Summary of Consolidated Financial Results
for the First Quarter of Fiscal Year Ended February 28, 2022
[Japanese GAAP] (Consolidated)
July 2, 2021
Company name:

TSI HOLDINGS CO., LTD.

Stock listing: Tokyo Stock Exchange

Code number:

3608

URL: https://www.tsi-holdings.com/en/

Representative:

Representative Director and President, Tsuyoshi Shimoji

Contact:

Executive Officer, General Manager of Finance & Accounting Dept. Mitsuru Naito
TEL: +81-3-6748-0001

Scheduled date of financial report:

July 9, 2021

Scheduled date to begin dividend payment:―

Preparation of supplementary financial document:

Yes

Briefing session to explain the financial statements:

Yes (For institutional investors and analysts)(Rounded down to the nearest million yen)

1. Consolidated Business Results for the first quarter of the Fiscal Year Ended February 28, 2022(March 1, 2021 to May 31, 2021)(1) Consolidated results of operations(% change from the previous fiscal year)

Net salesFirst quarter of FY ended
February 28,2022
First quarter of FY ended
February 28,2021

Operating income

Million yen%

34,215

57.8

21,682(49.4)

Million yen

Profit attributable toowners of parent

Ordinary income%

Million yen%

Million yen

2,273

―

2,578

―

2,431

―

(6,445)―(6,094)―(10,454)―(Notes) Comprehensive income: First quarter of Fiscal year ended February 28, 2022 ¥2,887 million―%First quarter of Fiscal year ended February 29, 2021 ¥(11,792) million―%
Net income
per shareFirst quarter of FY ended
February 28,2022
First quarter of FY ended
February 28,2021

Diluted net
income per share
Yen

Yen

26.94

―

(113.91)―(2) Consolidated financial position

Million yen

Million yen

Shareholders’ equity
ratio%

148,329

100,348

67.3

154,951

97,43062.6

Total assets
First quarter of FY ended
February 28,2022
FY ended February 28,2021

Net assets(Reference) Shareholders’ equity: First quarter of FY ended February 28,2022¥99,859 million

FY ended February 2021

¥96,977 million

2. Dividends
Annual dividend
End of
1Q
Yen

End of
2Q
Yen

End of
3Q
Yen

Yen

Yen

FY ended February 2021

―

0.00

―

0.00

0.00

FY ended February 2022

―
0.00

―

5.00

5.00

Year-end

Total

FY ended February 2022
(forecast)(Note) Revisions during this quarter of dividends forecast for fiscal year: None%

3. Forecast of Consolidated Business Results for the Fiscal Year Ending February 28, 2022 (March 1, 2021 to February 28, 2022)(% change from the corresponding period of the previous fiscal year)
Net sales

Operating income

Ordinary income

Profit attributable toowners of parent

Million yen%

Million yen%

Million yen%

Million yen

71,300152,400

26.7
13.7

(500)
1,100

―
―

(300)
1,600

―
―

170
1,660

Net income
per share

%

Yen

―
(57.0)

1.88
18.40

Second quarter(Cumulative)
Full fiscal year

(Note) Revisions during this quarter of previously disclosed consolidated business results projection for FY 2022: None

＊Notes:(1) Changes in significant subsidiaries during the period: Yes
Changes in specified subsidiaries resulting in a change in the scope of consolidation
Deselection 2 companies(SANEI-INTERNATIONAL CO.,LTD. and TSI GROOVE AND SPORTS CO.,LTD.)(2) Application of particular accounts procedures to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
a. Changes in accounting policies due to revisions of accounting standards: Noneb. Changes in accounting policies other than above (a): Nonec. Changes of accounting estimates: None
d. Restatements: None
(4) Number of shares issued (common stock)a. Number of shares issued
Q1 of FY ended February
at the end of period2022(treasury stock included)b. Number of treasury
Q1 of FY ended February
stock at the end of period 2022
c. Average number ofshares over the period

95,783,293 shares

FY ended February 2021

95,783,293 shares

5,510,669 shares

FY ended February 2021

5,556,309 shares

Q1 of FY ended February2022

Q1 of FY ended February
90,242,807 shares

2021

91,774,868 shares*This business results report is not subject to auditing by certified public accountants or audit firms.
*Explanation regarding the appropriate use of business forecasts and other special instructions
The forward-looking statements, including business forecasts, contained in this document are based on information currently
available to the Company and on certain assumptions deemed reasonable by the Company, and are not intended as a promise by
the Company that they will be achieved. Actual results may differ materially due to a variety of factors. Please refer to "(3)Explanation of Consolidated Business Forecast and Other Forward-looking Statements " on page 3 for the assumptions underlying
the forecasts and cautionary statements regarding the use of the forecasts.

