FY2014 – FY2016
Medium-Term Management Plan Summary
May 20, 2013
Wacoal Holdings Corp.

1

Contents■ FY2011 – FY2013, Previous Medium-Term Management Plan Review

Page3-6■ FY2014 – FY2016, Medium-Term Management Plan Summary◆Corporate Profile
Page7-8◆Backdrop to Preparation of Medium-Term Management Plan
Page9
◆ Group’s Medium-Term Management Strategies
Page10◆Medium-Term Management Plan—Quantitative Targets and Tasks Page11-12◆ Priority MeasuresPage13-17(Wacoal Corp., major overseas subsidiaries, Wacoal Eveden Limited,major domestic subsidiaries)◆ Creating Mutual Trust with Society
Page18◆ Shareholder Returns Policy
Page19■ Reference Information◆ Net Sales and Operating Income Targets by Segment◆ Net Sales and Operating Income Targets by Subsidiary◆ Net Sales Targets for Business Divisions of Wacoal Corp

Page22
Page23
Page242

FY2011 – FY2013 (April 1, 2010 – March 31, 2013)
Previous Medium-Term Management Plan Review

3Review of Previous Medium-Term Management Plan
(April 1, 2011-March 31, 2013)—Quantitative Targets■ Net sales and operating income(¥ billion)

Net sales

180

Operating income(¥ billion)

16

178

14

176
174

12

172

10

170

8

168

6

166
164

4

162

2

160

0

● Net sales target: ¥190 billion or higher Did not reach target● Operating income target: ¥8 billion or higher
 Reached target ahead of schedule

4

Review of Previous Medium-Term Management Plan
(April 1, 2011-March 31, 2013)—Priority Measures
Wacoal Business (Japan)● Improved profitability by restructuring innerwear wholesale operations
 Improved earnings by reducing varieties for each product, curbing development man-hours, andlowering returned product rates● Advanced businesses to establish new pillars of sales
 Retail business: Became pillar of growth area

 Wellness Business: Did not reach target

 Internet store: Did not reach target eventhough mall introduction succeeded Men’s innerwear business: Sales decreased
significantly● Established unshakable position in Japan’s innerwear market
 Ｉnvigorated market
by promoting aging concept

 Undertook new rollouts in high-volume market● Reduced expense and heightened productivity
 Achieved reduction by reforming external expenditure and increasing personnel
efficiency
 Although improved logistics efficiency in Japan and reorganized some operating bases in Tokyo
metropolitan area, benefit will emerge in current period

5Review of Previous Medium-Term Management Plan
(April 1, 2011-March 31, 2013)—Priority Measures
Wacoal Business (overseas)●Americas Business: Net sales: ¥11.6 billion (US$141 million), operating income: ¥1.43 billion
Business results improved due to business development in surrounding countries, contribution fromInternet sales, and solid performance in mainstay department stores sales channel.

● China business: Net sales: ¥6.6 billion (CNY528 million), operating income: −¥350 million
 Accelerated store openings in interior region but profitability worsened, shifted to emphasis on
earnings● Developed new markets
Acquired Eveden of U.K., obtained business pillar in Europe, contributed ¥7.2 billion to sales*

Peach John, Lecien* Included in consolidation for nine months from April
to December 2012

● Peach John: Net sales: ¥12 billion, operating income: ¥330 million
 Became profitable but did not reach target due to lackluster performance of outerwear and sundries
and inventory mismatches● Lecien: Net sales: ¥11.8 billion, operating income: ¥320 million
 Focused on reducing expense and succeeded in becoming profitable, but fell significantly short ofsales target

6

Summary of Medium-Term Management Plan
(April 1, 2013 – March 31, 2016)7

Corporate Profile
A stronger global presence for the Wacoal Group
Stronger global presence means…
● Wacoal Group’s products and services earn strong trust from customers in markets
worldwide● Countries and regions in which Group is developing businesses continue to increase● Coordinating business development on global scale based on Group’s network● Rolling out innovative products in markets worldwide consistently, continuing to develop
innerwear culture area
● Group’s goals and management philosophy instilled in personnel worldwide

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Backdrop to Preparation of Medium-Term Management Plan
—Future Market Conditions
Although there are contraction factors in Japan’s market, seizing growth
opportunities amid change overseas and in Japan is possible.
Japan

