Medium-term Management Plan

Contents

1.

Current Environment2.

Performance Targets

3.

Medium-term Three-year Sales Targets

4.

Basic Policies of the Medium-term Plan

5.

Key Strategies driven by Basic Policies

6.

Investment to Support Key Strategies

7.

Financial Strategy

8.

Strengthening CSR©Copyright ONWARD HOLDINGS CO.,LTD11. Current Environment

Provide a diverse sense of value and expand our customer base, confronting challenges and exploiting
opportunities in Japan and overseas.

Challenges facing
the Onward GroupBusiness
opportunities

Basic policies

Decreasing Japanese population

Diversifying customer values and lifestyles

Increasing household burden

Rising business costs (production costs)

Accelerate omni-channel strategy

Expand in global markets

Provide a diverse sense of value

Broaden customer baseOffer a wide variety of products and services that
respond to the diversification in customer values and lifestyles

Maximize sales channels/customer contact points
to respond to the shrinking domestic consumer market©Copyright ONWARD HOLDINGS CO.,LTD2

2. Performance Targets

Through global expansion and our omni-channel strategy,
we target sales of 280.0 billion yen, operating profit of 10.0 billion yen, and ROE of 5% in FY02/19.
FY02/19 (Plan)

FY02/21 (Targets)
Sales

Sales

Omni-channel strategy

FY02/16 (Results)

Sales

263.5 billion yen
Operating profit: 3.8 billion yen
Operating profit margin: 1.4%

280.0 billion yen

300.0 billion yen
Operating profit: 15.0 billion yen
Operating profit margin: 5.0%

Operating profit: 10.0 billion yen
Operating profit margin: 3.6%

ROE: 5%Global expansion©Copyright ONWARD HOLDINGS CO.,LTD33. Three-year Sales Targets

E-commerce sales: 4％(FY02/16) to 12％(FY02/19) of total sales
Domestic

E-commerce

FY02/16 (Results)

FY02/19 (Plan)

11.4 billion yen

31.0 billion yen

Global
FY02/16 (Results)

0.6 billion yen

FY02/19 (Plan)

5.0 billion yen

Physical stores

Omni-channel strategy

Change: 272%; +19.6 billion yen

Change: 833%; +4.4 billion yen

FY02/16 (Results)

FY02/16 (Results)

FY02/19 (Plan)

54.5 billion yen

66.0 billion yen

FY02/19 (Plan)

212.0 billion yen 190.0 billion yen
Change: 90%; -22.0 billion yen

Change: 121%; +11.5 billion yen

Domestic sales

Global sales

FY02/16 (Results)

FY02/19 (Plan)

223.4 billion yen 221.0 billion yen
Change: 99%; -2.4 billion yen

E-commerce sales
FY02/16 (Results)

FY02/19 (Plan)

12.0 billion yen 36.0 billion yen
Change: 300%; +24.0 billion yen

Physical store sales
FY02/16 (Results)

FY02/19 (Plan)

266.5 billion yen 256.0 billion yen
Change: 96%; -10.5 billion yen

Total (Simple aggregate)

FY02/16 (Results)

FY02/19 (Plan)

FY02/16 (Results)

55.1 billion yen

71.0 billion yen278.5 billion yen 292.0 billion yen

Change: 129%; +15.9 billion yen

FY02/19 (Plan)

Change: 105%; +13.5 billion yen*Before consolidated eliminations

Global expansion
Global sales: 20% (FY02/16) to 24% (FY02/19) of total sales©Copyright ONWARD HOLDINGS CO.,LTD4

3. Three-year Sales Targets: Physical Stores in Japan

Sales (Billion Yen)

FY02/16(Results)

FY02/19(Plan)

Vs. FY02/16

ChangeDomestic: Physical stores

212.0

190.0

90%

-22.0

Onward Kashiyama

139.7

133.5

96%

-6.2

Nijyusanku (women’s)

24.026.5

110%

2.5

Jiyuku (women’s)

8.2

12.0

146%

3.8

Personal Order (men’s)

5.4

6.0

111%

0.6

gotairiku (men’s)

4.7

5.5

117%

0.8

JOSEPH (men’s, women’s)

4.8

6.0

125%

1.2

TOCCA (women’s, children’s)

3.0

4.0

133%

1.0

SHARE PARK (men’s, women’s, children’s)

0.6

3.5

583%

2.9

any SiS (women’s)

8.5

9.0

106%

0.5

any FAM (women’s, children’s)

7.4

8.0

108%

0.6

Other

73.1

53.0

73%

-20.1

72.3

56.5

78%

-15.8

Onward Trading

15.6

16.5

106%

0.9

Chacott

10.5

11.5

110%

1.0

Island

8.1

9.0

111%

0.9

Creative Yoko

5.9

6.5

110%

0.6

Across Transport

11.7

0.00%

-11.7

Other

20.5

13.063%-7.5

Other domestic subsidiaries©Copyright ONWARD HOLDINGS CO.,LTD5

3. Three-year Sales Targets: Physical Stores Overseas

Sales (Billion Yen)
Overseas: Physical stores

FY02/16(Results)