Contents of Attached Materials
1. Qualitative Information on results for this quarter of FY ended February 2022 ····································· 2(1) Overview of Business Results ······························································································· 2(2) Overview of Financial Position ···························································································· 3(3) Explanation of Consolidated Business Forecast and Other Forward-looking Statements ··············· 3
2. Quarterly Consolidated Financial Statements and Major Notes ······················································ 4(1) Quarterly Consolidated Balance Sheets ·················································································· 4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income··············· 6(3) Notes to Quarterly Consolidated Financial Statements ······························································ 8
Going Concern Assumption ··································································································· 8Notes on Significant Changes in Shareholders’ Equity ······························································ 8
Additional Information ········································································································· 8
Segments of the Company and Related Information ·································································1211.

Qualitative Information on results for this quarter of FY ended February 2022

(1) Overview of Business Results
During Q1 of consolidated cumulative period (March 1, 2021 to May 31, 2021), the apparel industry found itself ina situation where the spread of Covid-19 infections kept commercial facilities closed, or on short hours, and kept people
off of the streets, which is impacting clothing sales.
While the supply of vaccines and the start of mass inoculation are expected to converge, the government issued a 3rdstate of emergency on April 23, 2021, and the period of emergency was extended for some areas, leading to a state ofuncertainty across the nation.
Under such a business environment, our group is using the TSI Innovation Program 2024 (TIP24) as a springboard
to focus attention on withdrawing from unprofitable businesses and shops, reducing labor costs, and reducing SG&A
expenses across the entire company. Following this, we will shift to a phase that involves boosting efforts in the rapidly
growing area of EC business, and breaking into IT system business and other new business, etc. We will also actively
invest for the future to maximize profitability in the group.
Moreover, after the takeover merger in March 2021 as the first step aimed at unifying our group companies into one
company (our subsidiary Sanei BD Co., Ltd. absorbed 8 other subsidiaries, with the post-merger trade name changed
to TSI Inc.), with the aim of further improving decision-making speed and operational efficiency.
However, with no end in sight for the pandemic, we are diligently implementing measures, such as curbing excess
inventory by reducing purchase of products to an appropriate standard, but the consumer mindset is weakening withfewer people prepared to visit shops because they continue to live quietly at home away from infection risks. Thus, theturnover at shops run by companies in our group still face a tough situation.
Consequently, sales were 34.215 billion yen (up 57.8% YoY), operating income was 2.273 billion yen (loss of 6.445
billion yen in the same quarter last year), and ordinary income was 2.578 billion yen (a loss of 6.094 billion yen in thesame quarter of the previous year).
Further, net income attributable to owners of the group’s parent company was 2.431 billion yen (a loss of 10.454 billion
yen in the same quarter of the previous year).
Net sales by reportable segment were as follows.

Apparel-Related Businesses
Based on the medium-term management strategy, TSI Group subsidiaries continued to improve profits by reforming
existing brands and streamlining operations. Amid the need to manage high market value brands that are unique andare price competitive, the Group worked diligently to strengthen its profitability by rolling out products that take fulladvantage of special features in its existing businesses including Jack Bunny!!, a golf apparel brand, UNDEFEATED,
which revolves mainly around sneakers, and Sunspel, a brand licensed from a longstanding U.K. clothing
manufacturer. Despite these endeavors, over-the-counter sales declined. While department stores, shopping centers,
and other retail outlets implemented measures aimed at preventing further spread of the pandemic, this downturn insales reflected the harsh operating environment that impacted operations following the government’s decision to again
declare a state of emergency covering the Tokyo Metropolitan Area and 10 other prefectures in January 2021.
In the e-commerce business, we initiated various measures including the consolidation of in-store inventory to ecommerce stock and continued to upgrade online customer service. Despite efforts to ramp up measures aimed atstrengthening in-store and online coordination and increasing e-commerce activities, sales in apparel-related
businesses increased 58.0% year on year, to ¥33,155 million owing to the substantial impact of COVID-19.