Overseas

Consumer market contraction andDiversifying consumption structure

Asia’s market grows
Western markets have scope for development【 Envisioned changes in conditions】● Consumption shrinks due to declining
population and deindustrialization● Disposable income decreases due to risingconsumption tax and increased social welfare burden● Senior market expands due to society’s
accelerated aging● Brisk high-end product sales due to wealtheffect● Diversification of purchasing behavior due to
distribution changes【 Envisioned changes in conditions】● China’s and ASEAN’s middle class and wealthyclass increases● U.S. stays on economic recovery track● Europe challenging overall, but large markets
centered on U.K. and Germany promise pick-up

Due to higher wages and cost of living, rise in production cost in Asia, which weak yen spurs further
Raw material suppliers shift to Asia, product appeal declines comparatively due to difficulty of transferring
technology
Companies using progress of EPAs and FTAs to establish international system for division of labor enjoy
cost competitiveness

9Group’s Medium-Term Management Strategies
Evolve into Global Company
Aim to expand business in Japan, Americas, Europe, China, and Asia

Strengthen Group’s
comprehensive
capabilities
Combine assets, brands,
expertise, capabilities ofcompanies in Japan andoverseas effectively

Strengthen profit
structure

Build mutual trust withsocietyPursue overall management
integration for inventory, sales,and manufacturing (PSI)
rigorously and improvecompanies’ operating margins

develop business activities fairly
at each operating base, market
products customers want

Reconfirm and implement management
philosophy
Share throughout the whole Group values that should be
upheld, even amid challenging conditions

10

Medium-Term Management Plan
—Quantitative Targets and Tasks
Medium-Term
Strategy

Quantitative
Targets● Reconfirm and implement management philosophy● Strengthen Group’s comprehensive capabilities throughcollaboration among companies in Japan and overseas● Strengthen business management system
to enable response to changing conditions● Develop into a global company● Build mutual trust with society

Aiming for operating margin of at least 7%
FY2016 Net sales: At least ¥200 billion, operating income: At least ¥14 billion

Tasks
Cater to Japan’s diversifying women’s
innerwear market, achieve sales andearnings targets

Increase sales and earnings overseas

Rebuild Group’s manufacturing system
Develop presence in growth areas
outside Japan’s women’s innerwear
business●Secure and develop points of contact with customers●Hone products’ strengths●Have Wacoal, Peach John, and Lecien grow sales in their target markets●Strengthen organization in Europe centered on Eveden, build robust earnings
foundations●Recover market share in Americas’ high-end segment, maintain high earnings bydevelopment new sales channels●Shift emphasis in China from increasing sales to earnings, penetrate middle-classcustomer group●Redeploy Group’s manufacturing resources in Japan and overseas●Shift manufacturing capabilities from China to ASEAN●Develop raw material supply sources and localize purchasing centered on ASEAN●Develop positions for Wellness Business and men’s innerwear business with view
to medium-to-long-term growth

Develop entire Group’s business managementfoundations and infrastructure

Enhance each individual’s productivity

11

TasksIdentify Targets Wacoal Group Has Not Exploited Fully

Areas where market share not acquired●Prefectures where share of store sales is low●Prefectures where only one department store●Prefecture where no directly managed storesAge groups for which market
share not acquired●Low share of teenage market●High share of 50s and 60s market, but apparelchain stores, etc. growing

Price ranges for which market
share not acquired

Scope from view point ofoverseas sales●¥2,000 price range (high-volume market) is weak●Overseas sales are approx.
30% (including joint ventures)●Scope in West and China relative to GDP

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Priority Measures—Wacoal Corp.
① Build business foundations
Realize leadership within Group② Develop points of contact
with customers

Expand target customers,
develop sales channels andbusiness models

Respond to changing
conditions and secure
earnings, heighten
operating margin③Exploit markets further
Attract customers into highvolume market fromlow-end market④ Respond to changing conditions⑤ Take on challenge of growth areas

Restructure manufacturing area,
identify and dispose of inventory on
Companywide level

Redevelop Wellness Business andmen’s innerwear business

FY2016: Net sales target: ¥116 billion , operating income target: ¥7.4 billion
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Priority Measures—Wacoal Corp.
Aim of Measure

Developpoints ofcontact withcustomers

Exploitmarkets

Respond tochanging
conditions

Take on new
growth areas

Target and KPIs
●Claim market share in regions
Share of stores nationwide improve 5%●Strengthen entry-level and senior
customer groups
Entry-level generation sales volume 1.5
million units
Senior generation sales ¥16 billion●Expand lineups for high-volume market
Store sales of directly managed stores
Increase 30%
Store sales of wholesale channel
Increase 20%●Restructure manufacturing area
Offset risk of manufacturing cost hikes
Maintain gross profit margin of innerwear
business in Japan●Companywide inventory control
Ratio of inventory to sales Reduce to 10%●Take on new growth areas
Wellness Business net sales: ¥9 billion →¥10.8 billion
Men’s innerwear business gross profit margin:
16% → 25%

