products. In addition to NITORI products in low- andthat is only available at physical stores, which offer new products andmid-price ranges, SHIMACHU products in mid- and high-price ranges arevarious coordination suggestions. Furthermore, to improve customer

also available on the furniture sales floor. We are able to offer ourconvenience, we have introduced Touch de Concierge and increased thecustomers an unprecedented range of products. Offering a wide range of

number of self-service ordering devices and self-service cash registers.

products for the home, both for the interior and the exterior, NITORI

We will continue to offer an enjoyable and convenient shopping experience

HOME’S is NITORI Group’s ﬁrst store format for “new total coordination”

as part of the “new normal” way of life.

and will enable more customers in more communities to enjoy enriched
lifestyles.

Store Openings during Fiscal 2021

801

For further enhancement

708 stores in Japan

stores

Accelerating store
openings overseas
Eastern Asia:

By 2032

3,000 stores
25

472

stores22

stores140

stores18

stores56

storesUS:

2stores

90stores
Malaysia:store

1

Become destination stores byaccelerating NITORI Group store
openings in Japan and overseas
and renewing product lineups

NITORI Group is accelerating store openings. Plans call for net
increases of 100 stores in Japan and 43 stores overseas in ﬁscal
2022. As well as offering coordinating suggestions and proposing
products that can resolve customers’ frustrations and inconveniences,and strengthening our sales floor presentation skills with thoseobjectives in mind, we will focus on product development from thecustomer’s perspective.

26

NITORI Group’s Strengths - E-commerce

NITORI Group’s Strengths -A Wide Range of Business Fields
N+
Launched in 2019, N+ is NITORI Group’s apparel brand for women. Inspired by theconcept of “total coordinated clothing for adults,” the brand proposes fashion ataffordable prices that is comfortable to wear and can be easily coordinated. Looking
ahead, we will increase the number of N+ stores and further extend the range of PB(private brand) products to provide our customers with attractive products at even more
affordable prices.

Evolution toward a more convenientand more comfortable shopping
experience in response to changes
in consumption trends

E-commerceStrengthening customer contact points with a focus on the
NITORI app.Seamlessly connect stores and e-commerce tooffer a new shopping experience.

The NITORI app was launched in March 2014. It plays animportant role as a hub providing customers with a moreconvenient and more comfortable shopping experience by

Number of NITORI app members

Reached 13.14 million members
Target for fiscal 2022: 16 million members(Million members)

leveraging the advantages of both online and offline shopping. In

13.14

December 2021, the “in-store mode” was released for greaterdelivery dates on the app without having to ask sales staff. The
coordination menu and other new functions have also been added

Feb. 2020Feb. 2021

Feb. 2022

Feb. 2023

expanding new services that allow customers to view NITORI
products and easily purchase them on NITORI-net from the theirhomes.

For further enhancement

27

NITORI has cultivated strengths in developing products andsuggesting coordination through its residential furniture andhome fashion businesses. The Corporate Sales and Interior
Renovation Businesses draw on these strengths to propose
interior design of business spaces for corporate customers
and total renovation services for households, respectively.
We will continue to take on the challenges of the rapidly
advancing digital age, such as online consultation for homerenovation, in pursuit of solutions to customer inconvenience.

To enable our customers to fully appreciate the NITORI MALL
concept of “an abundance of products and affordable prices,”
we created a mix of shops focused on large specialty stores ineach category with the ability to pull in a broad spectrum ofcustomers, including popular stores selling apparel orhousehold items, and restaurants. By developing the NITORIMALL business, we will keep on contributing to enriched
lifestyles for local customers.

Nitori Facility Co., Ltd

Nitori Public Co., Ltd.

Nitori Facility is responsible for waste disposal, cleaning,and security, as well as for insurance services as aninsurance agency for NITORI Group. Our aim is not only tomaintain and manage facilities, but also to realize
optimization for the Group as a whole, by reducing costs andimprove efﬁciency, as well as enhance provision of beneﬁts
for employees.

Nitori Public is an integrated advertising agency. In addition to
conducting advertising and sales promotion for NITORI Group
companies, it also offers services to clients outside NITORIGroup in a wide range of business. Also emphasizing food andtourism, Nitori Public is engaged in the restaurant business andthe travel business, including the management of Ginrinsou, aJapanese-style hotel in Otaru, Hokkaido, and museum stores.
The company also has an export business utilizing NITORIGroup’s manufacturing and logistics network. Nitori Public plays
its part in enhancing corporate value.

NITORI Dining Everyone’s Grill

5.22

to the app. Other new initiatives include live commerce. We are

New functions of the NITORI
app to offer a more convenientand more comfortable
shopping experience

NITORI MALL Business9.08

convenience in shopping at a physical store. Customers can easily
check product location, inventory information, and pickup and

16.00

Corporate Sales and Interior Renovation Businesses

NITORI Dining Everyone’s Grill is NITORI Group’s restaurant business, which
Nitori Public started in March 2021. The guiding concept is “to provide service
that offers the unexpected and ensuring customer satisfaction in terms of both
flavor and price.” It procures only carefully selected ingredients, and by ensuring
operational efﬁciency it has succeeded in developing menus that combine highquality with reasonable prices. The business will continue to develop new menu
items and upgrade menu items to achieve NITORI Group’s mission and vision.

Establishing second and third pillars to support medium- to long-term growth“App de order,” a new function of the “in-store mode,” is to be released inJune 2022. Customers can use the app to create a list of products
selected in the store that they wish to order. After selecting the pickup
date, customers can proceed to the checkout counter just with theirsmartphone to pay for the products they ordered.

NITORI Group operates a range of businesses to enable customers to experience enriched lifestyles. Having supplemented
its established business by launching the N+ apparel brand and the NITORI Dining restaurant business, the Group is now
able to offer proposals to customers in all areas of clothing, food, and the home. We will continue extending the strengths
cultivated within the Group into new business areas as we endeavor to achieve our mission and vision.

28

NITORI Group’s Sustainability
Mission Statement

Sustainability Policy
Taking steps toward achieving our mission while resolving
the issues of the world, aiming for a better future.

Enriching homesof people all over the world

NITORI Group has been advancing to accomplish its mission of enriching homes of people all over the world. The Group’s
unique business model that integrates manufacturing, logistics, IT, and retail was developed in the course of this process. By
allowing us to achieve thorough efﬁciency enhancement and cost reductions, this business model makes it possible for us toEnvironmental
valueSocialvalue

Creation ofshared value

Vision 2032

3,000 stores ¥3 trillion in net sales

Economic value

offer customers products and services that live up to the concept of “offering the unexpected.” Furthermore, this businessmodel enables us to take actions for total optimization from the perspective of sustainability, leading to the creation of newvalue that contributes to resolving environmental and social issues. By repeating the process of rejecting the status quo and

NITORI Group’s Approach to Sustainability

promoting innovation, we will sincerely address each issue of the ever-changing world. Aiming for and pursuing a “better
future” for our customers and all other stakeholders, the environment, and society, we are committed to sustainability

Board of Directors

The Sustainability Management Promotion Council consistingof managers of operating companies whose functions relate tosustainability issues sets speciﬁc sustainability targets andformulates measures to address them. The Sustainability
Management Promotion Committee, chaired by the
Representative Director & President of NITORI Holdings, Co.,
Ltd., discusses general sustainability matters relating to
NITORI Group as a whole. Based on these discussions, theBoard of Directors provides advice on the progress of theinitiatives and determines the direction to be taken and themeasures to be implemented by NITORI Group.

Sustainability Management
Promotion Committee
Representative
Chairperson
Director & President
Director responsible for
Sustainability Management
Promotion

Director

Sustainability Management
Promotion Council

Climate action
3.4%
Industry, innovation andinfrastructure
4.3%

Zero hunger
0.9%

Decent work and economic growth
20.1%

Questionnaire in winterFY2021

Good health and well-being
6.2%

Sustainable cities and communities
13.8%
Responsible consumption and production
12.0%

Quality education
6.9%
No poverty
7.0%

29

Clean water and sanitation
0.4%

Social issues
employees wish to
resolve: Compositionof respondents

Reduced inequalities
11.9%

Trade

Avoid negative impacts
from working on ESG
issues

Logistics

Strengthen the business model that integrates manufacturing,logistics, IT, and retail by approaching from both ways
Stakeholders
Coexistence of humans
and nature by making
effective use ofnatural resources

Conservation of
biodiversity throughsustainable timber
procurement

Reduction in CO2 emissions bymaking efﬁcient use of energy

Partnerships for the goals
1.2%Life on land
1.1%

Gender equality
5.2%

Sales (Stores)

Sustainable
Development
Goals Promotion
Ofﬁce

At NITORI Group, each employee considers his or her career plan for the next 30 years and submits it to the company every six
months. In considering their career plans, employees link their plans to the social issues (SDGs) they wish to resolve and consider
solutions.

Enhance theorganizational strengthand supply chain fromthe perspective of ESG
issues

Quality Control

Governance

Sales (Online)

Group-wide Initiatives to Promote Sustainability

Peace, justice and strong institutions
2.1%

SystemDevelopment

Secretariat

Sustainability Management Promotion
Subcommittees

Life below water
1.5%

Manufacturing

Product
Planning

Response torisks andopportunities

Risk reduction

Growth of
NITORI Group

Raw Material
Procurement

Expansion ofopportunities

Initiatives toContribution toaddress
environmental stakeholders
and social issues

Sustainability Management
Promotion System

Affordable and clean energy
2.0%

Product
Development
Coordination

Creation ofshared value

management, to be beﬁtting NITORI Group.

I want affordable
andvaluable products

I want a comfortable
andfulﬁlling lifestyle

We want to achievesustainable growth

We want to contributeto enriching society for
future generations

I want to buy
products that aresafe and secure

I want to choose acompany that considers
people, society,and the environment

We want a work
environment where
empowerment anddiversity are respected

We want to support
companies that
we can foresee
sustainable growth

Environment

Expansion of “Nitori’s
ecology” products“Manufacturing”
xProtect Resources

Recycling initiatives incooperation withcustomers“Transportation”
xReduce CO2

Initiatives of overseas sites
and own factories to addressenvironmental andsocial issues“Use” x Save Energy

CSR activities

Suppliers,
local communities,
employees, shareholders
and investors

Customers

Recycling

Diversity

Reduction of the amount ofwater used / prevention of pollution

Recruitment

Climate change / energy

Occupational health & safety

Human resources
development

Partnership with suppliers
Governance

Number of respondents: 5,286

30

NITORI Group’s Sustainability

Materiality and Principal Activities
Materiality

Shared value

1 Pursue affordability, appropriate quality (functionality) andContribution to enriched
lifestyles by “offering theunexpected”

Product safety and security
through comprehensive
quality control

NITORI Group’s approach

Value creation forproviding enriched
lifestyles to customers

coordination
2 Resolve customers’ discontents,dissatisfactions andinconveniences
3 Offer new value that further enriches lifestyles (products andservices that can lead to solutions to environmental and social
issues)1 Quality control and product safety measures as a manufacturer
2 Share with suppliers ideas and initiatives to build culture of

product safety

Promotion of environmentallyfriendly business

1 Carry out all tasks more efficiently throughout the entire supply

chain

2 Make effective use of raw materials
3 Make effective use of recycled materials through innovation
4 Disclose and reduce greenhouse gas emissions from business

Simultaneous expansionof economic value andenvironmental and social
value
Fair and honest trade andrespect for human rights inthe supply chain

activities

Creation of a rewarding work
environment and promotionof diversity■Expansion of the restricted substances list to
include 108 substances. Enforced bans on use, or
restrictions on the amounts, of the relevant
substances in products

1 Education system that allows employees to realize self-growth
2 Job-roration to a variety of occupations in a wide range ofbusiness fields

3 Create a comfortable environment where everyone can work ingood health with peace of mind

P33 - 35

■Establish a global quality control system and localization of product eva
luation. (Introduction of centralized management of reports and datafrom product development through to supply in a database)P45 - 48

P22

■Resource circulation initiatives●Execution of a “down comforter recycling campaign”
and a “curtain collection campaign” (for limited timeat certain stores)●Development of “easy-to-sort” pocket coilmattresses that are easy to disassemble for
disposal■Climate change initiatives●Endorsement of TCFD recommendations andinformation disclosure in accordance with TCFD
P24
●Rebuilding domestic distribution centers■Expansion of store openings and sales

network and create stores supported by customers
2 Expand into global business (open stores and create
employment)
3 Disaster assistance and social action programs in fields otherthan the main lines of business

Relevant pages

P16

1 As a company that provide enriched lifestyles, expand the store

investigations

Simultaneously achieve
employees’ jobsatisfaction andenhancement of corporate
value■Expansion of the range of products that satisfy thecriteria of “Nitori’s ecology” under the slogan of“Good for the future. Good for everyone”■Development of a sales floor of lifestyle ideas tosolve customers’ frustrations and inconveniences■Development of products meeting new needs based on the voice of thecustomer■Development of a sales floor of lifestyle ideas to solve customers’
discontents, dissatisfactions and inconveniences■ Resolution of environmental and social issues by providing sustainableproducts

2 Establish true partnerships with suppliers

1 Supplier contracts based on strict standards and on-site

Creation of social value
through store openings
and support in terms ofhuman resources,
environment, and culture

Targets■All suppliers signed and endorsed the Supplier
Code of Conduct.
■Encouraged suppliers to obtain environmental
certifications so that the same targets are sharedthroughout manufacturing and sales.
■At the management policy briefing for overseas
suppliers, clearly stated the orientation toward
promoting sustainability management that takes
environmental and social issues into consideration.

Fair and honest trade, respect for human rights, work
environment creation, etc.

Contribution to local communities

Principal activities (from FY2021 onward)

P5-6, 25-28■Development of “Future IT Human Resources”
through industry-government-academia collaboration■Provision of learning opportunities through “LEARN
with NITORI” support project■Revision of the NITORI Group Code of Conduct*■Encouraging male employees to take childcare
leave■Establishment of rules to prevent harassment■Revision of education systems and training■Production and periodic distribution of content forinternal PR and awareness raising•Penetration of the SDGs in NITORI Group (“Take ownership ofsustainability”)■Response to climate change (TCFD metrics and targets)Greenhouse gas emissions reduction targets (global, Scopes 1 and 2)●FY2030: 50% reduction compared with FY2013 (emissions per 100
million yen of net sales)●FY2050: Become carbon neutral. (net zero emissions)■Waste reduction and recycling (domestic operations)●FY2030: Amount of waste discharged (general waste and industrial
waste)
30% reduction compared with FY2018 (Amount of waste per 100 million
yen of net sales in Japan)●FY2030: At least 95% recycling of industrial waste■Promotion of sustainable procurement●First, establish a traceability system together with suppliers to achieve“sustainable timber procurement.”