2

Other Businesses
Companies within TSI Holdings’ other businesses include S-Groove Co., Ltd., which in addition to fulfilling a sales
function for Group operating companies engages in paid employment placement and worker dispatching activities,
Toska-Bano’k Co., Ltd., active in the manufacture and sale of synthetic resin related products, Plax Co., Ltd., which
engages in store design and supervision as well as restaurant operations, Laline JAPAN Co., Ltd., which procures andsells a variety of products including cosmetics, perfumes, and soaps, and Urth Caffe JAPAN Co., Ltd., which operates
in Japan a popular organic café in the U.S., California. Net sales in this segment declined 34.0% compared with theprevious fiscal year, to ¥1,233million owing mainly to the continued impact of COVID-19.
(2) Overview of Financial Position(Million yen)
At the end of FY ended
February 2021
(As of February 28, 2021)

At the end of 1Q FY ended
February 2022
(As of May 31, 2021)

Increase/decrease

Total assets

154,951

148,329(6,621)

Liabilities

57,521

47,981(9,539)Net assets

97,430100,348

2,918

Shareholders’ equity ratio

62.6%

67.3%

4.7%

¥1,074.81¥1,106.20¥31.39Net assets per share

Total assets decreased by ¥6,621 million from the end of the previous fiscal year, despite an increase in investment
securities (up ¥566 million). This was mainly due to a decrease in cash and deposits (down ¥7,054 million).
Liabilities decreased by ¥9,539 million from the end of the previous fiscal year due to a decrease in notes and accounts
payable–trade (down ¥798 million) and a decrease in income taxes payable (down ¥1,905 million) and a decrease inother current liabilities (down ¥4,404 million) and a decrease in long-term borrowings (including current portion of
long-term borrowings) (down ¥1,908 million).
Net assets increased by ¥2,918 million from the end of the previous fiscal year due to an increase in retained earnings(up ¥2,431 million) and an increase in foreign currency translation adjustment (up ¥430 million).
As a result, net asset per share increased by ¥31.39.

(3) Explanation of Consolidated Business Forecast and Other Forward-looking Statements
No adjustments were made concerning the business results projection for the year ending 28 February,2022 as reported
in the“Forecast of Consolidated Business Results for the Fiscal Year Ending February 28, 2022” released on 12 April
2021.

3

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheets
Previous consolidated
fiscal year
(As of February 28, 2021)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible asset
Goodwill(Million yen)
Quarter consolidated
accounting period ofcurrent fiscal year
(As of May 31, 2021)

49,871
10,88817,034
544
821
3,594
(39)

42,816
10,885
17,796
280
716
3,980
(45)

82,71476,430

8,149

8,191

5,266

5,252

Other

7,404

7,451

Total intangible assets

12,67012,70428,872
4,980
17,670(106)

29,4394,973
16,716(126)

51,41651,003

Investments and other assets
Investment securities
Investment property
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets

72,237

71,899154,951

148,329

11,607
152
8,915
2,196
1,336
426
126

10,809
153
8,699
290
1,072
472
81

Provision for sales returns
Asset retirement obligations
Other

289
12
10,906

250
25
6,501

Total current liabilities

35,96928,356Retirement benefit liability
Asset retirement obligations
Other

16,082
42
1,040
2,344
2,042

14,389
42
1,009
2,298
1,885

Total non-current liabilities

21,551

19,62457,521

47,981

Total assets
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for point card certificates
Provision for shareholder benefit program

Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors

Total liabilities

4Previous consolidated
fiscal year
(As of February 28, 2021)
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

5(Million yen)
Quarter consolidated
accounting period ofcurrent fiscal year
(As of May 31, 2021)

15,00029,25552,213(3,747)

15,00029,25554,645(3,726)92,72095,174

4,812

4,790

(469)
(86)

(39)
(65)

4,256

4,685

452

488

97,430100,348

154,951

148,329

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly consolidated statements of income
Consolidated cumulative first quarter

Net sales
Cost of sales

Consolidated cumulative
first quarter ofprevious fiscal year
(March 1,2020 to May 31,
2020)
21,682
12,623(Million yen)
Consolidated cumulative
first quarter ofcurrent fiscal year
(March 1,2021 to May 31,
2021)
34,215
15,069Gross profit