FY02/19(Plan)

Vs. FY02/16

Change

54.5

66.0

121%

11.5

41.6

47.5

114%

5.9

22.5

28.0

124%

5.5

JOSEPH

13.2

14.5

110%

1.3

JIL SANDER

7.3

10.0

137%

2.7MOREAU PARIS

0.0

1.0-1.0

Freed of London

2.0

2.5

125%

0.5

19.1

19.5

102%

0.4

5.6

6.0

107%

0.4

Brand business

0.7

1.0

143%

0.3

Resorts business

4.9

5.0

102%

0.1

7.3

12.5

171%

5.2

6.8

12.0

176%

5.2

China (Excluding Hong Kong and Taiwan)

3.0

5.0

167%

2.0

Onward J Bridge

0.2

3.0

1,500%

2.8

Other

3.6

4.0

111%

0.4

Production

0.5

0.5

100%

0.0

EuropeBrand

Production(Onward Luxury Group *Excluding JIL SANDER)

USAsiaSales©Copyright ONWARD HOLDINGS CO.,LTD64. Basic Policies of the Medium-term Plan

Provide a diverse sense of value

Broaden customer base

Expand our product line-up and services centered on fashion

Strengthen communications with existing customers, win new customers

Enhance the value of our products while entering newmarkets to respond to demand
from a variety of lifestyles.
.

Maximize time spent with customers
at all sales channels.

Provide activities and services
that inspire our customers.

Increase contact points with new global customers,
particularly in Asia.

©Copyright ONWARD HOLDINGS CO.,LTD7

5. Key Strategies driven by Basic Policies

Provide a diverse sense of value

Broaden customer baseProducts

Existing customers

 Further expand products that provide value added, centering onapparel.
 In addition to our strengths in planning, development, and manufacturing
technology,• Expand high value-added production in Europe• Expand Made in Japan production, including J∞QUALITY certified products• Collaborate with creators outside the group• Balance production costs and quality

 Expand into the lifestyle field, including accessories.
 Expand product offerings such as bags and jewelry.

 Create stores where customers enjoy spending time.
 Implement Aurora Strategy, increasing stores with salon services
 Create omni-stores primarily in regional department stores Provide wellness activities and family entertainment

 Expand services to increase customer satisfaction.
 More customized services to respond to individual needs
 Strengthen services to remake, repair, and reuse Provide storage services

Activities and services

 Increase functions and services to encouragecustomers to spend time in stores.
 Expand number of loyalty card members.
 Increase convenience by aggregating E-commerce
inventory data.
 Deepen relationships via “Storeless” sales(personal concierge services, proposal-based sales to corporate customers).

 Use new media to create more contact points withpotential customers.
 Increase the market for Nijyusanku and JOSEPH
overseas.
 Grow customer base (primarily in Asia) by tapping
inbound tourist demand/cross-border E-commerce.
 Consider M&A as an option to win new customers.
New customers©Copyright ONWARD HOLDINGS CO.,LTD8

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Further expand products that provide value added, centering on apparel.
Utilize our strengths in planning, development, and manufacturing technology.

Expand Made in Japan production,including J∞QUALITY certified products.

Expand high value-added production in Europe.

Collaborate with creators outside the group.

Balance production costs and quality.

Partner with numerous creatorsfrom outside the group in FY02/17.
Myanmar Cooperative Factory Cambodia Cooperative Factory©Copyright ONWARD HOLDINGS CO.,LTD9Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand into the lifestyle field, including accessories.

Island: CARVING TRIBES

Onward Kashiyama: New jewelry brand

Unique handmade bags produced
by craftspeople in Mexico.

Jewelry created by Japanese artisans,utilizing rare and high-quality Myanmar rubies.

©Copyright ONWARD HOLDINGS CO.,LTD

10

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand into the lifestyle field, including accessories.

MOREAU PARIS

Founded in Paris in the 19th century.
Luxury leather goods utilizing traditional French leatherworking techniques and featuring thick, handmade stiches.

©Copyright ONWARD HOLDINGS CO.,LTD11Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Increase functions and services to encourage customers to spend time in stores.
Implement Aurora Strategy, increasing stores with salon services.
Nijyusanku

gotairiku

JiyukuCLASSLOUNGEStores providing the atmosphere and shopping
experience of Nijyusanku GINZA.

Stores catering to all aspectsof personal appearance for men.

Stores providing more extensive brand labels(including customized services) to target a broader
customer base.
©Copyright ONWARD HOLDINGS CO.,LTD12

Provide diverse valueCustomer base

5. Key Strategies driven by Basic Policies

Increase functions and services to encourage customers to spend time in stores.
Create omni-stores primarily in regional department stores.

Customer service using tablets

Store personnel offer customers the option ofusing tablets to browse out-of-stock items©Copyright ONWARD HOLDINGS CO.,LTD13

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Increase functions and services to encourage customers to spend time in stores.
Provide wellness activities and family entertainment.

ChacottDance CubeStores that promote wellness through ballet and dance.

Creative Yoko
Shirotan Friends museum

Pet Paradise DXStores providing entertainment that can be enjoyed by the entire family.