P36 - 40P45 - 48

■Achieve 3,000 stores in FY2032, becoming a destination store in thecommunity, based on the conviction that the ever-increasing number ofcustomers is the metric of social contribution

P49 - 50

■Increase the percentage of women in management positions of 5 key
Group companies in Japan to around 40% in the 2030s.
■Increase the percentage of non-Japanese employees in management
positions by promoting assignment of non-Japanese employees tomanagement positions■Increase the percentage of mid-career hires in management positions
by continuing recruitment of specialists.

P41 - 44

■Continue to strengthen the corporate governance system based on the
belief that corporate governance is the indispensable foundation forachieving the above sustainability management targets.

P51 - 58

•Improvement of employees’ health literacy and awareness, etc.

Effective corporate governance

Ensuring transparency
and soundness ofmanagement
Speedy decision-making
and business execution

1 Build a foundation that supports medium- to long-term

corporate growth and create decision-making systems and abasis for active discussions
2 Ensure compliance
3 Build a robust risk management system■Securing of diversity of the Board of Directors byappointing two female directors■Strengthening of the monitoring functions of theBoard of Directors by greater delegation of authority
to representative directors*The NITORI Group Code of Conduct is linked with materiality to facilitate employees’ action.
31

Information on the process for identifying materiality is available on the website.

32

NITORI Group’s

NITORI Group’s Sustainability

E SG

Nitori’s ecology

Environmentally friendly storage series
Popular storage products (N-inbox, A4 ﬁle storage,
DECONY chests of drawers) are now available inenvironmentally friendly black color. Recycled raw materials
account for more than 20% of the raw materials used in the
manufacture of the new black product lines, which werecreated in response to feedback from customers.

Under the slogan of “Good for the future. Good for everyone,”NITORI Group is promoting environmentally friendly initiatives ineach process of manufacturing, logistics, and use, positioning
them as “Nitori’s ecology” products. When manufacturing, wechoose recycled materials if possible and conserve ﬁnite
resources. For logistics, we reduce packing size and cut CO2
emissions. We develop functions that link product choose withenergy saving. As NITORI Group is involved in all processes
from the upstream to the downstream, the Group takes
responsibility not only as the seller but also as the manufacturer
and sets its own environmental standards. We will continue toexpand the range of products that meet the “Nitori’s ecology”
standards.

Soup bowls made ofrecycled plastic“Manufacturing”
Conserve Resources

Stack Series
Neatly stackable and easy
to store in drawers or on
shelves.

Carpets and rugs made from recycled plastic bottles
SIAM NITORI, our own factory in Thailand, is the sole factory using
special technology to manufacture carpets and rugs with recycled
polyester made from plastic bottles, etc. and supplying them to Japan.
One carpet approximately 10m2 in size, can be made with recycled
polyester extracted from approximately a hundred 500ml plastic bottles.
The factory manufactures approximately 3,750,000m2 (equivalent to 80
Tokyo Domes) of carpet from recycled plastic bottles amounting to as
many as 100 million bottles a year. This initiative also contributes to the
reduction in the use of ﬁnite resources, such as fossil fuels, because
synthetic ﬁber derived from petroleum, which is typically needed in
manufacturing carpets and rugs, is not used. While the use of recycledmaterials generally increases costs thus selling prices, NITORI Group
manufactures affordable, high-quality products with its unique technology,
implementing radical cost reduction strategies.

Multi Series
Different sizes (S, M, L) canbe nested.

“Logistics”

Slim Series
Slim width allows neatstorage on shelves.

For Stack Series, Multi Series,
and Slim Series soup bowls,
recycled raw materials account for
more than 10% of the raw materials
used in their manufacture.

Reduce CO2

NITORI Group sells various products in compressed packagings, such as bed mattresses, futons, comforters, and nudecushions. By adopting the unique compressing technology, the packing size of bed mattresses is reduced to 25%. Reduced
packing size means an increase in the number of products that can be loaded in a container or a truck, resulting in signiﬁcantenhancement of product transportation efﬁciency and reduction in CO2 emissions associated with logistics.
A reduction in the packing size has made it possible for customers to take the products home on the day of purchase,
eliminating the need to pay shipping fees. Customers can start using the products right away, without waiting for their delivery.
Recycling system throughmanufacture and sales of carpets
made from recovered plastic bottles<Compression Packaged>

Related page: p.38 (Reduction of the Amount of Water Used / Preventionof Pollution)*The illustration is forreference purposes only.

Plastic bottles

33

Polyethylene
terephthalate (PET)
chips

Polyester fluff

Polyester spun yarn

Carpets/rugs

34

NITORI Group’s Sustainability“Use”

NITORI Group’s

E SGResource Circulation

Save Energy

PolicyContributing to the reduction of energy use in customers’ everyday lives
by developing and selling products with environmentally friendly functions

N Cool / N Warm

Cumulative
total sales**From FY2012 to FY2021

Cumulative
total sales**From FY2012 to FY2021

61million

units

42million“I want to sleep comfortably without using airconditioning in the summer or the winter.” This voice ofthe customer led to the development of the moistureabsorbing, heat-generating N Warm series (launchedin 2011) and the N Cool series using materials that feelcool to the touch (launched in 2012). We were able todevelop products that are sufﬁciently functional while
also being affordably priced and of appropriate quality
by managing the proportions of different threadmaterials. We took advantage of this, and as a result,the product was a major hit.
Using N Cool and N Warm reduces the use of
air-conditioning at home and also contributes to the
reduction of energy use.
We are expanding the range of products andenhancing functions of the series to meet various
needs of customers, including those of babies andpets, and to contribute to more comfortable lifestyles
and environmental impact reduction.

units

ECONATURE functional lace curtains“I am concerned about privacy, ultraviolet light, and outside air, but I want to take in light in the room.” Customers hope toensure privacy protection, keep comfortable room temperature, and take in sufﬁcient sunlight. ECONATURE™ functionallace curtains satisfy such needs. The curtains use new materials, thread that insulates heat but allows light to pass through,and keep the room light by taking in sunlight while making it difﬁcult to see inside the room and keeping privacy. In addition,
they cut outside heat in the summer and cold air in the winter. As the room temperature becomes less affected by outside air,
air conditioning and heating efﬁciency at home increases, which leads to energy saving.

NITORI Group recognizes the ﬁnite nature of resources and strives to reduce the amounts of resources used and the amounts ofwaste discharged by making effective use of resources and promoting resource circulation, not only within the Group but also
throughout the entire supply chain, including suppliers. Speciﬁcally, aiming to be an enterprise that reduces waste, ideally generating
no waste, and recycles waste as resources, we strive to reduce the amounts of waste discharged while at the same time reducing theamount of waste that is not recycled but discharged by means of landﬁll or simple incineration. We will promote activities both before
and after discharge of waste.

TargetsBy FY2030,

30

1% reduction* in the amount of waste discharged (general waste and industrial waste) compared with
FY2018 (per 100 million yen of net sales in Japan)
2 At least

95%* recycling of industrial waste

3 Promote “conversion of waste into resources” as an initiative to eliminate waste in the ﬁrst place.

■Expand product development with a view to recycling from the planning and design stages (circular economy)■Promote recycling of products and packaging materials (collection and recycling)* 1 and 2 are for domestic operations.

Development of “easy-to-sort” pocket coil mattresses that are easy todisassemble for disposal
Designed to resolve social issues and to make effective use of resources after use
With pocket coil mattresses, independent coils support the body while conforming to its contours, dispersing body pressure andmaintaining a comfortable sleeping position. On the other hand, regarding disposal or sorting, they are not easy to carry due to theirsize and weight, and some local governments designate them as items that are difﬁcult to dispose of properly because the coils must
be removed one by one. This has become a social issue as some waste management companies state that they cannot keep up with
the need for processing. The newly developed “easy-to-sort pocket coil mattresses” greatly reduce disassembly time, fromapproximately 55 minutes to approximately 6 minutes, compared to our conventional product (*1). Customers themselves can now
disassemble pocket coil mattresses for sorting. After disassembly and sorting, it is easy to take the disassembled and sorted parts todisposal/collection points, thus greatly reducing the burden not only on customers but also on waste management companies andlocal governments (*2).
For the effective utilization and circulation of ﬁnite resources, sorting at the time of disposal plays an important role. We believe thatas more products become easy to disassemble and sort by anyone, the effective use of resources will be promoted. NITORI Groupwill continue to contribute to a sustainable future by developing and designing products with their end-of-use in mind.
*1 Based on our own research (two-person operation)*2 Disposal guideline after sorting differ according to local governments. Even after disassembly and sorting, some items mayneed to be collected as oversize garbage, or may not be collected by local governments. Please check with your local
government for details.

Summer insulation

over 25%

Winter heat retention

over 20%

Compressed roll packaging improvestransportation efﬁciency. It also contributes tothe reduction of CO2 emissions.

35

36

NITORI Group’s Sustainability

NITORI Group’s

E SG

Initiatives to reduce waste

Down comforter recycling campaign

NITORI Group wishes to utilize ﬁnite resources as effectively as possible by promoting the sorting of waste at the disposal stage. In
cooperation with stores and distribution centers, we are currently conducting various veriﬁcations for the conversion of waste into
resources. Going forward, we aim to establish a disposal flow that makes the most of NITORI Group's unique business model
integrating manufacturing, logistics, IT, and retail.
● Sorting of metal and wood scraps from waste items

Sorting of metal

Waste items are dismantled at delivery management ofﬁces* andmetal and wood scraps are sorted manually (at some sales ofﬁces).
Metal and wood scraps are then collected by waste managementcompanies and recycled as resources and solid fuel, respectively.
* Delivery management offices: Sites that are responsible for the“last mile” of delivery of products (mainly large furniture) from the
distribution center to customers

Separate metalparts from waste→ Recycle as
resources

Sorting of scraps●Sorting of used stretch film (packing wrap)
Stretch ﬁlm used at distribution centers is sorted. The sorted stretch
ﬁlm is collected by waste management companies and recycled as
garbage bags. NITORI Group purchases the garbage bags as supplies
for in-house use and contributes to resource circulation.
Separate wood scraps used as cushioning material →Recycle as solid fuelResource Circulation Together
with Customers
In keeping with its aspirations, NITORI Group is an enterprise that considers options for end-of-use products, instead of disposingof the end-of-use products they had used, customers can bring them to NITORI for recycling and reuse. For a sustainable future, wewish to work together with our customers to create alternatives to disposal. The ﬁrst step in this approach is a “down comforter
recycling campaign” and a “curtain collection campaign.” We will continue to increase the number of materials that can be collected,
recycled and reused step by step, expanding our initiatives that are friendly to both customers and the environment.

Curtain collection campaign
We executed a curtain collection campaign at 43 stores in the Tokyo
metropolitan area from May 17 to June 13, 2021.
In this campaign, curtains that customers no longer need are collected free of charge
at stores regardless of the seller, and recycled as sound-absorbing materials forautomobiles. As a result of the campaign, we collected some 5 tons of curtains thanks tothe participation of 1,936 customers.
In 2022, NITORI will expand the curtain collection campaign to 556 stores nationwide.
Collected curtains will be used as products and fabrics overseas or recycled as soundabsorbing materials for automobiles in Japan.

As the ﬁrst step to promote resource circulation for recycling andreprocessing, a down comforter recycling campaign was held from
November 1 to November 28, 2021, at 15 stores in the Tokyo metropolitan
area.
Based on the concept, “Resources are ﬁnite. So choose reuse andrecycle rather than disposal,” down comforters that customers no longer
need in their homes are collected free of charge at stores, regardless ofthe seller, and disassembled, cleaned, and reprocessed as new down
comforters. As a result of the campaign, we collected some 750 down
comforters. (Equivalent to about 75,000 ducks. *One single-size comforter
contains down from approximately 100 ducks.)
The reprocessed down comforters are scheduled to be released aroundthe fall of 2022. Through this initiative, we have established a circularsystem from collection to reprocessing and sales. By continuing these
initiatives, we will promote the reuse of resources.

Reduction of the Amount of Water Used /Prevention of Pollution
Policy on reduction of the amount of water used
Recognizing the ﬁnite nature of water resources and the riskthat water shortages pose to our business, we will strive to
reduce the amount of water used throughout our supply chain.

Policy on prevention of pollution
Recognizing the risk that air and water pollution poses to ourbusiness, we will safely manage chemical substances
potentially hazardous to the environment throughout our
supply chain.

Manufacturing carpets and rugs using a waterless coloring process
SIAM NITORI, our own factory in Thailand, is working to reduce the amount of water it uses, which is a ﬁnite resource, and toprevent pollution in the carpet and rug coloring process. Generally, large amounts of water and heat are used in the dyeing process.
In addition, subsequent effluent processing is essential. On the other hand, SIAM NITORI colors carpets and rugs by kneading
pigments directly into recycled raw materials (polyethylene terephthalate (PET) chips). Therefore, no water is used in the coloringprocess, and there is no need for effluent processing after coloring. In recognition of this environmentally friendly manufacturing,
SIAM NITORI was selected as the ﬁrst Green Label company by the Tourism Association of Thailand.
Polyethylene terephthalate (PET) chips

Pigments

Plastic bottles
PET chips made from crushed plastic bottles are mixed withpigments and dissolved for coloring (no water used, no effluent
generated)

Colored raw materials are flocculated and madeinto threads and processed into carpets and rugs

Related page: p.33 (“Manufacturing” x Conserve Resources)

37

38

NITORI Group’s Sustainability

NITORI Group’s

E SG

Climate Change / Energy
PolicyNITORI Group recognizes a range of risks caused by the impact of climate change, and by taking advantage of our unique businessmodel, we pursue total optimization of all stages of our supply chain to improve efﬁciency and the level of optimization, thereby
reducing greenhouse gas emissions and mitigating the impact of climate change.
In ﬁscal 2021, to further improve the effectiveness of our response to the important management issue of climate change, we
endorsed the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and participated in the TCFD
Consortium, a forum for discussion among supporting companies and ﬁnancial institutions. We will continue to disclose information
on “Governance,” “Strategy (analysis of risks and opportunities),” “Risk Management,” and “Metrics and Targets” in accordance with
the TCFD recommendations. Moreover, we recognize the ﬁnite nature of the energy resources essential for our business activities,
and by taking advantage of our unique business model, work to reduce energy consumption by enhancing the efﬁciency of energy
use throughout the supply chain.