Specific measures●Build system straddling sales channels and brands●Develop business models able to generate earnings
even from low sales●Develop products by strengthening Human Science
Research Center●Ensure integration of all companies’ strategies●Develop formats for suburbs and adults●Develop high-volume market for seniors●Continue strengthening existing brands●Introduce common patterns and specifications,increase internal production rate
●Shift manufacturing capabilities to ASEAN(Cambodia, Myanmar)●Increase overseas materials purchasing rate
●Adjust plans through inventory control system,encourage disposal●Leverage innerwear division’s resourcesand expertise●Attract new customers by expanding product lineup

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Priority Measures—Major Overseas Subsidiaries

TargetExpand sales and earnings
Enhance operating margin

WacoalAmerica

FY2016: Net sales:¥16 billion
Operating income: ¥1.7 billion
Assumed exchange rate: US$1 = ¥95* WIC sales

Shift emphasis to profitability
Achieve profitability by FY2016

WacoalChina

FY2016: Net sales:¥10 billion
Operating income: ¥0.3 billion
Assumed exchange rate: CNY1 = ¥15* Wacoal China sales

Specific measures●Recover share of high-end segment in U.S.
department stores●Foster Internet sales, Canada, and Brazil sales
channels●Share sales channels mutually with Eveden●Examine improving SCM efficiency (plants andmaterials purchasing)●Curb new store openings, use sales agencies●Reduce manufacturing cost by controlling inventory
rigorously and heightening technological capabilities●Differentiate through functional products●Foster LA ROSABELLE as brand targeting
middle class15

Priority Measures—Wacoal Eveden
TargetCentered on Europe business, contribute to stronger global presence
for the Wacoal GroupFY2016: Net sales: ¥14 billion
Operating income: ¥1.7 billion
Assumed exchange rate: GBP1 = ¥140

Specific measures●Group measures for increasing sales in each region or country【Americas】 Share sales channels mutually with Wacoal America (WIC)【Europe】 Strengthen sales system, sell Wacoal brand in Eveden’s existing sales channels【Asia】 Introduce distinctive brands through local Wacoal subsidiaries【Japan】 Introduce distinctive brands through Internet and imported-products sales channels【Oceania】 Sell Wacoal brand in Eveden’s existing sales channels●Product and Brand-Building Measures
・Intensify brand investment by revising brand positioning in light of characteristics ofcountries and sales channels
・Increase efficiency through full utilization of Group’s manufacturing bases andconsolidating materials suppliers

16Priority Measures—Major Domestic Subsidiaries

TargetRebuild customer base
Increase sales

Peach John

Break-even point lowered by reducing fixed cost
Strive for sales recovery over coming three years
FY2016:

Net sales: ¥13.6 billion
Operating income: ¥0.9 billion* Peach John domestic

Provide infrastructure supporting
Group strategy
Maintain profitability

LecienOffset effect of exchange rates and maintainprofitability while providing bridgehead for
expansion in high-volume market

Specific measures●Capture new customers and prevent loss ofcustomers by reorganizing product brands●Attract customers by reorganizing Internet sales
and through TV commercials●Prevent product shortages through appropriate
order plans and inventory control●Open new directly managed stores●Achieve profitability in China business (pricing
policy, reduce personnel)【Product business】●Strengthen OEM solutions capabilities, expand
and improve product lineup●Pass on higher manufacturing cost to prices●Stabilize operations of Cambodian plant●Localize materials purchasing【Materials business】●Strengthen planning capabilities●Bolster competitiveness through off-season
manufacturing and use of ASEAN

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Creating Mutual Trust with Society
Aiming To Remain a Trustworthy Company in the Eyes of Society

Organizational governanceParticipation in communities
・Social contribution initiatives
・Engagement with local
communities
・Wacoal breastcare activities
・Cultural and educational
initiatives

・Corporate governance・Compliance
・CSR management

Human rights
・Respect for individuals
・Prohibition of discrimination
・Policy on personal rights

Labor practices
Catering to customers
・Personnel utilization anddevelopment・Respect for diversify
・Health and safety

・Quality control standards
・Consultative sales
・Human Science Research Center

Fair business practices

Environment

・Wacoal’s Action Agenda
・System for Accreditation andRegistration of Inspection
Institutions of Wacoal Suppliers
・Corporate Ethics Hotline

・Environmental policies and goals
・Environmental initiatives
・Management system

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Shareholder Returns Policy●Our basic policy is to pay stable dividends in light of consolidated businessresults, while enriching internal funds to strengthen the Company’s profitability andenable future business development.
●Further, while cash dividends are the primary method, we intend to acquireand cancel treasury stock flexibly.
●With a view to establishing stable business management foundations for the
long-term, we will use internal funds to invest in enhancing product appeal anddeveloping manufacturing and sales systems as well as in growth businesses aswell as new businesses.