9,058

19,145

Selling, general and administrative expenses

15,504

16,872

Operating income (loss)(6,445)2,273

Interest income
Dividend income
Real estate income
Foreign exchange income
Other

5
396
336
92

0
128
47
151
130

Total non-operating income

831

457

50
73
51
154
149

31
4
63
51

479

151

(6,094)

2,578

61
5

4
338
171

67

514

16
889
2,414
-

6
2
574
14

Total extraordinary losses

3,320

597

Income(loss) before income taxes(9,346)

2,495

Income taxes―current
Income taxes―deferred

94
1,053

273
(203)

Total income taxes

1,147

69

Net income（loss）(10,494)

2,426

(40)

(4)

(10,454)

2,431

Non-operating income

Non-operating expenses
Interest expenses
Foreign exchange losses
Loss on valuation of investment securities
Rental expenses on real estate
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss due to temporary closing
Other

Net loss attributable to non-controlling interest
Net income attributable to owners of parent

6

Quarterly Consolidated statements of comprehensive income
Consolidated cumulative first quarter

Net income(loss)
Other comprehensive income

Consolidated cumulative
first quarter ofprevious fiscal year
(March 1,2020 to May 31,
2020)(10,494)(Million yen)
Consolidated cumulative
first quarter ofcurrent fiscal year
(March 1,2021 to May 31,
2021)
2,426

(1,199)
(107)
9

(22)
451
21

(0)

10

Valuation difference on available-for-sale securities

Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income ofaffiliates accounted for using equity method
Total other comprehensive income(1,298)460

Comprehensive income(11,792)

2,887

Total comprehensive income attributable to:
Owners of parent
Non-controlling interests(11,749)
(43)

2,860
26

7

(3) Notes to Quarterly Consolidated Financial Statements

Going Concern Assumption
Not applicable

Notes on Significant Changes in Shareholders’ Equity
Not applicable

Additional Information
Trust-Type Employee Stock Ownership Plan (ESOP)TSI Holdings resolved at a Board of Directors’ meeting held on April 13, 2020 to reintroduce a trust-type employee
stock ownership plan (ESOP) as an incentive plan and part of its efforts to provide benefits for its employees.
i. Overview of the Plan
The Company has established a trust (the Shareholding Association Trust). The beneficiaries of the Shareholding
Association Trust are members of the TSI Employee Shareholding Association (the Shareholding Association) who
have met certain requirements.
The Shareholding Association Trust acquired in advance a number of TSI Holdings shares projected to be acquiredby the Shareholding Association over a five-year period from April 2020 utilizing funds procured through debt
finance. Thereafter, acquisition of the Company’s shares by the Shareholding Association will be undertaken by the
Shareholding Association Trust. Meanwhile, TSI Holdings will guarantee the debt finance undertaken by the
Shareholding Association Trust.
ii. Shares of the Company Remaining in the Trust
The shares of the Company remaining in the Trust are posted as shares of treasury stock in the net assets section
at their carrying amount in the Trust. The carrying amount and number of shares of treasury stock as of the end of
the previous fiscal year under review were ¥325 million for 696,000 shares. And that as of the end of this fiscal year
under review were ¥306 million for 655,000 shares.
iii. Carrying Value of Debt Finance Posted Using the Gross Price Method
As of February 28, 2021: ¥359 million and as of March 31, 2021: ¥359 million,

Board Benefit Trust (BBT)In accordance with a proposal put forward at the Company’s 5th General Meeting of Shareholders held on May
25, 2016, TSI Holdings introduced a performance-linked stock compensation (Board Benefit Trust (BBT)) plan for
its directors and delegated executive officers as well as Group company directors (eligible officers).
i. Outline of the Transaction
Under the plan, the Company’s shares are acquired through a trust using money contributed by the Company asfunds. Eligible officers receive the Company’s shares equivalent to the points granted in accordance with the levelof performance achievement, etc., and money equivalent to the amount of the Company’s shares converted at market
value as of the date of retirement (the Company’s shares, etc.), pursuant to the officer stock delivery regulations.
Meanwhile, the timing of receipt of the benefits of the Company’s shares, etc. by eligible officers shall, in principle,
be upon their retirement from office.
ii. Shares of the Company Remaining in the Trust
The shares of the Company remaining in the Trust are posted as shares of treasury stock in the net assets section
at their carrying amount in the Trust. The carrying amount and number of shares of treasury stock were ¥288
million for 512,000 shares as of the end of the previous fiscal year and ¥285 million for 507,000 shares as of the endof this fiscal year under review.

