Earnings presentation for the half of FY2015

Q&A
Q1
Can you provide us with details of recent conditions and the Group’s
performance in its bridal jewelry business including the 4° BRIDAL brand?
A1
Sales at existing 4° BRIDAL stores for the first half of fiscal 2015, the fiscalyear ending February 29, 2016, climbed 2.7% compared with thecorresponding period of the previous fiscal year. On a year-on-year basis,
sales of wedding rings increased 4.8% while sales of engagement rings fell
0.7%. After the consecutive five-day weekend and public holiday period andfrom the middle of September as well as the first Saturday immediately
following the extended holiday period, sales stalled declining 1.3% comparedwith the corresponding period of the previous fiscal year. On a positive note,
trends became steady from early October. Taking each of the aforementioned
into consideration, sales are forecast to recover in the 2H.
Q2
Sales of fashion jewelry and in particular the Eternal Silver lineup ofproducts are robust. Can you provide us with your thoughts on market
trends and the competitive environment generally?
A2In addition to the very strong performance of 4°C jewelry, we are seeing
robust contributions from the 4°C Pregence brand, which was developed toaddress the increasingly polarized nature of customer needs, and Eternal
Silver. As a result, overall trends in fashion jewelry are positive.
From a market perspective, we believe that disparities are beginning toemerge between brands. Customers’ preferences are becoming increasinglypolarized. As a result, brands that successfully address this trend continue tothrive while those that do not struggle.
Q3Can you elaborate on trends in engagement rings?
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Earnings presentation for the half of FY2015

A3
While volumes are increasing, we are witnessing a period of slight priceadjustment.
Q4
Current plans for the next period call for the opening of 18 new stores. Is
your policy also to expand store sales space?
A4
Trends at large-scale composite stores are robust. During the fiscal year
under review, steps were taken to roll out one new large-scale composite
store and to renovate two existing stores. From an overall composite store
perspective, sales at renovated stores climbed nearly 25% compared with thecorresponding period of the previous fiscal year. With a large number ofinquiries regarding the shift to composite stores, expectations are that sales
will increase further next year.
Q5
What is the average floor space of large-scale composite stores? How manylarge-scale composite stores do you plan to open over the long term?
A5
The average floor space of large-scale composite stores is between 35 and 50
115 ㎡～165 ㎡. Looking ahead, we are looking to roll out from three to fivelarge-scale composite stores.
Q6
Can you provide details of sales and profits for bags, purses, and smallleather goods? What are your plans for the future? What direction do you
intend to take?
A6Sales of 4°C Watch products came to ¥185.7 million, up 205.7% comparedwith the previous period. We believe that sales will reach around ¥400
million for the full year. Our goal for the foreseeable future is to boost sales of2

Earnings presentation for the half of FY2015

4°C Watch products to above the ¥1 billion level. Looking at bag sales in the1H for all stores, 4°C BAG and Luria 4°C products combined for a total ofapproximately ¥700 million. This represented an increase of 54.8% year onyear. We plan to maintain this trend and are projecting sales for the full year
to total around ¥1.7 billion, an increase of more than 50% compared with theprevious fiscal year. Our sales target for the next fiscal year is ¥2.0 billion.

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