Revision of internal operational procedures for “combined delivery to thecustomer’s home” x Reduction of CO2 emissions
Minimizing the frequency of deliveries to the customer’s home as much as possible by combining deliveries, meets customers’desire to receive multiple products in a single delivery, and also leads to a reduction of CO2 emissions associated with deliveries. For
customers who order interior products at the same time as furniture at stores, NITORI offers a “combined delivery service to thecustomer’s home” so that all the goods ordered will be delivered at the same time. However, this service had drawbacks: it imposed aheavy burden on stores and was also affected by inefﬁcient transportation (Figure 1). We revised internal operational procedures for“combined delivery to the customer’s home” in ﬁscal 2021 (Figure 2). Not only has the burden of conventional store operations been
reduced, but the number of trucks operated has also been reduced, contributing to a reduction in CO2 emissions.

Revision of internal operational procedures for “combined delivery to the customer’s home”(if customers order interior products at the same time as furniture)(Figure 1) Before: Delivery of the standard packing quantity
Pattern (1)Shipping from the store to a customer’s home
Shipping by the standard
packing quantity
Excess units will also
be transported

Waste

Excess inventory generated

Interior products andfurniture are delivered
separately

Customers receive furniture and interior products in one go, less frequent shipments

CustomerLess frequent
shipments

CO2

Sales office*Furniture to be deliveredfrom a sales office

Only the necessary quantity isdelivered to the sales office.

Pattern (2)Products are shipped from the store to the sales office.
Or a truck of the sales office collects products from the store anddelivers them to the customer.
Excess inventory
Shipping by the standard
Waste
generated

Details: NITORI Holdings website > Sustainability > Climate-related Initiatives (Disclosure based on TCFD Recommendations)

Distribution center

packing quantity
Excess units will also
be transported

CO2

Delivery together
with furniture

Sales office

Customer

Can have interior products
and furniture deliveredat the same time

Waste

Store

Distribution center

Delivery of the number of items ordered

Waste

CO2

Store

Distribution center(Figure 2) After:

Frequent transportationof products

CO2

Targets

CO2

We aim to reduce Scope 1+2 greenhouse gas emissions (including overseas sites) as follows.
Fiscal 2030:

50％reduction compared with fiscal 2013 (emissions per 100 million yen of net sales)

Fiscal 2050: Become carbon neutral (net zero emissions)

Going forward, we will promote the development of products with environmentally friendly functions, including reduction ofgreenhouse gas emissions during the customer's use of the product, and initiatives for waste reduction and recycling. We will also
consider disclosing information on reductions of Scope 3 greenhouse gas emissions.

Measures
To achieve the above targets, we will pursue several measures, including the use of renewable energy, replacement of electricity
and gas facilities with energy-efﬁcient ones, and adoption of construction methods and building materials with high thermal insulation
properties for NITORI Group facilities. To promote capital investment leading to reductions in greenhouse gas emissions, we arepreparing to introduce “Internal Carbon Pricing (ICP)” as a tool for making investment decisions based on the expected future carbon
costs (carbon tax, emissions trading, etc.) in ﬁscal 2023. As for the use of renewable energy, we plan to start solar power generationon the roofs of NITORI Group stores and distribution centers where it is practicable to install systems. The wider introduction of solar
power generation systems is expected to make a signiﬁcant contribution to the achievement of the above targets.

Details: Press release > Japan’s first feed-in premium solar power generation project on the roof of NITORI Group’s own
buildings, one of the largest such projects (as of July 2022)

39

Sales office

Delivery together
with furniture

CustomerIntroduction of swap body containers x Reduction of CO2 emissions
Improving the efﬁciency and loading rate of truck
transportation is an important issue for reducing CO2
emissions. NITORI Group has introduced swap bodycontainers as a measure to address this issue. Swap bodycontainers can be separated from trucks. After separating thecontainer from the truck at the destination, unloading is
performed by warehouse workers, while another container thatis already loaded can be placed on the truck and transported.
In addition, in the case of long-distance transportation
between sites, drivers can exchange containers with eachother at an intermediate point. (*Figure on the right). As aresult, the total transportation distance and transportation of
empty containers after unloading at the destination are
reduced, leading to more efﬁcient transportation and a higher
loading rate. By utilizing these swap-body containers, NITORI
and 2 oher companies from different industries launched ajoint transportation project, where we have reduced thenumber of empty transports throughout domestic logistics,
thereby reducing the number of trucks in operation and CO2
emissions.

Intermediate site
Site A
Intermediate site

Site B
Intermediate site

Site A

Site B
Intermediate site
Site A

Intermediate site
Site B

Exchange

In the case of long-distance transportation between sites, it ispossible to exchange containers at an intermediate point.

40

NITORI Group’s

NITORI Group’s Sustainability

E SG● Compliance training

Human Resources Development
PolicyNITORI Group is committed to human resources development by offering education tailored to individuals’ needs, with transferbased education that covers an extensive range of ﬁelds constituting its core, aiming to create an organization with a wealth of elites.
To develop true specialists who can contribute to society, education for learning core competencies and specialized skills is provided
according to employees’ roles and positions. We have an education system in place that allows each employee to explore his or her
own potential through various educational opportunities and to move forward with a clear vision of where he or she wants to be.
Related page: p.4 (NITORI Group’s Human Resources Development)

Education system
Number ofyears ofemployment

Base
Competency
Analyticalthinking skills

Competitive/
Communication HRLeadership
growth capabilities
development

Core competency
Achievement
orientation

Career support Philosophy

Chain store
theoryCoordination

IT

Global

Education on
performance
metrics

GlobalPerformance
metrics

From
11th year
onwardGlobal human resources
development program

Education on
performance
metrics for
management

Management
efficiency
performance
metrics

Overseas chain I

IT literacy
improvement
training

Coordination
training

Global mindset training

How tocoordinate

Digital literacy improvement training

How tocoordinate

Joint briefing bydepartment

Chain trainingfor
new employees

NITORI coordination training Basic course /Advisor course / Planning course

Chain I
Introductory
U.S.
seminar

Career work

Training for 1st to 3rd year employees

In-store work
Sales floor andproduct basics
U.S.
seminar

Visionary Leader Development Training I

Chain II
U.S.
seminar

Visionary Leader Development Training II

U.S.
seminar

Visionary Leader Development Training III

Seminars by Chairperson, President, andOther Executives (Mission / Vision)

Visionary Leader Development
Training II Headquarters

Career work

Businessskills training

1st yearFresh NWC

2nd year

General / matching Nitori World Circle (NWC)

3rd yearBusinessskills training

4th-6thyear

Visionary Leader Development Training IV

Businessskills training

6th-10thyear

Overseas

Chain store theory for overseas

Japan

Chain store
theoryProfit structure

Floor
performance
metrics

Interest in
performance
metrics
Revenuestructure

List of training programs (excerpt)● Job shadowing training *Part of training for employees in their firstyear to third year

A form of career education in which participants accompany employees of various
departments and experience the work and think about their future workstyles. In ﬁscal
2021, 15 departments/teams accepted the participants. This training helps employees
formulate career plans by experiencing the work they wish to do and the tasks at
departments they wish to be assigned to.

● Training for part-time employees
We have enhanced online training programs for part-time employees working at stores across Japan. This initiative was led by theStore Operations Division, and the intention was to keep offering education opportunities during the COVID-19 pandemic. Dedicatedtrainers serve as instructors of the training program, which is offered live. The program lays emphasis on interactive communication,
thereby bringing out the participants’ eagerness to learn.
● Introduction of digital signage to break rooms at storesTo create a work environment where employees can work with peace of mind, we put a great
effort into facilitating communication between the company and our employees. As part of theeffort, monitors are installed at each store, which stream the latest information on thecompany, to increase the amount of knowledge full-time and part-time employees have andthe level of their satisfaction. By soliciting information from each department, we have asystem in place to deliver balanced, up-to-date information.

Diversity
PolicyNITORI Group promotes diversity & inclusion, considering that fostering a corporate culture where employees in different
circumstances and with different backgrounds, in terms of childbirth, childcare, nursing care, nationality, sexual orientation, etc.,
acknowledge and respect each other creates an empowered work environment and leads to the company’s growth.
Related page: p.61 (Sustainability Data Book “Diversity & Inclusion”)● Promoting women’s participation and advancement in the workplace
We have been holding career support seminars since 2014 to encourage women to fully
demonstrate their individual ability in carrying out their tasks. Female employees of all ages
and positions participate in these seminars, where they exchange opinions on work-lifebalance and careers. In ﬁscal 2021, we held an exchange meeting with female employees ofother companies. Issues raised in these seminars often lead to our future policies. We aim to
be a company where each female employee enjoys her work and, with that in mind, we strive
to be attentive to the voice of employees.
● Encouraging male employees to take childcare leave

For employees in their fourth year and beyond, training is provided according to rank
and role. Programs include training for current store managers nationwide on planningand proposal skills and counseling skills and training for employees assigned toheadquarters on logical thinking and presentation skills.

We believe that in order to realize an organization that allows diverse work styles, it isimportant to vigorously support employees in taking childcare leave so that all employees canparticipate in childcare regardless of gender. As part of this initiative, we are redoubling ourefforts to encourage male employees to take childcare leave, disseminating information on
the in-house portal site, providing education for supervisors, and distributing materials that
concisely explain how to take childcare leave.

●IT training● Job return system● Visionary Leader Development Training

A new training program has been introduced for improving IT literacy in order to promote reform focused on future needs. By
equipping all employees with the knowledge and skills to use IT to solve business problems, we will strengthen the skills of“observation, analysis, and judgment” and promote reform utilizing IT. By incorporating IT in the education system, we intend toinvigorate reform proposals from the ﬁeld, leading to service improvement and corporate growth.

41

Training led by the Legal Ofﬁce. Online training is provided each month for all employees on basic compliance knowledge to raise
the level of knowledge and compliance awareness. In addition, department-speciﬁc training on laws and regulations is also provided,with curricula reflecting the requests of each department. Employees involved in the legal ﬁeld in each department take this course toacquire the knowledge of compliance necessary for their work.

We have established the job return system to rehire retired employees and enable them to once again put their accumulated
knowledge and skills to good use. This system is available not only for employees who left the company for reasons such as
marriage, childcare, and family care, but also for employees who left the company for career advancement reasons such as changing
jobs or studying abroad, enabling them to take on new challenges while accommodating their personal circumstances.
42

NITORI Group’s Sustainability

NITORI Group’s

E SG

Occupational Health & Safety
PolicyNITORI Group strives to ensure workplace safety and aims to create a comfortable work environment where all our employees
work in good health.

At NITORI Group, convinced that creating a comfortable work environment and ensuring thephysical and mental health of our employees are essential for corporate growth, we are promoting
health and productivity management. The company, labor union, and health insurance society
work together to support the health of employees and their families by proactively promoting theimprovement of the work environment, diversity, and employees’ health.

Promotion of work-life balance
We believe that enhancing the lives of employees can improve work performance, and aim
to be a family-friendly company for both employees and their families. A half-day paid leavesystem was introduced in 2016, and a work interval system in 2017. We take a strict attitude
against unpaid overtime. Employees who continually work overtime, as well as their
managers, are notiﬁed by the Human Resources & Labor Division. If the monthly overtime
hours of subordinates are signiﬁcant, an improvement plan needs to be submitted to the
management. We thus promote the reduction of overtime hours across the company. In
addition, to further promote work-life balance, we have started a campaign to simultaneously
turn off all lights at the head ofﬁce and headquarters. In recognition of these ongoing
initiatives to create a comfortable work environment, we received the White Company Awardfor the second consecutive year.

Mitsuru Ohki

Managing Executive Officer, President
NITORI Health Insurance Society

Training on occupational health & safety
We established the Health Management Declaration in 2016 to vigorously promote theimprovement of employees’ health. To improve employees’ health literacy and awareness, wehold various in-house events such as health checkup challenges* and walking campaigns. In
addition, to create a safe work environment, we conduct training on occupational health andsafety management four times a year mainly for on-site managers. At monthly meetings
attended by store managers from across Japan, the Human Resources & Labor Division
provides information on cases of occupational accidents and countermeasures. At Home
Logistics, the Safety and Environment Division is spearheading the creation of an environment
in which accident prevention is pursued with the utmost rigor. For example, to prevent
accidents due to insufﬁcient forklift operation skills, the company provides in-house driving
training.
*An event in which employees pursue further improvement of health checkup results based on the previous
year’s results. All employees are eligible to participate in this challenge.
Related page: P61 (Sustainability Data Book “Occupational Health & Safety”)

Measures to prevent harassment
Harassment denies the personality and diversity of employees and undermines the work
environment. NITORI Group has been and will continue to do its utmost to eliminate
harassment. In ﬁscal 2021, in order to raise employee awareness of harassment prevention,
we established harassment prevention rules that deﬁne harassment and prohibited conduct.
We are putting in place a whistleblowing system, including the establishment of harassment
helplines, which are publicized through internal newsletters and posters. With the aim ofcreating a workplace where harassment is neither tolerated nor allowed to occur, we are
pursuing various initiatives, including practical communication training for managers anddesignation of a month in which harassment prevention is emphasized.

43

Recruitment● New graduate recruitment
The recruitment philosophy of NITORI Group is, “Your dream shapes who you are.”To support students to think carefully about their purpose for working and their futuregoals before deciding to join NITORI Group, our third- to sixth-year employees, whowork as the recruitment staff, take care of each student and offer support until they
make the decision to join the company. Since ﬁscal 2020, we have conducted online
recruitment activities amid the COVID-19 pandemic. In ﬁscal 2021, more than 19,000
students attended our brieﬁngs in total, and we were able to speak to a large numberof students and complete our recruitment activities.
● Recruitment from overseas
For NITORI Group’s global business development, global-minded human resources
are essential. We used to send our own employees to overseas job fairs to ﬁnd talent,but such events were cancelled due to the COVID-19 pandemic. In the face of thecancellations, we participate in online job fairs and continue with our recruitment
activities by directly negotiating with overseas universities and student organizations.
In addition, we actively participate in events at universities specializing in foreign
languages to recruit global-minded human resources in Japan.

● Internship
NITORI Group’s internship program aims for “zero stranded job-hunting students.”
The purpose of the program is to help students face job hunting in a positive mindset,
by letting them think about their purpose of working, as well as learn how to selfanalyze themselves and analyze different companies. In ﬁscal 2021, 31,000 students
participated in NITORI Group’s internship program. We hope to support students with
their ﬁrst step in job-seeking. With this in mind, in ﬁscal 2022, we also launched aninternship program for ﬁrst- and second-year university students as an opportunity tothink about what “working” entails.