©Copyright ONWARD HOLDINGS CO.,LTD

14

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand services to increase customer satisfaction.
More customized services to respond to individual customer needs.
Sebiro&co.,

Personal Order

Increase information sharing with domestic factories.
Through a stronger partnership with GOODHILL Co., Ltd., acceleratecreation of a database with size information and order histories.

Promote shorter lead times and E-commerce via ICT.

©Copyright ONWARD HOLDINGS CO.,LTD15

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand services to increase customer satisfaction.
More customized services to respond to individual needs.
Nijyusanku

Expand services to customize a variety of items,
including suits and shoes for working women.

©Copyright ONWARD HOLDINGS CO.,LTD

16

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand services to increase customer satisfaction.
Strengthen services to remake, repair, and reuse.

Provide storage services.

Expand remake and repair business for apparel.

Pick-up

Charity sales of secondhand items

Cleaning

Storage©Copyright ONWARD HOLDINGS CO.,LTD17

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Expand number of loyalty card members.

Increase convenience by aggregating E-commerce inventory data.

ONWARD CROSSET
Add members from around the world

Target: 3 million members
by end of FY02/19
Add customers of domestic groupcompanies as members

Integration of 1.2 million
members completed on April 1, 2016Integration with
Onward Crosset

Link E-commerce inventory
data from April 7, 2016.
E-commerce websites atother Onward-affiliated companies

Loyalty card members(600,000 members)

E-commerce websites of department stores and online-only malls.
©Copyright ONWARD HOLDINGS CO.,LTD18

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Deepen relationships via “Storeless” sales (personal concierge services and corporate customers).

Individual customers
Personal
concierge services

Corporate customers

Respond to various requests from individual and corporate customers.

Provide uniforms in sectors such as education and medicine.

©Copyright ONWARD HOLDINGS CO.,LTD

19

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Use new media to create more contact points with potential customers.
Actively use SNS.
facebook

Collaborate with other industries including through affiliates.

Instagram×Airlines

Electronics
manufacturers
・・・

LINE
New product stock information

Onward group stores and E-commerce
websites

Referred customers

Referred customers©Copyright ONWARD HOLDINGS CO.,LTD

20

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Increase the market for Nijyusanku and JOSEPH overseas.
Expand global advertising

Global flagship stores
Nijyusanku GINZAJOSEPH London

Global E-commerce websites
ONWARD CROSSET

Chinese website

Japanese website©Copyright ONWARD HOLDINGS CO.,LTD

21

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Grow customer base (primarily in Asia) by tapping inbound tourist demand and cross-border E-commerce.
.

Provide high-quality customer service

Physical storesFlagship stores

Overseas stores

Nijyusanku GINZAONWARD J BRIDGE

×E-commerce websites
Chacott Shibuya

Cross-border E-commerce(ONWARD CROSSET, websites for each brand)©Copyright ONWARD HOLDINGS CO.,LTD22

Provide diverse value

Customer base

5. Key Strategies driven by Basic Policies

Consider M&A as an option to win new customers.
Acquired Tiaclasse, an apparel manufacturer specializing in E-commerce brands (acquired shares on April 1, 2016).

Creating synergies

Cooperation with ONWARD CROSSET

Websites share customers.

Cooperation with physical stores

Provide information on Tiaclasse brands
through physical Onward group stores.

©Copyright ONWARD HOLDINGS CO.,LTD23

6. Investment to Support Key Strategies

Personnel Strategy

ICT Strategy

Foster global personnel• Strengthen global capabilities across the Onward Group.
•Improve skills of fashion stylists (sales personnel)• Provide training to deepen understanding of brands, materials, and products.

Actively invest in ICT• Improve supply chain efficiency and speed through ICT.
• Create new business models utilizing the latest ICT.

• Expand education on Onward’s customer service principles.

©Copyright ONWARD HOLDINGS CO.,LTD24

7. Financial Strategy

FY02/19 Financial Targets
1. Financial Situation(1) Policy on Shareholder Returns
Returning profits to shareholders is one of our most important management objectives. Our basic policy is
to maintain a consistent level of shareholder returns linked to performance, with a target dividend payout
ratio of 35% or more.

(2) Financial indicators
We avoid financial risk and maintain a stable shareholders’ equity ratio through substantial shareholders’equity and flexible financing.

2. Improving ROE
TARGET:

5% ROE in FY02/19

PLAN:(1) Share buyback(2) Sale of shares (including unwinding cross-shareholdings)(3) Effective use of assets (sale and use of assets)(4) Dividend policy (maintain stable dividends linked to performance)©Copyright ONWARD HOLDINGS CO.,LTD25

8. Strengthening CSR

Ecology

EthicsOnward Green Campaign
Improve worker benefits and work environment at partner
Forest protection activities at the Tosayama Onward Rainbow Forest
factories through thorough guidelines to comply with
ONWARD Reuse Park store initiative
the plant certification system.

Diversity
Actively provide opportunities for women,handicapped workers, and non-Japanese workers.
Create motivating work environments.

©Copyright ONWARD HOLDINGS CO.,LTD26