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Reference Information

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Reference Information■Net Sales and Operating Income Targets by Segment
Unit: ¥ million
FY2013
Net sales
Amount

FY2016

Operating income

Year on year

AmountYear on year

Net sales
AmountOperating income

Vs. FY2010

AmountVs. FY2010

Wacoal business (Japan)

115,657

100%

8,423

103%

119,000

103%

8,500

101%

Wacoal business (overseas)

23,081

108%

1,430

99%

32,000

139%

2,400

168%

Peach John business

11,97287%△2,701－

13,600

114%

1,000

－

Other

26,444

127%

947

401%

35,400

134%

2,100

222%

Total

177,154

103%

8,099

78%

200,000

113%

14,000173%

Note: Figures for respective items are after consolidation adjustment.
Note: Major subsidiaries belonging to each segment are as follows.
◆ Wacoal business (Japan): Wacoal Corp., Une nana cool Corp.,Linge Noel Corp.,, Torica Inc., domestic sewing
companies◆Wacoal business (overseas): Wacoal International Corp. (U.S.A.), Wacoal France S.A., Wacoal Hong Kong Co., Ltd.,
Wacoal China Co., Ltd.
◆Other: Wacoal Eveden Limited, Nanasai Co., Ltd., Lecien Corporation
Note: Operating income of the Peach John business (for fiscal 2013) includes impairment loss and depreciation of intangible
fixed assets.
Note: Operating income of other businesses includes depreciation of Eveden’s brands.

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Reference Information■Net Sales and Operating Income Targets by Subsidiary Unit: ¥ million
FY2013
Net sales
Amount

FY2016

Operating income

Year on year

AmountNet salesYear on year

AmountOperating income

Vs. FY2010

AmountVs. FY2010

Wacoal112,224

99%

6,487

103%

116,000

103%

7,400

114%

Peach John

12,204

87%

333

47%

14,500

119%

1,050

315%

LECIEN

11,75885%323

14,000

119%

150

46%

Nanasai

9,684

100%

257

182%

10,000

103%

200

103%

Une nana cool

4,078

105%

48

86%

4,900

120%

140

292%

Wacoal International (U.S.A.)

11,631

111%

1,434

129%

16,000

138%

1,700

119%

Wacoal China

6,625

110%

△346

10,000151%

300

Wacoal Hong Kong

1,895

95%

92

3,000

158%

180

196%

EVEDEN

7,203

－

212

－

14,000

194%

1,700

802%

Other, consolidation elimination
and adjustment

△148

－

△741

－

△2,400Total

177,154

107%

8,099

－

－
70%

78%

200,000

－
113%

1,180

－

－

14,000Note: Figures for respective items are before consolidation adjustment.
Note: Year-on-year comparisons are not possible for Eveden because it was only included in consolidation for the ninth
months from April to December 2012.
23

173%

Reference Information■Net Sales Targets for Business Divisions of Wacoal Corp.
Unit: ¥ million

FY2013

FY2016

Net sales

Sales share

Net sales

Wacoal Brand Business Department

58,99353%

59,00051%

100%Wing Brand Business Department

27,59925%

27,60024%

100%

Retail Business Department

12,434

11%

14,80013%

119%Wellness Business Department

8,305

7%

9,900

9%

119%

Catalog Sales Business Department

5,913

5%

6,000

5%

101%

Other, intersegment transactions△1,020－△1,300－－112,224100%

116,000

100%

103%

Total

Sales share Vs. FY2013

Note: Figures for respective items are before consolidation adjustment.
Note: Results for fiscal 2013 have been adjusted to reflect reorganizing of business divisions.

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Information within this document with respect to business plans,
forecasts, strategies and other statements, including businessperformance figures, is based on Wacoal's assumptions in thelight of the information currently available, and in no way
precludes the uncertainties and risks inherent in theseforward-looking statements. Furthermore, actual businessresults may, as a result of numerous factors, differ significantly
from those expressed in statements in this document.

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