44

NITORI Group’s Sustainability

NITORI Group’s

E SGPartnership with Suppliers
PolicyWe ask suppliers, who are our partners in achieving NITORI Group’s mission, to not only comply with laws and regulations but alsoestablish what we consider to be true partnerships with us. Together, we will achieve sustainable growth throughout the entire supply
chain. In ﬁscal 2021, we reiterated the Supplier Code of Conduct to all suppliers and obtained their signatures and endorsements.

True partnership

Related link: Supplier Code of Conduct (PDF)

A relationship where both sides learn about the latest topics, including those relevant to corporate management, share theknowledge and work hard together.
2 A fair, honest, highly transparent, and open relationship where both sides can engage in active exchange of opinions.
3 A relationship where both sides share not only ideas and management methods for the creation of a culture of product safety but
also the importance of fulﬁlling social responsibilities, such as being environmentally conscious*1, respecting human rights*2, andmaintaining an appropriate work environment*3 and grow together to achieve the mission.
1*1 Being environmentally conscious in accordance with NITORI Group’s Environmental Policy*2 Prohibition of forced labor, child labor, and discrimination, etc.
*3 Preventing overwork, ensuring more leave than statutory requirements, paying the statutory minimum wage, ensuring workplace safety,
maintaining a comfortable workplace environment where employees work in good health, etc.

Targets
Based on this policy, NITORI Group is promoting “sustainable procurement.” First, we will establish a traceability system together
with suppliers to achieve “sustainable timber procurement.”

In order to deliver safe and secure products to customers, NITORI Group audits potential new suppliers to determine whether to
use them. We conclude contracts only with suppliers that have passed a rigorous on-site investigation covering a total of 244 items,
including quality assurance items and responses to environmental and social issues.
Related page: p.62 (Sustainability Data Book “Status of Performance of Audits of New Overseas Suppliers”)

Sharing with suppliers (addressing environmental and social issues)

Related page: p.62 (Sustainability Data Book “Number ofManagement Policy Briefings for Overseas Suppliers”)

Please tell us how your company has grown through the relationship with NITORI Group.
We started out as a small OEM manufacturer. We have grown together with NITORI to be a manufacturer with several factories
underpinned by production, and management systems. With NITORI as a source of knowledge and a role model for us, we havelearned much—everything from turning crises into opportunities, business models, and human resources development to social
responsibility and mission fulﬁllment. We are delighted that NITORI has guided us in our development, production, and quality control
for more than 20 years.

What do you emphasize in manufacturing?
It is crucially important to anticipate and prepare in advance for the various problems that may arise in manufacturing. We
emphasize stable quality through improved manufacturing technology and on-time delivery through overall personnel and equipment
management. And we constantly review, improve, and reform manufacturing processes to reduce costs. In addition, as part of ourinitiatives to address environmental and social issues, we propose products made from organic materials and recycled materials(polyester ﬁber), and focus on employee welfare, human rights, and education. We feel that our initiatives in the sustainability-relatedarea are already an integrated part of our corporate culture.

As the company grew, the number of factories increased, but the experience and abilities of managers were not standardized,
resulting in uneven management methods and quality levels among factories. In order to achieve our creed of “improving
manufacturing capabilities and providing value-added products to our customers,” we had to establish standardized management
methods throughout the company and operate factories in a manner that would ensure quality, cost, and delivery schedule. So, we
participated in NWC activities for the ﬁrst time in 2013. The company participated in NWC every year through ﬁscal 2021 (nine times
in total), becoming one of the few companies in the industry that continue improvements and reforms, such as “module production
and improvement of production efﬁciency through equipment modiﬁcation.”

What were the beneﬁts of participating in NWC? How did your company grow or change?
At ﬁrst, some employees were reluctant to embrace changes to work procedures and methods to which they were accustomed, but
we continued training and took steps to motivate participation, including commendation of outstanding efforts. As a result, each
employee has become aware of the need to identify issues and make improvements and this awareness has gradually become
pervasive. Now, I feel that the involvement of all employees in identifying issues and making improvements and reforms has takenroot in our corporate culture, leading to human resources development and corporate growth. NWC not only contributed to theimprovement of factories but led to the reform of the entire corporate culture. We will continue making improvements and doing ourutmost as a supplier to achieve NITORI's Vision 2032 together with NITORI.
Nitori World Circle (NWC) activities

Management Policy Briefing for Overseas Suppliers (in 2019)*Online brieﬁng in ﬁscal 2020, dispersed to various locations in FY2021

NITORI Group procures or manufactures approximately 90% of its products overseas. NITORI Group’s
manufacturing is supported by many suppliers in 12 countries and regions. For NITORI Group, suppliers are“partners” with whom we can grow together and fulﬁll our mission. On the following pages, we introduce the history
of NITORI Group’s partnership with suppliers, with comments from the suppliers.

45This supplier manufactures N Cool and N Warm bedding products, which are
NITORI Group’s mainstay products, other bedding products, bedding accessories,
and interior products and has had a business relationship for over 20 years. They
actively participate in Nitori World Circle (NWC) activities held by NITORI Groupand has proposed “module production and improvement of production efﬁciency
through equipment modiﬁcation” and so on. It is one of the few companies in theindustry that continues to improve and reform.

What prompted you to participate in NWC?

Audit of potential new suppliers

NITORI Group aims for sustainable growth together with
suppliers by explaining and sharing not only its approach tobuilding a culture of product safety, but also the importance ofaddressing environmental and social issues. At the management
policy brieﬁng for overseas suppliers for ﬁscal 2021, theMerchandising Division explained NITORI Group’s orientation
toward sustainable product development that takes environmental
and social issues into consideration (recycling, environmental
certiﬁcation, sustainable raw material use, etc.). The Sustainable
Development Goals Promotion Ofﬁce explained the need for“sustainable timber procurement” to protect biodiversity.

Supplier Interview (1)NWC activities are long-standing initiatives where like-minded employees form ateam, identify issues from day-to-day tasks, and promote improvements andreforms. This year marked the 16th year since the launch. The activities take place
at NITORI Group sites across the world and play an important role as a platform
to directly deliver the voice of frontline employees to the management. In ﬁscal
2021, a total of 374 teams, both domestic and international, participated, of which
30 teams were from overseas suppliers. Many examples of supplier-led
improvements and reforms were presented.

Overseas NWC (held in 2019)*Online NWC in fiscal 2020 and 2021

46

NITORI Group’s

NITORI Group’s Sustainability
Supplier Interview (2)E SG

Overseas Sites / Own Factories
This supplier manufactures NITORI Group’s sofas, ofﬁce chairs, andseating, and has had a business relationship since 2004. NITORI Groupestablished a specialized technical support team for this supplier in 2016
and provided monthly on-site guidance (compensated technical support)
until 2019.

Please tell us how your company has grown through the relationship with NITORI Group.

Local employees overseas
NITORI Group has 93 stores, 12 ofﬁces, and 3 own factories overseas, with approximately 13,000 local employees working there(*as of February 2022). These local employees are working at NITORI Group’s overseas operations that not only support a stablesupply of products but also contribute to the enrichment of lifestyles in the countries where they operate. Having stores, our own
factories overseas, etc., we create local employment and contribute to the development of local communities.

We have achieved rapid growth through our relationship with NITORI. From 2010 to 2017, the scale of our manufacturing facilities
increased approximately ﬁvefold. In addition, operating revenue increased by approximately RMB 900 million over the same period,and in 2017 the company was able to list on the Shanghai Stock Exchange. We believe that the ﬁrst prerequisite for a sustainable
future is for the company to generate solid proﬁts. In 2020, we established our vision with a development strategy through to 2045.
We share this vision with NITORI, with the aim of further increasing sales and shipments. NITORI is a very important partner for us.

Eastern Asia

Approx. 2,150employees

U.S.

Approx.
50employees

What do you emphasize in manufacturing?
We emphasize providing our customers with the best quality, innovation in R&D, and improving production efﬁciency. In the ﬁeld,
our employees have a “customer ﬁrst” mindset and strive to identify and solve problems based on “customer needs.” Furthermore, aspart of initiatives to address environmental and social issues, we are promoting the use of certiﬁed timber and recycled resources.
We help reduce the use of ﬁnite resources such as oil and water. As a manufacturer, we regard such sustainability-related initiatives
as an important element of corporate responsibility, and we communicate its importance in our training programs for employees.

What were the beneﬁts of receiving compensated technical support? How did your company grow or change?
There have been many changes and much growth, including “qualitative improvement of planning management and ﬁeld
management,” “improvement of work processes,” “increased production efﬁciency,” and “visualization of KPIs.” It is apparent that
employees’ awareness of safety and security has been raised, leading to fewer accidents and injuries on site. Moreover, changes in
production and management systems directly lead to a reduction in production costs. A portion of the cost savings achieved throughefﬁciency improvements is used to increase employee salaries. This contributes to further enhancement of motivation.

How would you like to apply what your company gained through compensated technical support in the future?
As well as utilizing what we learned through NITORI’s compensated technical support in terms of technology and quality, we would
also like to utilize the “work ethic,” “responsibility as a manufacturer,” and “importance of innovation” that we learned in the course oftechnical support in our human resources development. We very much agree with what Chairperson Nitori stated in his book Five
Principles of Success, “We were able to succeed because we have a mission.” Our mission is to provide people with healthy andcomfortable lifestyles. Our mission shares values with NITORI Group’s mission. I sincerely hope that our company and NITORI willcontinue to grow together and that our partnership will flourish for many years to come.

Southeast Asia

Initiatives to address environmental issues

VietnamNITORI FURNITURE
Hanoi
NITORI FURNITURE
Ba Ria-Vung Tau

Thailand

Compensated technical support

47

Approx. 13,000employees

Initiatives of our own factories overseas to address environmental and social issues

SIAM NITORINITORI Group provides compensated technical support at suppliers’ manufacturing sites
in order to create better products together with suppliers. In addition to guidance on
establishing a traceability system through visualization of in-process jig and tool
management and modular production (zero intermediate inventory), training and lectures
are provided by instructors with practical experience in world-class methods andtechnologies. We will work together with our suppliers to improve quality and develop
human resources. Through tours that NITORI Group organizes in which representativesof suppliers visit the factories of outstanding suppliers, we create a learning environment
and foster improvement in manufacturing technology throughout the supply chain.

Total number of local employees overseas:

Approx. 10,800employees●Effective use of scraps (timber, urethane, fabric)●Manufacturing of “easy-to-sort” pocket coil mattresses that areeasy to disassemble for disposal
P36●Contribution to energy saving through manufacturing of N Cool
products
P35●Manufacturing carpets and rugs from recycled plastic
bottles
P33●Manufacturing carpets and rugs using waterless coloringprocess
P38●Use of plastic bags made of recycled materials (for productpackaging)

Initiatives to address social issues(comfortable workplace / benefits)●Factory cafeterias (Free meals are served.)●Dormitory (free of charge, to support employees who otherwise need tocommute long distances.)●Creation of a safe and secure work environment*Monitoring of safety management (for prevention of accidents, etc.),
attendance management (securing of breaks), etc.
●Widely recruiting and actively hiring Vietnamese who used to work in Japan(including those who can speak Japanese and technical intern trainees)●Factory cafeterias (Free meals are served.)●Review of labor environment and education system

P38

Scrap timber

Assemble scraps and utilize
them as components

Scrap polyurethane from the
manufacturing process

Produce recycled polyurethane48

NITORI Group’s Sustainability

NITORI Group’s

E SG

Zero Carbon Challenge Cup

CSR Activities

NITORI Group has been supporting the Zero Carbon Challenge Cup since 2015. In
the main event, ﬁnalists from diverse organizations (schools, companies, local
governments, NPOs, etc.) and of all ages from around Japan present their activities
that are leading to the creation of a zero carbon society. The Zero Carbon Challenge
Cup is a venue for sharing and disseminating know-how and information on initiatives
and for facilitating further collaboration and motivation, all with the ultimate aim ofachieving a zero carbon society that delivers a prosperous future for everyone.
From among some 30 ﬁnalists, NITORI Group selects a winner of the NITORI Best
Dream for the Future Award. This award reflects our desire to join with others inbuilding a bright future, ﬁlled with dreams and hopes, through decarbonization
initiatives.

PolicyAiming to become a company that people will feel in need of, we implement a wide variety of local contribution activities, withparticular focus on “support for human resources,” “environmental support” and “cultural support,” to give back to all of the countries,
local communities, and society members that nurture and support NITORI Group.

Development of “Future IT Human
Resources”
Having concluded a partnership agreement with Hokkaido, Sapporo City,and Hokkaido University, NITORI Holdings is developing “Future IT Human
Resources” who can leverage the power of digital technology and data toresolve local issues and create a society of the future. We are promoting
initiatives so that Hokkaido, the place where NITORI was founded, will
generate many talented people who will forge the future, and so that thosepeople will generate vitality throughout the entire community by playing anactive role in the region, and moreover become a bridge to the world.
[Examples of initiatives]
IT human resources development for each level of education, including
elementary, junior high school, high school, university and graduate school
students●Hokkaido University “NITORI Future Society Design Course”-Invitation of public applications for research using data and assignments
provided by NITORI-Cutting-edge research making use of actual stores
Research outcomes are published in journals. Patent applications are ﬁled forcertain research outcomes.
●Research activities by high school students (Hokkaido Board of Education’s project)-NITORI offers insights into practical IT utilization through classes, etc.