8Application of tax effect accounting for the transition from the consolidated taxation system to the group tax
sharing system
For the transition to the group tax sharing system established under the “Act for Partial Amendment of the Income
Tax Act, etc. (Law No. 8, 2020) and for items that were reviewed in the non-consolidated taxation system inconjunction with the transition to the group tax sharing system, subject to the treatment of paragraph 3 of the“Application of tax effect accounting for the transition from the consolidated taxation system to group tax sharing
system” (Practical Issues Task Force No. 39, March 31, 2020), the Company and certain domestic consolidated
subsidiaries do not apply the provisions of paragraph 44 of the “Guidance on Accounting Standards for Tax EffectAccounting” (ASBJ Guidance No. 28, February 16, 2018) and calculate the amount of deferred tax assets anddeferred tax liabilities in accordance with the provisions of pre-revision tax laws.)
Non-equity method companies excluded from the scope of application of the equity method because their impact
on the Company's net income/loss (amount corresponding to the Company's equity interest) and retained
earnings (amount corresponding to the Company's equity interest) is not material and their overall importanceis not significant.

Group reorganization (absorption-type merger organized by the Company and 14 consolidated subsidiaries)
At a meeting of its Board of Directors held on December 16, 2020, TSI Holdings resolved to undertake areorganization with the aim of integrating each of its apparel operating companies into a single company over thefollowing three stages, with a scheduled completion date of March 1, 2023.
1. Stage 1: Absorption-type merger between consolidated subsidiaries on March 1, 2021
The Transaction under common control(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company:

SANEI bd CO., LTD.

Business:

Apparel business

Names of the Combined Companies:

SANEI-INTERNATIONAL CO., LTD.
TSI GROOVE AND SPORTS CO., LTD.
nano universe CO., LTD.
anglobal Ltd.
Rose Bud Co., Ltd.
Isolar Co., Ltd.
TSI EC STRATEGY CO., LTD.
TSI PRODUCTION NETWORK CO., LTD.

Business:

Apparel businessii. Date of Business Combination
March 1, 2021 and March 12,2021
iii. Legal Form of Business Combination
Absorption-type merger with SANEI bd CO., LTD., as the surviving company, and SANEIINTERNATIONAL CO., LTD., TSI GROOVE AND SPORTS CO., LTD., nano universe CO., LTD., anglobalLtd., Rose Bud Co., Ltd., Isolar Co., Ltd., TSI PRODUCTION NETWORK CO., LTD., and TSI EC
STRATEGY CO., LTD., as the companies to be merged.
iv. Name of the Company after Business Combination
SANEI bd CO., LTD. (new corporate name: TSI Inc.)v. Other Matters Related to the Transaction
Nine consolidated subsidiaries underpinned by the same internal information systems, human resources,and other systems were the subject of the absorption-type merger.

9(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan(ASBJ) Statement No. 21 issued on January 16, 2019 and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January
16, 2019), the absorption-type merger was treated as an under common control transaction.
2. Stage 2: Absorption-type merger between consolidated subsidiaries on March 1, 2022
TSI Holdings’ Board of Directors resolved to undertake an absorption-type merger with TSI Inc., as thesurviving company, and consolidated subsidiaries Ueno Shokai Co., Ltd., Jack Clothing Co., Ltd., Arpege Co.,
Ltd., Star Joinus Co., Ltd., and And Wonder Co., Ltd., as the companies to be merged on the scheduled date ofMarch 1, 2022.
(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company

TSI Inc.

Business:

Apparel business

Names of the Combined Companies:

Ueno Shokai Co., Ltd.
Jack Co., Ltd.
Arpege Co., Ltd.
Star Joinus Co., Ltd.
And Wonder Co., Ltd.

