Results Briefing Fiscal Year Ended February 28, 2014
April 14, 2014 16:00-17:00

Q&A
Q1
Forecasts for the fiscal year ending February 28, 2015 indicate that net sales at theexisting stores of the F.D.C. Products group will increase 2.8% year on year. Can you
provide us with projections for the first and second halves of the fiscal year?
A1
Net sales of existing F.D.C. Products group stores are projected to climb 2.4% and 3.1%
for the first and second halves, respectively, of the fiscal year ending February 28, 2015.
This translates to a full fiscal year increase of 2.8%. Adopting a prudent approach, weestimate that sales at existing 4ºC stores under the group’s department store model will
improve 2.0% in the first half and 1.3% in the second half for a full fiscal year
improvement of 1.6%. Turning to specialty stores as well as existing 4ºCBRIDAL
roadside stores, sales are projected to grow 2.5% and 6.0% in the first and second
halves, respectively for a total increase of 4.4% for the fiscal year ending February 28,
2015. Finally, focusing mainly on existing canal4ºC fashion building stores, sales are
anticipated to climb 3.3% in the first half and 2.9% in the second half for a full fiscal
year improvement of 3.1%.
Q2
Again in the fiscal year ending February 28, 2015, you are projecting a further
improvement in the F.D.C. Products group operating income margin of 0.4 of apercentage point. What is the structure of this anticipated increase in terms of thegroup’s gross profit margin and its ratio of selling, general and administrative (SG&A)
expenses to net sales?
A2The F.D.C. Products group’s operating income margin is indeed anticipated to improve
0.4 of a percentage point year on year to 17.2%. In specific terms, the gross profit
margin is forecast to improve 0.4 of a percentage point while the SG&A expenses to net
sales ratio is forecast to improve 0.1 of a percentage point.
Q3
Can you please elaborate on trends at existing F.D.C. Products group stores during thefiscal year ending February 28, 2015? Assuming that there was no effect from thechange in nominal retail prices last year, how many months adjustment can be attributed
to the increase in the consumption tax rate?
A3Looking first at trends in existing stores for the fiscal year ending February 28, 2015,
net sales are projected to fall 1.7% year on year. In the second quarter, we are
anticipating an increase of 6.3% for a first half improvement of 2.4%. In the third andfourth quarters, we are expecting improvements of 7.3% and 0.4%, respectively. Thistranslates to an estimated upswing of 3.1% for the second half and 2.8% for the full
fiscal year. While we are currently expecting sales for the first quarter to decline year onyear, results in March have been strong with no sign of a drop off in April. On this basis,1

Results Briefing Fiscal Year Ended February 28, 2014
April 14, 2014 16:00-17:00

it would appear that sales for the first quarter will in fact exceed those of thecorresponding period of the fiscal year ended February 28, 2014.
Turning to the impact of an increase in the consumption tax rate, we arepredicting existing stores to surpass the previous year from May under the current plan.
Prices were increased in April 2013 with sales also dropping off in April and May forthe completed period. In comparison, we do not expect the impact of consumption tax
on the period that has just commenced to be of any substance. Estimates indicate that
we will clear results for the previous fiscal year from May.
Q4
How far do you think you can continue to open stores over the long term for eachjewelry brand?
A4
We are seeing robust trends in the current expansion of 4ºCBRIDAL and canal4ºCstores. At this pace, we believe we can extend each network by close to 80 stores.
Current plans call for an increase of 50 deux et deux stores. While we are currently
taking steps to establish a solid platform for MAISON JEWELL stores, should ourefforts go according to plan we see ample room for expansion. This reflects the large
number of opportunities at suburban-type shopping centers.
Q5
Please provide us with your thoughts on the profitability of each jewelry brand going
forward. Ordinary income margins for the 4ºCBRIDAL and canal4ºC brands arepresented on page 23 of the presentation materials. 4ºCBRIDAL stores have alreadyestablished a presence in prime locations. As a result, operating income margins may
not increase all that much in the future. On a personal note, I believe that we should see
canal4ºC margins improve a little more. Can you provide us with your thoughts?
A5
The 4ºCBRIDAL ordinary income margin for the fiscal year ending February 28, 2015
is scheduled to come in at 21.4%. While average sales per store currently stand at ¥150
million, this figure is expected to settle in at around the ¥100 million-mark in the future.
At the same time, rent is projected to decline and we intend to hold down headquarters
as well as advertising and promotion expenses. As a result, we plan to maintain theordinary income margin at 20%. While keeping to this figure of around 20%, we will
work to secure profits by increasing our market share. As far as canal4ºC is concerned,
the ordinary income margin is forecast to come in 13.9%. Average sales per store iscurrently around ¥100 million. We will maintain this level for the foreseeable future andwork to thin out headquarters as well as advertising expenses by opening more stores.
Through these mans, we plan to lift the ordinary income margin to around 15% going
forward. The difference in margins between these two brands reflects the level of sales
per store.
Q6
The cost of sales declined in the fiscal year ended February 28, 2014. Can you pleasetell us in what areas you were able to bring about this decline?
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Results Briefing Fiscal Year Ended February 28, 2014
April 14, 2014 16:00-17:00

A6
The cost of sales for the fiscal year ended February 28, 2014 was ¥21,260 million and¥21,270 million for the fiscal year ended February 28, 2013. This is an overall
difference of ¥10 million. This result reflects the sale of FLAGS Co., Ltd., our café andrestaurant business, at the end of February 2013. In specific terms, this lowered net sales
and the cost of sales by ¥900 million and ¥300 million, respectively.
Q7
MISUZU Co., Ltd. has identified the target of reestablishing the Rew de Rew brandduring the fiscal year ending February 28, 2015. Can you provide us with more details
on what measures will be adopted?
A7
MISUZU Co., Ltd. incurred a loss in the fiscal year ended February 28, 2014. Plans arein place during the fiscal year ending February 28, 2015 to close and withdraw from 13
unprofitable stores. At the same time, considerable emphasis will be placed on reducing
headquarters expenses. The withdrawal from 13 stores and efforts to cutback
headquarters expenses is projected to deliver improvements of ¥53 million and ¥86
million, respectively. In core brands including Rew de Rew, we will clarify the directionof merchandising and bolster our exterior and outer strengths. Despite efforts toreinforce single items last year, we struggled with respect to our summer apparelendeavors. As a result, we will reinforce our outer strengths. In particular, customer
surveys have revealed strong support for one piece items. In addition to strengthening
our outer wear lineup focusing mainly on one piece items, we will adopt a productstrategy that helps to enhance the merchandising of future item plans.

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