LEARN with NITORISupporting sports
NITORI Group is committed to contributing to local communities and society by encouraging healthy and fulﬁlling lifestyles, both
physically and mentally, through various sports.
●NITORI Ladies Golf Tournament
We have been organizing a women’s professional golf tournament in Hokkaido since 2010 to vitalize Hokkaido through sports.
Moreover, we support female professional golfers. At present, NITORI has sponsorship agreements with nine players.
Relatedhttp://www.nitori-ladies.jp/●NITORI Women’s Running Team
Established in April 2015, the team began its activities with the ambition to
win medals in the Olympics. Since 2020, the team’s target has been to comewithin the top eight teams in the All Japan Industrial Teams Women’s Ekiden(relay race) in addition to training for marathons.
Related link: https://www.nitorihd.co.jp/nitorun/

Supporting human resources development / Supporting culture, arts, and tradition
The Research Center for Advanced Science and Technology of the University ofTokyo and NITORI Group jointly launched LEARN with NITORI, a new education
support project, in 2021. LEARN, a program giving children the opportunity to discover
the joy of learning while demonstrating their individuality through various activities andexperiences, is run by Senior Research Fellow Kenryu Nakamura of the Research on
Individually Optimal Learning as part of Corporate Sponsored Research Programs.
Making use of NITORI Group facilities as well as other facilities, NITORI Group
provides a “learning” program that only the Group can offer. 10 sessions of LEARN
with NITORI were held in eight cities in Japan in 2021, with 362 children participating.
Chairperson Akio Nitori, took part in the program and shared his own experiences in a
lecture and Q&A session, interacting with the children and their parents.
[Examples of programs]●“Glass art lovers, come and join us!” Nitori Museum of Art, OTARU ART BASE (Hokkaido)●“Scientific Investigation of the Secret of Cherries" NITORI Sightseeing Orchard (Hokkaido)●“What’s it like working part time? Let’s think about various things through working” NITORI store(Osaka)●“2 days to think about Japanese architecture, gardens, culture and history” Tairyu Sanso
NITORI Recreational House (Kyoto)●“How many of these sofas can be placed in a gymnasium?” Junior high schools (Hiroshima
Prefecture)

49

Related link: https://www.zenkoku-net.org/datsutanso/

NITORI Group is supporting the following two foundations.
●NITORI International Scholarship Foundation
The NITORI International Scholarship Foundation, launched in March 2005,
is a way of expressing our appreciation to people in Asian countries for theirtremendous support that is contributing so much to NITORI Group’s
accomplishment of its mission. So far, the foundation has supported a total of
7,999 students in 46 countries and regions by offering non-repayable beneﬁttype scholarships. In order to help foster friendships and human resources
development in countries around the world, the foundation will expand support
for the younger generation on whom the future depends.
Related link: https://www.nitori-shougakuzaidan.com/●NITORI Culture Foundation
The NITORI Culture Foundation was founded in April 2011, to support the development and succession of culture, arts, and tradition
and to be a bridge for the formation of a new culture. As the latest addition to OTARU ART BASE, a collection of museums in Otaru
City, Hokkaido, managed by the foundation, the House of Western Art opened in April 2022 in a historic building in Otaru.
Related link: http://www.nitori-bunkazaidan.com/

50

NITORI Group’s

NITORI Group’s Sustainability

E SG
SG

Governance

Executive compensation system

Basic Policy on Corporate Governance
NITORI Group places top priority on sustainable growth and the medium- to long- term improvement of corporate value in its
management. The Group believes that enhancing its corporate governance system is necessary for achieving these goals. To
enhance corporate governance, the Group aims to build an organizational structure to respond promptly to any changes in thebusiness environment, practice fair and transparent management as a listed company, and disclose accurate information to all
stakeholders in a timely manner. Meanwhile, the Group will develop an internal system to establish its corporate social responsibility
and corporate ethics.

Performance-based
compensation
31.8% *

Performance-based stockcompensation system(medium- to long-term incentives)

Performance-based
monetary compensation(short-term incentives)

Board of Directors’ effectiveness evaluation(1) Size and composition
3.78
4(2) Management(8) One’s own 3.75
statusefforts
3.5
3.67
3.63
3.25

Options
4. Appropriate
3. Acceptable
2. Insufficient
1. Needs
improvement

3(7) Response to
stakeholders
3.61

2.75
2.5

(6) Riskmanagement
3.52(3) Matters discussed
3.63(4) Support systems
3.65(5) Materials
3.59

In analyzing and evaluating the effectiveness of ﬁscal
2021 Board of Directors, we conﬁrmed the status of
improvements and progress of the issues identiﬁed in theeffectiveness evaluation conducted in the previous ﬁscal
year. Based on the questionnaire-style evaluation given byeach Director, individual interviews were conducted. The
results were reported to and discussed by the Board of
Directors to improve its functions.

Basiccompensation
68.2% *
*The ratio is based on a pay
structure where basic compensationaccounts for 75% and short-term
incentives 25%, and medium- tolong-term incentives are 10% of acumulative total of compensation for
the relevant two fiscal years.

Basic compensation

FY2020
FY2021

Initiatives in fiscal 2021

Ongoing issues

Expanding discussions onsustainability

Continuing discussions to appoint
female directors

Resolved issues

51

Compensation for non-executive directors, inprinciple, consists of fixed basic compensation.
Performance-based compensation as short-termor medium- to long-term incentive is not provided
for non-executive directors.

Evaluation categories of the questionnaire(1) Size and composition of theBoard of Directors(5) Materials for the Board of
Directors meetings(2) Management status of theBoard of Directors(6) Risk management(3) Matters discussed by the
Board of Directors(8) One’s own efforts

Target period of every two fiscal years[Ongoing issues] Issues concerning“enrichment of matters discussed”

Enrichment of information
provision to the Board of Directors

Expanding discussions onsustainability[ongoing issue since the previous
fiscal year]

Strengthening of support systems
for the Board of Directors bypromoting digital transformation(DX)[New issues] Issues concerning“improvement of support systems”

Achieved
Up to 200%

Met targets
100%

Priority issues for fiscal 2022 Board of Directors

Deepening discussions on
medium- to long-term issues of
NITORI Group[ongoing issue since the previous
fiscal year]

Continue to hold the stock for three more years(7) Response to stakeholders

Strive to achieve the targets

Promoting delegation of theauthority to make decisions
regarding the execution of duties

Calculated based on the achievement of thetargets for the Company’s performance, suchas consolidated operating income, for eachfiscal year. Variable between 0% and 150% of
the standard amount for each executive
director.

Performance-based stock compensation system(4) Support systems for the Boardof Directors

Deepening discussions on
medium- to long-term issues of
NITORI GroupCalculated based on the achievement of thetargets for the Company’s performance, suchas consolidated net income, for the target
period of every two fiscal years. Variable
between 0% and 200% of the basic amountof stock granted to each executive director.

Not achieved
Down to 0%

Encourage further efforts toincrease stock price (corporate value)(1) Set numerical targets(2) Grant common shares

Performance Share Unit

Restrictions on transfer
after delivery

To strengthen the link between thecompensation structure and medium- tolong-term increase in corporate value,
the Company has adopted aperformance-based compensation
system (Performance Share Unit) inwhich compensation is provided inaccordance with the achievement ofconsolidated performance targets forevery two fiscal years.

To promote medium- to long-term profit
sharing with shareholders, theCompany’s shareholding guidelines set
forth that a three-year restriction shallbe imposed on the transfer of stock
granted as performance-based stockcompensation.

Clawback provisions
The Company’s shareholding guidelines
set forth that the Company may request
an eligible director to return the
incentives (clawback) if misconduct orillegal conduct causes a material breachregarding financial reports.

52

NITORI Group’s Sustainability

NITORI Group’s

E SG
SG

Discussion with Female Directors

In this dialogue, Outside Director Naoko Yoshizawa and Director Hiromi Abiko, who took office lastyear as the first female directors of NITORI Holdings, discuss the work of the NITORI Holdings Boardof Directors, sustainable growth of NITORI Group, and women’s active participation.
*Masks were removed only when photographs were taken.

It’s been one year since your appointment
as directors of NITORI Holdings. At theoutset, please share your frank opinions
and impressions of the Board of Directors.
Yoshizawa: To start with the fundamentals, frankly
speaking, my impression is that essential and important
discussions on management are taking place. I believe thatthe board meetings are almost ideal, with outside directors
actively expressing their opinions and executive directors
sincerely responding to those opinions. On the other hand, I
would like to hear more opinions from the inside directors.
Even though there has been sufﬁcient internal discussion,
not all proposals are submitted to the Board of Directors
unanimously. I would also be interested to hear the
dissenting voices. Taking human resources development as
an example, I would like to hear the opinions of directors
other than the director responsible for human resources
development. I believe that bidirectional exchange of
opinions between outside and inside directors will further
stimulate discussion at Board meetings. Nevertheless, as I
mentioned at the beginning, I believe that our Board of
Directors engages in in-depth discussion from theperspective of how best to keep the company moving in theright direction. I feel this is why NITORI has achieved 35

consecutive years of sales and proﬁt growth. Over andabove that, NITORI is oriented toward further advancement,
eager to identify what should be the focus of our efforts.
Abiko: On becoming a director, I soon appreciated thevantage point from which directors do their work. My efforts
to attain a similar perspective have enabled me to broaden
my horizon considerably. In addition, I always learn from theoutside directors whose views have developed in the courseof careers not only in management but also as professionals
in specialist ﬁelds. We, inside directors, always discuss
themes such as the cost-effectiveness of new businesses
and store openings. Outside directors are more focused on
fundamental issues. Their questions and opinions tend toreflect a medium- to long-term perspective, such as the kindof company NITORI should strive to be and how we canmost effectively contribute to the community. I think this is allvery positive for NITORI. Through fruitful exchanges withoutside directors, I became aware that excessive
preoccupation with short-term tasks can impede our ability
to grapple with fundamental issues. In fact, I take notes on
every question asked by outside directors. I have been trying
to write down every single word and I am already on my ﬁfth
notebook. It’s been a year of great change for me. I am
grateful.

What is the perspective informing yourcontributions at Board meetings? Is there
anything in particular that you keep inmind?
Yoshizawa: I believe that the proposals explained at Board
meetings have already been fully discussed internally fromthe company’s perspective. So, as much as possible, I lookat them with a critical eye. For example, I try to comment
from the diverse perspectives of stakeholders such as
customers, employees, investors, and shareholders. I am
not especially conscious of adopting a female perspective.
But the perspectives of female customers and employees
are naturally woven into my opinions, which I hope will leadto insights during discussion. When the topic of N+ apparelﬁrst came up at a Board meeting, my knowledge of N+ was
sketchy. But I am among the main target customers of N+.
So, if I don’t know much about N+, it means there is a needto strengthen the marketing of N+. I was able to naturally
point out an issue from a woman’s perspective.
Abiko: Likewise, I am not particularly conscious of being awoman when expressing my opinions. Among the membersof the Board of Directors, I see myself as someone whoshares the viewpoints of customers and employees. I try to
imagine their lifestyles and if I feel something isn’t right froma commonsensical point of view, I don’t hesitate to say so.
When we discuss business and how to make a proﬁt, I liketo express my views from a different perspective, looking atthings as if I were a customer or an employee.

Group can accurately communicate what kind of synergies it
wants to achieve through M&A or when forming alliances.
This is great.
Abiko: On the issue of sustainable growth, I think the SDGs
merit the most serious attention. This view partly reflects myresponsibility for the promotion of the SDGs. Since we
handle furniture, the setting of standards for timber
procurement, treatment of collected post-use furniture, andvarious other matters are important issues for us.
Nevertheless, I believe the development of recyclingoriented products can be a source of strength for NITORI,
enabling us to make a valuable contribution to society. The
problem is that initial costs are high, but we hope to apply
NITORI’s signature approach to the SDGs—start small,accumulate results, and then expand rapidly.
Yoshizawa: Revision of the Corporate Governance Codelast year has transformed sustainability issues, previously
viewed simply as risks, into major management issues thatshould be addressed as proﬁt opportunities. This is alreadyhappening at NITORI. For example, last year NITORI
developed easy-to-sort pocket coil mattresses, which not
only alleviated risk related to sustainability issues but also
led to a proﬁt opportunity because of the launch of productswith features attractive to consumers. I feel that NITORI
should do more to publicize such initiatives.

In terms of NITORI Group’s sustainablegrowth, what do you think is the biggest
challenge?
Yoshizawa: I believe business expansion strategies such as
M&A will become essential for sustainable growth. And to
make M&A successful, we need to think speciﬁcally about
how to achieve synergies. How should we proceed withintegration in terms of not only product strategy but also
manufacturing, logistics, and IT systems? I have heard ofcases where the attempt to integrate different IT systems
ended up costing more than the acquisition itself, and theacquisition eventually failed. It’s important to detect suchproblems in advance while still being able to achievesynergies. You ask about challenges and this may not be
one, but what I ﬁnd most impressive about NITORI Group isthat it has a clear mission and vision that are unwaveringand quantiﬁable. Since its stance is crystal clear, NITORI

Naoko Yoshizawa
Outside Director

53

54

NITORI Group’s Sustainability

Hiromi Abiko
Director

In promoting digital transformation (DX)from now on, what are the challenges for
NITORI Group?
Yoshizawa: My impression is that NITORI Group is taking
action in terms of mechanisms to promote DX, such as byestablishing a new company to secure IT professionals. I
feel that we should deepen the discussion on the substanceof the issue. DX refers to a thoroughgoing transformationthat fundamentally changes the entire business. In fact, I
think NITORI has achieved transformations of this order
several times in the past. Whether digital or not, NITORI has
implemented these transformations. At present, I feel that
we are at the stage of discussing the introduction of
mechanisms to realize the goals of the medium- to long-term
strategies. If we consider these medium- to long-term
strategies synonymous with NITORI’s transformation, then I
believe the discussion on NITORI’s DX is moving in the right
direction. However, while NITORI is vigorously tackling DX, it
is not publicizing its DX initiatives to the world. It is similar tothe situation concerning NITORI’s SDG initiatives. I get the
impression that NITORI has yet to clearly communicate its
DX strategy. I think that NITORI should publicize its DX
strategy by emphasizing the speciﬁc value it intends tocreate through the achievement of medium- to long-term
strategies by capitalizing on digital technology.

What challenges do you see for NITORIGroup’s human resources development?
Abiko: A source of dissatisfaction and anxiety for
employees, especially the younger generation, people intheir 20s and 30s, is the lack of a clear view as to where
their careers are headed. On the other hand, they think about
where they want to be in 10 years and are eager to make55

NITORI Group’s

E SG
SG

efforts to approach their goals. Recognizing their aspirations,
I would like to put in place an educational system that will
help them achieve their goals. I am in charge of educationcommon to the entire company, mass education in otherwords. I am endeavoring to clarify possible career paths interms of how employees who have received mass education
apply their skills in specialized roles at departments and link
their experience to the achievement of their career goals. I
would like to show our employees concrete career options bycreating career role models. What kind of systems will our
employees create who have received mass education andadvanced into specialized ﬁelds? I want our employees to beable to create systems that change the way we work at thefrontline, reducing their burden, making work more enjoyable,
and facilitating problem-solving through an initiative at thefrontline. Education does not end with deciding on thecontent of training, gathering participants, and conducting thetraining. We need to envision how employees who havereceived training will make use of what they have learned
through the training when they return to their jobs on thefrontline. It is a difﬁcult aspect of human resources
development.
Yoshizawa: In order to grow, people have to step out of their
comfort zones. The company needs to cultivate anenvironment that encourages them to do so. Let me mention
a training program that was a turning point in my career. In
this program, which lasted about 10 months, as a trainee, I
was allowed to go anywhere in the world to any number ofplaces to collect data to achieve the strategic goal I had set
myself. It was up to me where I went. To talk to people, suchas people of other companies or executives of competitors, I
made appointments through a network of contacts that
extended to very distant acquaintances. Until then, I had
never had the opportunity to do such a thing, never thoughtof doing it, and never felt the need to do so in the ﬁrst place.
But when I actually did it, it was so exciting. I thought it would
be difﬁcult to make appointments because they were not for
actual business meetings, but surprisingly, I was able to
make appointments. Companies overseas have training
programs of this nature and they are accustomed to suchthings. I discovered so much and was so inspired by theexperience. For example, I was fascinated by the different
perspectives of people on the other side of the world. Most
importantly, I realized that I enjoyed talking to people far
beyond the conﬁnes of my own company. I think it would be
beneﬁcial for NITORI Group to offer educational programs
that inspire employees.