Business:

Apparel businessii. Date of Business Combination
March 1, 2022 (scheduled)iii. Legal Form of Business Combination
Absorption-type merger with TSI Inc., as the surviving company, and consolidated subsidiaries Ueno
Shokai Co., Ltd., Jack Co., Ltd., Arpege Co., Ltd., Star Joinus Co., Ltd., and And Wonder Co., Ltd., as thecompanies to be merged.
iv. Name of the Company after Business Combination
TSI Inc.
v. Other Matters Related to the Transaction
After promoting the sharing of the same internal information systems, human resources, and other systems,
the aforementioned five combining companies will be subject to an absorption-type merger.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan(ASBJ) Statement No. 21 issued on January 16, 2019 and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January
16, 2019), plans are in place to treat the absorption-type merger as an under common control transaction.
3. Final stage: Absorption-type merger between TSI Holdings and a consolidated subsidiary on March 1, 2023
TSI Holdings’ Board of Directors resolved to undertake an absorption-type merger with TSI Holdings Co., Ltd.,as the surviving company, and TSI Inc., as the company to be merged on the scheduled date of March 1, 2023.
TSI Holdings Co., Ltd. will then change its corporate name to TSI Inc. (provisional name) in accordance withthe absorption-type merger.

10(1) Overview of the Transaction
i. Names and Businesses of the Combining Companies
Name of the Combining Company:

TSI Holdings Co., Ltd.

Business:

Apparel business

Name of the Combined Company:

TSI Inc.

Business

Apparel businessii. Date of Business Combination
March 1, 2023 (scheduled)iii. Legal Form of Business Combination
Absorption-type merger with TSI Holdings Co., Ltd., as the surviving company, and TSI Inc., as thecompany to be merged.
iv. Name of the Company after Business Combination
TSI Holdings Co., Ltd. (new corporate name: TSI Inc. (provisional name))v. Other Matters Related to the Transaction
By implementing these mergers in stages, plans are in place to lower the break-even point by streamlining
the organizational structure by reducing the overlapping functions of each Group company, increase thespeed of business through an organizational structure suitable for the digital age, and reform the mindset
and culture by integrating the structure, functions, and rules through corporate integration.
(2) Overview of the Accounting Treatment Applied
Pursuant to the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan(ASBJ) Statement No. 21 issued on January 16, 2019) and the “Guidance on Accounting Standard for Business
Combination and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10 issued on January
16, 2019), plans are in place to treat the absorption-type merger as an under common control transaction.

11

Segments of the Company and Related Information
1. Consolidated cumulative first quarter of previous fiscal year (March 1,2020 to May 31, 2020)(1) Net sales, income or losses, assets and other items by reportable segments
Reportablesegment
Other
Total
Note 1
Apparel-related
businesses

Adjustments
Note 2

Consolidated
financialstatements
amount(Note 3)

Net sales
Sales to third parties

20,924740

21,665

16

21,682

66

1,128

1,195

(1,195)―20,991

1,869

22,860(1,178)21,682(6,589)(92)(6,681)

235(6,445)Inter-segment sales or transfers
Total
Segment income (loss)
Notes:

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income (loss) adjustment of ¥235 million is transaction offsets among consolidated companies.
3. Segment income (loss) is adjusted to operating income listed in the consolidated financial statements.
(2) Goodwill or impairment loss in non-current assets by reportable segments

Important impairment loss in non-current assets
In segment apparel-related businesses, book value of the stores which are decided to close, and whose operating
income are continuously in red, and whose brands are decided to close, are supposed to be reduced to recoverable
amount. And the decrease is posted as impairment loss in the extraordinary losses section.

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None

12

1. Consolidated cumulative first quarter of current fiscal year (March 1,2021 to May 31, 2021)(1)Net sales, income or losses, assets and other items by reportable segments
Reportablesegment
Other
Total
Note
1
Apparel-related
businesses

Adjustments
Note 2

Consolidated
financialstatements
amount(Note 3)

Net sales
Sales to third parties

33,1291,072

34,201

13

34,215

66

161

187

(187)

―

33,155

1,233

34,389(174)

34,215

2,523

(22)

2,500

(227)

2,273

Inter-segment sales or transfers
Total
Segment income (loss)
Notes:

1. Other, which doesn’t belong to respective reportable segments, includes synthetic resin-related, store design andmanagement and so on.
2. Segment income (loss) adjustment of ¥235 million is transaction offsets among consolidated companies.
3. Segment income (loss) is adjusted to operating income listed in the consolidated financial statements.
(2)Goodwill or impairment loss in non-current assets by reportable segments

Important impairment loss in non-current assets
None

A significant change in the amount of goodwill
None

A significant gain from negative goodwill
None13