What are your thoughts on women
playing more active roles?
Yoshizawa: I think there are two aspects to the promotion of
women’s participation and advancement in workplaces. Oneis from the women’s perspective and the other is from theorganizational perspective. From the women’s perspective,
the ﬁrst step is for individual women to gain conﬁdence. Thisis the heart of the matter. Secondly, if there are issues thatprevent individual women from playing active roles, such as
childcare or nursing care, the obstacles should be removed.
On the other hand, from the organizational perspective, it isnecessary to think about the treatment of men, who
obviously are outside the scope of women’s empowerment.
Promoting the advancement of women can create
psychological tensions among men. They may think, “Whyonly women?” Next, the values and attitudes of supervisors
are important. This is of course also true for male
employees, but without a boss who gives women
opportunities to demonstrate their capabilities, there will be
no catalyst propelling them to play active roles. Lastly, weneed mechanisms and systems that support women in theirefforts to play active roles. But ﬁrstly, over and above
everything else, women should be encouraged to gain
conﬁdence. The key is how to do that. Clearly, it meansoffering women opportunities to take on challenges andsupporting them in the workplace so that they persevere andsucceed. I believe that the only way to gain conﬁdence is toexperience success. I think the key is to cultivate anenvironment and a culture that encourage women andsupport them so that they can experience success.
Abiko: I agree. Regardless of gender, successful
experiences on the job lead to personal growth. We canfacilitate personal growth by providing equal opportunities
regardless of gender and in the way we design and allocate
tasks and in the metrics used to evaluate performance.
Unfortunately, in Japan, women’s lives change drasticallyfrom the moment they have children. However, much theywant to continue pursuing personal growth, there will
inevitably come a point where they have to put their desire to
one side. That is why companies, instead of expecting 120%

results all the time, need to be patient and understand thatwomen are, at least for a while, at a disadvantage. During
the past year or so, NITORI has been deliberating on
workstyle reform for women, based on the recognition that it
is important to have workstyle options corresponding to eachstage of a woman’s life. We eventually concluded that weneed to reform how both men and women work. We are inan era in which it is necessary to reform not only women’s
workstyles but also men’s so that both men and women canenrich their lifestyles and enjoy a good life-work balance. We
need to consider approaches and systems that would
enhance operational efﬁciency in various aspects so thateveryone can make better use of their time. I would love to
see more men take childcare leave as well. NITORI is acompany dealing with interior products. So, involvement inchildcare at home would inspire men to come up with ideas
for great products. That would be wonderful.

What’s your message for women whowant to advance their careers
Yoshizawa: It is often said that women do not have manyrole models, but perhaps we don’t need to be too concerned
about role models, which necessarily differ from one person
to another. To reiterate, you need to step outside yourcomfort zone. Look beyond the group of people with whom
you usually spend your time. Talk with people in othersections. Don’t stay within the borders of the company. Seek
opportunities to interact with people in other walks of life or
who work for competitors. If you are in Japan, talk to people
overseas. Go out into the big wide world, talk to all sorts ofpeople, broaden your horizons, expand your network, andtake on new challenges. I think your personal development
will surprise you. As directors, we relish the opportunity tocontribute to the creation of a culture, a climate, and systems
at NITORI that will encourage you to take on new
challenges.
Abiko: I would like to issue a rousing call to action. Since
you only live once, you should enjoy not only your career but
also your private life, including time with your family, as muchas you possibly can. Follow your inclination and have fun!

56

NITORI Group’s

NITORI Group’s Sustainability

Directors and Executive Officers

E SG
SG
The Aspirations of Newly Appointed Directors(As of May 19, 2022)

Directors
Akio Nitori

Toshiyuki Shirai

Fumihiro Sudo

Representative Director &Chairperson (CEO)

Representative Director &President (COO)

Director, Executive Officer &Vice President

Fumiaki Matsumoto

Masanori Takeda

Hiromi Abiko

Director, Executive Officer &Vice President

Director
General Manager of Global
Merchandising Division
General Manager of Global
Sales Promotion Office
In charge of Overseas Sales
Business

Director
General Manager of HR
Education Division

Takaaki Okano

Takao Kubo

Director

Director

Director*Independent Outside
Director
Member of Audit &Supervisory
Committee

Yoshihiko Miyauchi
Director* Independent Outside Director

Yoshiyuki Izawa

Hisayoshi Ando

Director* Independent Outside Director

Director* Independent Outside Director

Member of Audit &Supervisory Committee

Member of Audit &Supervisory Committee

Naoko Yoshizawa
Director* Independent Outside Director

Executive Officers
Executive Vice Presidents
Fumihiro Sudo /Fumiaki Matsumoto

Managing Executive Officers
Mitsuru Ohki / Naoshi Takei /Manabu Nakamura /Hiroshi Nagai /Kazuyuki Hashimoto /Junichi Yoshima

57

I am delighted to have this opportunity to serve NITORI Holdings as an outside director. For more than 30 years, I was
involved in the planning, formulation, and implementation of important national policies at the Ministry of Economy, Trade andIndustry (the former Ministry of International Trade and Industry). From 2019 to last year, I served as the Vice-Minister of
Economy, Trade and Industry and contributed to Japan’s economic and industrial development. In the course of promoting
numerous measures, I have gained experience and deepened my knowledge, especially with regard to energy issues andmeasures for small and medium-sized enterprises. Although I have never been involved in corporate management as amanager, by capitalizing on my experience and the knowledge I have gained so far, I wish to contribute to NITORI Holdings as
an outside director in its efforts to resolve issues confronting society, such as climate change and the need for regional
revitalization. As a member of the Board of Directors, I will do my utmost to contribute to the sustainable enhancement of
NITORI Group’s corporate value. I look forward to serving NITORI Holdings.

Skills Matrix

Independent Outside Directors

Director* Independent Outside Director

Director*Independent Outside
Director
Member of Audit &Supervisory
Committee

Hisayoshi
AndoMember of Audit &Supervisory Committee(Full-time)

Sadayuki Sakakibara

Yoshiyuki
Izawa

I am very pleased to have recently assumed the position of outside director at NITORI Holdings. In my early career at Mitsui& Co., I gained experience and learned many of the basics of business. Having spent 11 years in the U.S. and Europe as an
expatriate, I deepened my hands-on experience as a global businessperson. In particular, as a Representative Director,
Executive Vice President, I served as Chairman of the Investment and Loan Committee and deliberated and made decisions
on various matters. This experience enabled me to develop my ability to make decisions and execute them. I also served aspresident of JAPAN POST BANK for ﬁve and a half years during the period shortly after the privatization of Japan Post. I
strove to change the system, organization, and mindset of JAPAN POST BANK, which were very bureaucratic, to those of a
private company so that JAPAN POST BANK could constantly generate proﬁts as a commercial bank. I gained valuable
experience as an executive. Subsequently, I spent seven years as the head of BlackRock Japan, the world's largest asset
management company and investor and gained experience and knowledge of the behavior of global companies and how
institutional investors see things. I have developed my experience and knowledge about the mentality of global companies andthe perspectives of investors. In serving as a member of the Board of Directors, I would like to utilize the experience andknowledge I have gained at these three companies. I look forward to serving the NITORI Holdings.

Senior Executive Officers

Isao Arai / Tsuyoshi Okamura /Hiroki Murabayashi /Yoshihisa Sato / Kenichiro Aoya

Executive Officers

Tadashi Kudo / Soichi Oda /Akio Igarashi / Eri Ablet /Toshinao Matsushima / Ei Sugiura / Harumi Sawai /Akihiro Kushida /Koichiro Oshima / Tadahiro Hosokawa /Kazuya Orimoto / Toshinori Arai / Masaomi Zenji /Kazuya Tsukada

Of the skills, etc. held by each Director, maximum of seven main skills are marked with ●.
Knowledge and experience the Company expects of Directors
Name

Title

Independent

Nominating andCompensation
Committee

Corporate
Management
Management
Strategy

Product Development
Coordination(Chairperson)

●

●

●

●

Akio Nitori

Representative
Director & Chairperson(CEO)Toshiyuki
Shirai

Representative
Representative Director& President (COO)●●

Fumihiro
Sudo

Director
Executive Officer &Vice President●●

FumiakiMatsumoto

Representative Director& Chairperson (CEO)●Masanori
TakedaDirector●

HiromiAbiko

Director

TakaakiOkano

Director

Sadayuki
Sakakibara

Outside Director●●

Yoshihiko
MiyauchiOutside Director

●

●

Naoko
Yoshizawa

Outside Director●

Takao Kubo

Director
Full-time Member ofAudit & Supervisory
Committee

Yoshiyuki
Izawa

Outside Director
Member of Audit &Supervisory Committee●●

Hisayoshi
AndoOutside Director
Member of Audit &Supervisory Committee●●

Production
Quality Control

Logistics & Trading
Procurement

DX Promotion
IT & Information
Communications

●

●

●

●

●

●

●

●

●

●
●

●

Rejecting Status
Quo
Organization & HR
Changes &HR Development
Challenges

●

●

●

●

●
●

●

●

●

●

●
●
●

Finance &Accounting
TaxationInternal Control
Governance

Sustainability
SDGs

●
●
●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●
●

●

Legal Affairs
Risk Management

●

●

●

●

Macroeconomic &Overseas Business
International
Strategy
Situation●●●

Sales PlanningStore-opening
Policy

●

●

●

●

●

●

●
●

●

●

●

●

●

●

●

58

Sustainability Data BookNITORI Group’s Sustainability

Environment
Amount of waste from NITORI Group’s domestic operations

Greenhouse gas emissions from NITORI Group•Interim target: 50% reduction in FY2030 compared with FY2013 (emissions per 100 million yen of net sales)•Progress in FY2021: 10.8% reduction compared with FY2013 (emissions per 100 million yen of net sales: 33.60 t-CO2)

Greenhouse gas emissions

Unit

FY2018FY2019FY2020

FY2021NITORI Group

t-CO2

245,664

247,680

263,371

243,306

Japan

t-CO2

56,90056,59164,86332,517

Overseas

t-CO2

3,780

2,783

2,102

2,783

Japan

t-CO2

151,347

149,736

154,000

159,577

t-CO2

33,637

38,57042,40648,428t-CO2 per
100 million yen

32.56

31.41

30.26

29.98

Scope 1

•Target (1): FY2030 Amount of waste discharged (general waste and industrial waste)
30% reduction compared with FY2018(Amount of waste per 100 million yen of net sales in Japan)•Target (2): FY2030 At least 95% recycling of industrial waste•Progress in FY2021: Target (1) 20.7% reduction compared with FY2018 (Amount of waste per 100 million yen of net
sales: 7.6 t)

Unit

FY2018FY2019FY2020

FY2021

t

103,061

106,686

107,826

94,194t

47,09048,06349,85946,665

Total amount of general waste andindustrial wastet

55,971

58,62357,96647,529General waste

t

4,110

4,213

4,139

4,333

*SHIMACHU’s results are reflected from FY2021. (Results before management integration are also retrospectively reflected.)Industrial wastet

51,86054,41053,82743,195*Results of overseas operations are reflected from FY2021. (Retrospectively reflected)*Errors in gas types (city gas, LPG, LNG) are corrected in FY2021.

*Simple incineration andlandfill disposal

t

-

-

-

5,010

*NITORI Group’s greenhouse gas emissions: Total of Scope 1 + Scope 2 emissions (including overseas operations)*Recycling rate

%

-

-

-

88.4

General waste and industrial
waste per unitt per 100
million yen

7.60

7.62

6.81

6.03

Scope 2

Overseas

per unit

Amount of waste discharged
NITORI Group
Waste with value and other*Japan: Stores (NITORI, Deco Home, N+, SHIMACHU, Everyone’s Grill), Home Logistics, Head Office and Headquarters (Sapporo, Tokyo, Osaka,
Omiya), and HOME DECO*Overseas: Stores (Eastern Asia, USA), Offices (NTI, NTL), warehouses, and factories (NITORI FURNITURE, SIAM NITORI)*Greenhouse gas emissions associated with electricity consumption in Japan are calculated using the adjusted emission factor for each electric utility
as stipulated in the Act on Promotion of Global Warming Countermeasures.
*Greenhouse gas emissions in FY2021 from overseas electricity use are calculated using the latest (2019) emission factors for each country in IEA
Emission Factors 2021 published by the International Energy Agency (IEA).
*Conversion figures for gas and fuels are calculated using the Ministry of the Environment's “List of Calculation Methods and Emission Factors for theGreenhouse Gas Emissions Accounting, Reporting, and Disclosure System.”*Japan: Stores (NITORI, Deco Home, N+, SHIMACHU, Everyone’s Grill), Home Logistics, Head Office and Headquarters (Sapporo, Tokyo, Osaka,
Omiya), and HOME DECO
*Waste for which the Company is a waste generator is covered.
*Industrial waste includes mixed waste including sofas, chests of drawers, cabinets, etc., waste plastics, and Styrofoam.
*Waste with value and other includes corrugated cardboard, metals (with value), mixed paper, etc. Corrugated cardboard is 100% recycled.

Energy use (gas, kerosene, gasoline, diesel oil, and electricity) by NITORI Group
Energy use
NITORI Group
Japan

Unit

FY2018FY2019FY2020

FY2021(Crude oil equivalent)

TJ

4,692.5

4,742.1

5,088.9

4,615.6(Crude oil equivalent)

TJ

3,951.5

3,986.3

4,321.5

3,729.3

Electricity

Mwh

303,004

307,138

327,597

314,627

1,000

11,750

11,58313,063

10,495Gasoline / diesel oil

kℓ

575

588

552

523

Fuel oil (kerosene,
etc.)

kℓ

139

170

211

205

TJ

741.0

755.8

767.4

886.3

TJ per 100
million yen

0.62

0.60

0.58

0.57

Gas

Overseas (Crude oil equivalent)

per unit* SHIMACHU’s results are reflected from FY2021. (Results before management integration are also retrospectively reflected.)(Crude oil equivalent)

Amount of water used
Unit

Amount of water used
NITORI GroupJapan
Overseas*Japan: Stores (NITORI, Deco Home, N+, SHIMACHU, Everyone’s Grill), Home Logistics, Head Office and Headquarters (Sapporo, Tokyo, Osaka,
Omiya), and HOME DECO

per unit/per 100
million yen

FY2019FY2020

FY2021

1,369,647

1,341,571

1,399,167

911,642923,444857,824

458,005

418,127

541,343173.67154.13172.40*Disclosed from FY2021*SHIMACHU’s results are reflected from FY2021. (Results before management integration are also retrospectively reflected.)*Results of overseas operations are reflected from FY2021. (Retrospectively reflected)*Overseas: Stores (Eastern Asia, USA), Offices (NTI, NTL), warehouses, and factories (NITORI FURNITURE, SIAM NITORI)*SHIMACHU’s results are reflected from FY2021. (Results before management integration are also retrospectively reflected.)*Results of overseas operations are reflected from FY2021. (Retrospectively reflected)

59

60

NITORI Group’s Sustainability

Sustainability Data Book

Status of Performance of Audits of New Overseas Suppliers (*Including quality assurance
items and response to environmental and social issues)

SocialNumber of audits
performed
FY2021

Employee data

Composition

FY2021
Total number of employees

37,229Number of regular employees

18,984

Number of non-regular employees*Annual average (calculated on the basis that one day iseight hours)

18,245

Target scope

NITORI Group as a whole

Diversity & Inclusion
FY2021
Percentage of female employees (%)

65.3

Number of new graduates hired

635

Percentage of female new graduates hired

47.7

Percentage of employment of persons with disabilities (%)

2.75

Number of women in management positions

394

Percentage of women in management positions (%)

15.0

Number of non-Japanese nationals in management positions

41

Number of employees taking childcare leave

162

Number of male employees taking childcare leave

43

Number of employees taking spousal maternity leave

78

Number of employees taking nursing care leave

16

Number of employees working shorter working hours(pregnancy, childcare, nursing care)

275

Average days of paid leave taken

9.8

Average percentage of paid leave taken

58.8

Average overtime hours (hours per month)

11.42

Target scope
NITORI Holdings, NITORI, Home Logistics,
Nitori Facility, N+, and SHIMACHU

Average hours of education per employee

50.7

Average days of education per employee

6.3

61

12.1%

76.8%

11.1%

●Pollution prevention measures (including compliance with laws and regulations concerning air, water, and soil pollution)●Compliance with laws and regulations concerning the disposal of hazardous substances ●Promotion of resource recycling●Periodic implementation of safety training stipulated by laws and regulations ●Installation of fire extinguishing equipment●Implementation of training for handling hazardous materials ●Safety measures for hazardous work
●Emergency response system in the event of accidents ●Improvement of working environment ●Overtime hours within specified hours/payment ofovertime as stipulated by laws and regulations ●Installation, maintenance, and management of cafeteria/restroom facilities ●Ensuring leave/breaks
exceeding legal requirements ●Ensuring minimum wages stipulated by laws and regulations ●Participation in legally mandated benefit schemes●Establishment of labor union●Prohibition of child labor/forced labor/discrimination ●Status of environmental and labor certifications

Status of Performance of Audits of Existing Overseas Suppliers
FY2019FY2019FY2019

545

426

590

Briefing content

Countries covered

Number of Number ofsuppliers
participating suppliers

Participation
rate

Apr. 2021

Management policy briefing for
suppliers

Vietnam, Thailand, Malaysia,
Indonesia, India, and Bangladesh

104

104

100%

Jun. 2021

Quality meeting for suppliers

Eastern Asia

294

322

91%

Jul. 2021

Management policy briefing for
suppliers

Eastern Asia

402

438

92%

Nov. 2021

Quality meeting for suppliersVietnam, Thailand, Malaysia,
Indonesia, India, and Bangladesh

86

88

98%

Jan. 2022

Quality meeting for suppliers

Eastern Asia

284

305

93%

*Attended mainly by management executives of each supplier

Target scope
Full-time employees only of NITORI Holdings,
NITORI, Home Logistics, Nitori Facility, N+,
and SHIMACHU

GovernanceCorporate Governance Information: NITORI Holdings website > Investor Relations > Corporate Governance > Basic Policy > Corporate
governance report

Anti-corruption Policy: NITORI Holdings website > Investor Relations > Compliance > Anti-corruption Policy

1,656
420

FY2019Frequency rate of lost time injuries (%) *Absence fromwork for 4 days or more

100.0%

Audit items for potential new overseas suppliers (*excerpts)

Date

FY2021
Number of staff trained in health and safety standards
during the previous year

11

Number of audits performed

Occupational Health & Safety

Number of qualified health managers

76

NITORI Holdings, NITORI, Home Logistics,
Nitori Facility, N+, and SHIMACHU

FY2021
348,508

12

Number of audits performed

Human Resources Development

Total training hours

Rejected (notransactions permitted)

Accepted withconditions

99

Full-time employees of NITORI, Home
Logistics, Nitori Public, and SHIMACHU

Full-time employees of NITORI Holdings,
NITORI, Home Logistics, Nitori Facility, N+,
and SHIMACHU

Accepted

2.10

Target scope
Global Tax Policy: NITORI Holdings website > Investor Relations > Compliance > Global Tax Policy

NITORI Holdings, NITORI, Home Logistics,
Nitori Facility, N+, and SHIMACHU

FY20202.20

FY2021
2.65

External Evaluation

Target scope
NITORI Holdings, NITORI,Home Logistics, Nitori
Facility, N+, andSHIMACHU

The Company has been selected forinclusion in the FTSE Blossom Japan
Sector Relative Index, an investment
index composed of Japanesecompanies that excel in ESG(Environmental, Social andGovernance) initiatives.

The Company received
an “A” rating in the
MSCI ESG Rating
Assessment as ofDecember 2021.
62Financial & Company Data -Transition of Key Management Indicators
Fiscal years ended February 20(Million yen)(Thousand USD)FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2021¥ 348,789¥ 387,605¥ 417,285¥ 458,140¥ 512,958¥ 572,060¥ 608,131¥ 642,273¥ 716,900¥ 811,581$ 7,059,684

Gross profit

192,616

201,656

218,337

243,543

278,274

314,778

331,421354,364

411,791

425,897

3,704,743

Selling, general and administrative expenses

131,066

138,583

152,029

170,503

192,497

221,400

230,642

246,886

274,104

287,6272,501,976

Operating income

61,55063,073

66,30773,03985,776

93,378100,779

107,478

137,687

138,270

1,202,766

Ordinary income

62,19563,47467,92975,00787,563

94,860103,053

109,522

138,426

141,847

1,233,884

Net income attributable to owners of parent

35,811

38,42541,45046,96959,99964,21968,18071,395

92,11496,724

841,372

Cash flow from operating activities

41,98946,15452,92357,34377,93076,84081,664

99,337150,879

85,565744,308

Cash flows from investing activities(21,937)(32,376)(43,023)(35,899)(42,047)(82,751)(30,424)(44,486)(195,985)(119,980)(1,043,674)

Cash flows from financing activities(22,047)(10,540)(6,654)(9,943)(6,414)655(11,340)(13,862)

30,30917,729154,221

Cash and cash equivalents at the end of the year

16,816

21,17925,71336,794

66,03560,923100,053

140,791

125,487

127,076

1,105,394

Depreciation and amortization

8,227

8,850

8,921

9,398

10,406

11,357

12,311

14,57516,024

20,407

177,518

Capital expenditure

25,70830,08345,033

26,60542,82864,172

32,237

26,191

22,323

101,454882,517

Total assets

284,290

321,703404,793414,541

487,814550,507619,286

683,247

930,884

983,840

8,558,110

Net assets

209,764

247,898

310,531

330,968

394,778441,668

500,192

560,861

685,392

732,813

6,374,505

Equity209,125

247,099

309,413329,695

393,693

440,991

499,721560,571642,096

732,813

6,374,505

Gross profit to net sales ratio (%)

55.2

52.0

52.3

53.2

54.2

55.0

54.5

55.2

57.4

52.5

52.5

SG&A expenses to net sales ratio (%)

37.6

35.8

36.4

37.2

37.5

38.7

37.9

38.4

38.2

35.4

35.4

Operating income to net sales ratio (%)

17.6

16.3

15.9

15.9

16.7

16.3

16.6

16.7

19.2

17.0

17.0

Rate of return on equity (ROE) (%)

18.7

16.8

14.9

14.7

16.6

15.4

14.5

13.5

15.3

14.1

14.1

Equity ratio (%)

73.6

76.8

76.4

79.5

80.7

80.1

80.7

82.0

69.3

74.5

74.5

Ordinary income to total assets ratio (ROA) (%)

22.6

20.9

18.7

18.3

19.4

18.3

17.6

16.8

17.2

14.8

14.8

Payout ratio (consolidated) (%)

13.8

14.3

14.6

15.3

15.2

16.0

16.0

17.0

15.1

16.3

16.3

Price earnings ratio (PER)

10.6

13.3

20.2

19.4

22.7

30.7

23.1

26.1

25.7

19.1

19.1

Net income per share (EPS) (Yen, USD)

325.83350.27376.14425.10540.93574.49608.05635.42817.01856.71

7.45

Net assets per share (BPS) (Yen, USD)

1,906.91

2,248.80

2,806.99

2,981.27

3,530.51

3,938.89

4,452.99

4,984.29

5,691.11

6,489.57

56.45

45

50

55

65

82

92

97

108

123

140

1.22

57,221,748

57,221,748

114,443,496

114,443,496

114,443,496

114,443,496

114,443,496

114,443,496

114,443,496

114,443,496

114,443,496

6,890

9,340

7,600

8,260

12,25017,625

14,05016,56020,97016,350142.22394,258

534,451

869,771945,3031,401,933

2,017,067

1,607,931

1,895,184

2,399,880

1,871,151

16,276,541

Number of stores in Japan

286

312

346

383

428

467

505

545

651

708

708

Number of stores overseas

14

19

27

37

43

56

71

66

71

93

93

Net increase in number of stores

32

31

42

47

51

52

53

31

111

79

79

1,390,711

1,478,205

1,568,596

1,678,835

1,806,666

1,928,461

2,037,213

2,099,997

2,726,935

2,828,992

2,828,992

15,272

16,88419,092

20,75922,111

24,81627,50629,936

36,66937,22937,229

Income/Loss
Net sales

Financial Position

Key Management Indicators

Per Share Information

Dividend per share (Yen, USD)

Other Data
Number of shares issued at the end of the year
Stock price at the end of the year (Yen, USD)
Total market value

Total sales floor area ( )Total number of employees(Notes)1. The Company conducted a two-for-one stock split of its common shares effective February 21, 2014. The above per share information is calculated
under the assumption that the stock split was conducted at the beginning of FY2011.
2. Translation into US dollars has been made at the exchange rate of 1 USD to 114.96 yen.
3. The total number of employees includes the aver-age number of temporary employees (calculated on the basis that one day is eight hours).

63

64

Financial & Company Data -NITORI Group’s Financial Strategy

Building and maintaining astrong financial base will
support sustainable corporate
growth and value enhancement

for ﬁscal 2021 were 811.5 billion yen and 141.8 billion yen,respectively, marking the 35th consecutive year of growthin both sales and proﬁt. Compared with ﬁscal 1991, whichwas 30 years ago, we have 38-times more stores, our net

sales are 46-times higher, and our ordinary income is
118-times higher. I believe that we were able to achievethese results by taking on various challenges since ourfounding and establishing a business model that integrates
manufacturing, distribution, IT, and retail.

Net sales and year-on-year change

Number of stores as of the end of fiscal 2021
in Japan and overseas（億円）

Net sales (Billions of yen)

111.5

106.3

Year-on-year change (%)

105.6

111.6

113.2

(Stores)

93

811.5
716.9

572.0

608.1

642.2

801
708

Masaomi Zenji
Executive Officer
General Manager
Accounting & Finance Division

2

1

2018

Q

Uncertainty continued in fiscal 2021. Amid the COVID-19 pandemic, the “new normal”
way of life became established and the Tokyo Olympics were held without audience.
In these circumstances, NITORI achieved its 35th consecutive year of sales and profit
growth. What was the year like from the perspective of business management?

In ﬁscal 2021, the challenging business environment
persisted and the outlook remained unclear owing to theimpact of the COVID-19 pandemic, intensifying sales
competition across industries and business formats,soaring labor costs caused by labor shortages, and risinglogistics costs resulting from a global shortage ofcontainers and rising ocean freight rates.
Regarding the NITORI Business, the price reduction
campaign to support people’s daily lives, which we
implemented twice, was well received by our customers,
and sales were brisk during the campaign period.
However, existing store sales for ﬁscal 2021 were below
the previous year’s level. This was because repeateddeclarations of a state of emergency and quasi-state of
emergency required some stores to close and consumers
refrained from going out during the Olympic Games and it
was also a natural reaction following robust sales in theprevious year, which were boosted by demand associatedwith stay-at-home consumption.
In the e-commerce Business, efforts to broaden thecustomer base by responding to customer needs that real
stores alone cannot cover and to improve customer

65

convenience resulted in a 1.5% year-on-year increase insales, surpassing the previous year’s sales, which grewsigniﬁcantly owing to demand associated with stay-athome consumption.
For the SHIMACHU Business, we implemented various
Group-wide measures to achieve synergies, including
reviewing the range of products, developing private-brandproducts for home improvement merchandise, reducing
general expenses by integrating purchasing functions, andopening NITORI HOME’S Miyahara Store, an integrated
store of NITORI and SHIMACHU.
In terms of costs and expenses, the impact of theexchange rate on purchases due to the weakening of theaverage settlement rate by 7.21 yen against the dollar
compared to the previous year and higher import costs
due to high crude oil prices led to a signiﬁcant increase incosts. Meanwhile, we focused on cost reduction, such as
consolidation of suppliers, and also worked to curb
expenses by streamlining logistics to reduce shipping anddelivery costs and performing tasks in-house to reduce
outsourcing costs.
As a result, consolidated net sales and ordinary income

1856
Overseas

1. 35th consecutive year of sales and profit growth and review of fiscal 2021
(achievements and challenges)

22

2019

2020

2021

2022(FY)

90

Eastern
Asia
U.S.
Malaysia

140 Japan
472

NITORIDeco HomeSHIMACHUNITORI EXPRESSN+

2. Store opening plans for fiscal 2022 ending March 31, 2023 and consolidated results forecast

Q

NITORI Group is accelerating evolution into a company that makes comprehensive
lifestyle suggestions. Following the management integration with SHIMACHU, you haveformed a capital and business alliance with EDION, a major consumer electronics
retailer. Please tell us about specific measures NITORI Group will implement in the next
fiscal year to expand and integrate business areas.

Toward achievement of our mission of enriching homesof people all over the world, in ﬁscal 2021 the number ofstores of NITORI Group as a whole increased by 79, net,
to 801 stores as of February 20, 2022, comprising an
increase of 57 stores in Japan, 21 in Eastern Asia, and 1 in
Malaysia. Of these, the ﬁrst store in Malaysia, opened in
Kuala Lumpur on January 20, 2022, which is our ﬁrst store
in Southeast Asia.
Based on the conviction that the number of stores andthe number of customers who purchase our products are
metrics indicative of our contribution to society, we are
expanding our store network in Japan and around theworld to develop a global chain of stores so that morecustomers can conveniently purchase our products.
In ﬁscal 2022, NITORI Group plans a net increase of 100
stores in Japan, 34 in Eastern Asia, 1 in the U.S., 6 in
Malaysia, and 2 in Singapore, without any slackening in
the pace of new store openings.
With regard to store openings in Japan, by further
differentiating Deco Home, which is a small-store format,
and the NITORI brand, we aim to build a business format

that can coexist with NITORI. We will also accelerate store
openings of the N+ women’s apparel brand. Regarding
store openings overseas, we plan to open more stores
than ever before in Eastern Asia. We will also accelerate
the opening of new stores in Southeast Asia, promoting
store openings in Malaysia and Singapore. We willcontinue to proactively open new stores, with a target of
1,400 stores globally by 2025.
We are also entering markets in countries and regions
where we do not have physical stores throughe-commerce and cross-border e-commerce. For example,
we began offering products through Coupang, the largest
e-commerce website in South Korea.
By continuing to expand our business areas and store
network, we will increase the number of customers andimprove shopping convenience for them.
In the next ﬁscal year, the business environment is
expected to remain challenging owing to the impact of theresurgence of COVID-19 in Eastern Asia and concerns
about the prolonged crisis in Ukraine, as well as soaring
prices of timber and other raw materials worldwide, yen

66

Financial & Company Data -NITORI Group’s Financial Strategy
depreciation, and rising marine transportation costs. In
these circumstances, NITORI Group will continue toengage in cost reduction initiatives, such as consolidating
suppliers and considering the possibility of switchingprocurement to different parts of the world.
To establish a fully-fledged global chain, through theevolution of our unique business model that integrates
manufacturing, distribution, IT, and retail, we will further
expand our store and delivery networks attuned tocustomers’ purchasing behavior. At the same time, whiledeveloping business overseas, we will pursue expansion
and integration of business areas, including through thedevelopment of new lifestyle-related categories andservices so as to evolve into a company that makes
comprehensive lifestyle suggestions, also covering home
improvement and apparel.
For the next ﬁscal year onward, we have changed theﬁscal year-end from February 20 to March 31 to facilitate
efﬁcient execution of the Group’s business administration,etc. and for the convenience of monthly comparison withother companies in the same industry. Fiscal 2022 will bea period of 13 months and 11 days from February 21, 2022
to March 31, 2023, as it is a transitional period for thechange of the ﬁscal year-end.
Regarding the forecast of consolidated results, we
forecast net sales of 963.6 billion yen, an 18.7% increase
year on year, and ordinary income of 153.0 billion yen, a
7.9% increase year on year. The assumptions for the
results forecast are a year-on-year increase in existing
store sales of 2.6% and a capital expenditure of 89.0 billion
yen. As for the foreign exchange rate, we have alreadyentered into forward exchange contracts for half at a rateof approximately 114.90 yen to the dollar. The assumed
exchange rate for the full year is 115.00 yen to the dollar.

3. Five key measures and financial strategy

Q

Capital investment for strengthening the supply chain and reinforcing IT systems to
overcome the unstable business environment, such as the COVID-19 pandemic and thesituation in Ukraine, must be a major issue. What is NITORI Group’s financial strategy
in relation to the five key measures?

For ﬁscal 2022, we set ﬁve key measures for achieving
our medium- to long- term vision.
While strengthening product development from thecustomer’s perspective and pursuing lower prices to gain
further customer support as destination stores, we willproactively expand our store network and e-commercebusiness in Japan and overseas, including in countries
and regions where we have no stores yet.
Moreover, we will promote the establishment of afoundation for a global chain store, including theestablishment of systems and mechanisms common
throughout NITORI Group, design of personnel systems,
and human resources development, as well as working toshorten product supply lead times and curb cost increases
due to soaring raw material and transportation costs.
Regarding the IT ﬁeld, we established a new IT company,
Nitori Digital Base, on April 1, 2022, to further accelerate
the Group’s digital transformation. Nitori Digital Base willlead global and large-scale projects from a digital
perspective and aim to innovate through the application of
unprecedented technology.
For the distribution network in Japan, our focus is on the
optimal location of distribution centers and theconcentration of functions. With the improvement ofoperations, shipping and the home delivery network, and67

business processes as reform themes, we plan to makemajor investments totaling more than 350 billion yen overthe ﬁve years from 2021 to 2025.
In the SHIMACHU Business, we will continue
strengthening the home improvement business by
expanding the range of products covered by thedevelopment of private-brand products and enhancing
product appeal to beneﬁt local customers seeking more
comfortable lifestyles. We signed the capital and businessalliance agreement with EDION Corporation in April 2022.
The two groups will mutually utilize their management
resources and know-how to expand their businesses andenhance their corporate value.
In terms of sustainability management, we aim tocontribute to a sustainable society by promoting businessthat will lead to both resolutions of social issues and theaccomplishment of our mission. We will continue our
pursuit of authentic sustainability management byconsidering environmental, social, and governance issues
within the framework of the entire supply chain andimplementing improvements and reforms at every stage,
taking advantage of NITORI Group’s unique businessmodel integrating manufacturing, distribution, IT, and retail.
NITORI Group has been securing retained earnings
required for responding to changes in the businessenvironment. As a result, the Group has been able tomaintain a sound ﬁnancial position with an equity ratio of
74.5% for ﬁscal 2021. Toward our vision of 3,000 storesand 3 trillion yen in net sales by 2032, while maintaining asolid ﬁnancial foundation, we will continue flexible ﬁnancing
and proactive investment, with the aim of achieving stable
and sustainable growth.

4. Shareholder returns

Q

With regard to shareholder returns, does your basic policy of paying a stable dividend,
while also balancing this with investment for growth, remain unchanged?

Our basic policy for shareholder returns will be tomaintain stable dividends while taking into account factors
such as the future growth potential and proﬁtability of ourbusiness, ﬁnancial soundness (i.e., cash generated, cash
and deposits held, and the level of our equity ratio),
investments undertaken, and capital efﬁciency. The annual
dividend per share for ﬁscal 2021 was 140 yen, an
increase of 17 yen from the previous year. This marks 18
consecutive years of increased dividends. For ﬁscal 2022
we are planning to pay an annual dividend of 147 yen per
share; if we achieve this, it will be our 19th consecutive
year of increased dividends. As NITORI Group is in a
growth phase, as indicated by 35 consecutive years ofsales and proﬁt growth, we believe it is important to link
proﬁt growth through investment for growth to theenhancement of corporate value, which will lead to higher
total shareholder return, including not only dividends andshare buybacks but also indirect returns through a higher
stock price. NITORI Group will continue aiming to betrusted by stakeholders as it combines continuous
contribution to societal development with efforts toenhance its corporate value. We ask for shareholders’continued support as we pursue these endeavors.

Dividend per share and payout ratio
Dividend per share

Payout ratio

(Yen)
140

(%)
30.0

120
100

20.0

80
10.0

60
40
20

0

2018

2019

2020

2021

2022(FY)

5. Dialogue with capital markets

Q

Could you tell us about your approach and initiatives in terms of dialogue withstakeholders?

We recognize that constructive dialogue withshareholders and investors is important for NITORIGroup’s sustainable growth and enhancement of corporate
value over the medium to long term. In order to promote
constructive dialogue, our basic IR policy is to disclose
important information about the Group accurately, clearly,
fairly, and promptly, in a timely and appropriate manner.
We disclose information in accordance with the Companies
Act, the Financial Instruments and Exchange Act, the rulesof the stock exchanges, and other applicable laws andregulations.
Moreover, to help stakeholders deepen theirunderstanding of NITORI Group, we proactively disclose
information beyond what laws and regulations require by
publishing the integrated report, holding results brieﬁngs
and small meetings, conducting store tours, etc. In
addition, we will promote information disclosure in English
to the extent reasonable in order to gain recognition in
global capital markets.

68Mission Statement & Vision
Financial & Company Data -Company Stock Information / Company Information

Enriching homesof people all over the world

Company Information (As of February 20, 2022)

Company Stock Information (As of February 20, 2022)■Outline of Shares

Total number of authorized shares: 288,000,000
Total number of issued shares: 114,443,496
Number of shareholders: 27,914
Listed markets: First Section of the Tokyo Stock
Exchange and the Sapporo Securities Exchange
Securities code: 9843
VisionFiscal Year:2032
February 21st of every year to February
20th of the following year
Annual General Meeting of Shareholders: May
Administrator of shareholder registry: Sumitomo Mitsui
Trust Bank, Limited

3,000stores■Major Shareholders

Number Ratio to the totalof shares number of issued
owned
shares (%)

Name

Treasury stock
1.17%

Individual shareholders
12.67%

Securities
companies
1.92%

Representative

Akio Nitori, Representative Director & Chairperson (Chief Executive Officer)
Toshiyuki Shirai, Representative Director & President (Chief Operating Officer)

Address

Sapporo Head Office: 1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo, Hokkaido 001-0907;
TEL: +81-11-330-6200
Tokyo Headquarters: 3-6-20, Kamiya, Kita-ku, Tokyo 115-0043;
TEL: +81-3-6741-1235

18.39

The Master Trust Bank of Japan, Ltd.
(Trust Account)

12,661

11.19

Establishment

Established December 1967

Custody Bank of Japan, Ltd. (Trust
Account)

Incorporated

March 1972

5,003

4.42

Revenues(Consolidated)¥811,581 million

NITORI International ScholarshipFoundation

4,000

3.54

¥141,847 million

North Pacific Bank, Ltd.

3,860

3.41

Ordinary
Income(Consolidated)

Akio Nitori

3,410

3.02

Capital Stock¥13,370 million

Momoyo Nitori

3,078

2.72

37,229 (including 18,245 average part-time employees)

National Mutual Insurance Federationof Agricultural Cooperatives

2,411

2.13

Number of
Employees(Consolidated)

Nippon Life Insurance Company

2,056

1.82

NITORI Group List

CITIBANK, N.A.-NY, AS
DEPOSITARY BANK FOR
DEPOSITARY SHARE HOLDERS

1,832

1.62

Curtain Manufacturing Factory

Import Agent Companies

HOME DECO CO., LTD

Notes:
1. The numbers presented in “Number of shares held” above arecalculated based on the list of shareholders.
2. The Company’s 1,344,143 shares of treasury stock are excluded
from the above list of major shareholders.
3. Calculations of equity positions exclude holdings of treasury
stock.
4. The number of shares owned by The Master Trust Bank of Japan,
Ltd. and Custody Bank of Japan, Ltd. are shares held insecurities investment trusts and retirement benefit trusts.

Other corporationsin Japan
23.49%NITORI Holdings Co., Ltd.

20,7993

Financial
institutions
29.89%

Company NameNITORI Trading Ltd.

Net Sales ¥ trillion■Distribution of Shares by Type of
Shareholder

Foreign corporations, etc.
30.86%(As of February 20, 2022)

NITORI (China) Co., Ltd.
NITORI (Taicang) Trading & Logistics Co., Ltd
NITORI TRADING VIETNAM COMPANY LIMITEDNITORI TRADING (MALAYSIA)SDN.BHD.
NITORI TRADING THAILAND CO., LTD.
NITORI INDIA PRIVATE LIMITED

Overseas Manufacturing
Companies
NITORI FURNITURE
VIETNAM EPE
Ba Ria-Vung
Tau Branch

Trading, Planning & Development,
and Logistics Functions

Logistics Companies
Home Logistics Co., Ltd.
Home Cargo Co., Ltd.

Advertising Agency■Stock Price and Turnover

Nitori Public Co., Ltd.

Stock price (yen)Facility Management Insurance
Agent Business

24,000

Manufacturing Functions

22,000NITORI Holdings
Co., Ltd.
[Holding Company]

20,00018,00016,000

Facility Management
Functions

IT Functions

14,00012,000

Nitori Facility Co., Ltd.

Store Management Companies

Nitori Co., Ltd.
・-HOME FURNISHING STORE-HOME FASHION STORE-NITORI MALL
-DECO-HOME-Online Shopping Business-Renovation Business-Corporate Sales Business, etc.
SHIMACHU CO., LTD.
-SHIMACHU-SHIMACHU HOME’S-NITORI HOME’S

Sales Functions

Turnover(Thousand shares)

10,000Advertising and Publicity
Functions

15,000Apparel Sales Company
N Plus Co., Ltd

10,0005,000

2019/3

2019/6

2019/92019/122020/32020/62020/92020/122021/32021/62021/92021/122022/3IT / Digital Company

Nitori Digital Base CO., LTD.

0
Carpet and Rug Manufacturing Company
SIAM NITORI CO., LTD.

01
69
01

Overseas Sales Companies

NITORI TAIWAN CO., LTD
NITORI (CHINA) HOLDINGS CO., LTD.
DECO HOME CHINA CO., LTD
NITORI (SHANGHAI) HOME FURNISHING CO., LTD
NITORI (SHANGHAI) HOME FURNISHING SALES CO., LTD
NITORI USA, INC.

70

NITORI Holdings Co., Ltd.
Sapporo Head Office

1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo,
Hokkaido 001-0907

Tokyo Headquarters

3-6-20, Kamiya, Kita-ku, Tokyo 115-0043

Osaka Headquarters

1-1, Kamisu-cho, Toyonaka, Osaka 561-0823

www.nitorihd.co.jp