“J. Front Retailing and Parco joint press conference”
regarding the commencement of tender offer (TOB) for shares of Parco

Q & A summary
Date and time: 17:30 – 18:30 on Thursday, December 26, 2019

Q. What is the background of today’s announcement?
A (Mr. Makiyama):
Mr. Yamamoto gave me a Zen phrase “saitaku doki,” which means that when a mother birdsensed that her baby bird was about to hatch and starting pecking from the inside, she would
peck from the outside. J. Front Retailing Group has grown understanding about the strengths ofParco and heightens the momentum toward growing business with Parco. We received a written
proposal from J. Front Retailing in August this year and understood that it is good timing, which
resulted in today’s announcement.
A (Mr. Yamamoto):
We have discussed to work together in terms on business and systems since we became theparent company of Parco in 2012. As a result, Parco opened in Ueno Frontier Tower and will
open in the north wing of the Shinsaibashi store, which is scheduled to open in fall 2020. The
presence of Parco is important in the Group strategy and we have come to understand that it candifferentiate ourselves from competitors. The capital and business alliance agreement weentered into in 2012 contains a standstill provision. Therefore, we could not discuss
capital-related matters and sought synergy in terms of business. While we better understood thespirit of innovation of Parco and its excellent human resources, the standstill provision expired.
After that, J. Front Retailing had discussions of the future and the time is ripe.
Q. How about collaboration with Parco in the credit and finance area in terms of the futurebusiness synergy?
A (Mr. Yamamoto):
It is essential for retailers to improve customer base. We have a “Lifetime Service Hub plan”
and we will integrate and use the customer information of Parco. Other matters are to bediscussed.
Q. Will the current medium-term business plan change due to this TOB? By centralizing thereal estate business, will there be a new development that is not included in Parco’s
medium-term plan?
A (Mr. Yamamoto):
When considering the next medium-term plan, we will discuss concrete matters with Parco. I
feel Parco has superior real estate skills and ability to collect information. By transferring the realestate business to Parco, we will improve revenue. Concrete matters are to be discussed.
Q. I think synergy will be generated unless Parco becomes a wholly-owned subsidiary. Will
you convert Parco into a wholly-owned subsidiary to cancel the “parent-subsidiarylisting.”
A (Mr. Yamamoto):
Parent-subsidiary listing is a general problem but our purpose is not to cancel it. As I explainedat the beginning, we need to respond more quickly to changes in customers to improve
performance in rapidly changing times. We have made this decision for more rapid decision
making and speedy management.
Q. How will you maintain uniqueness of Parco?
1A (Mr. Makiyama):
The origin of Parco is Shibuya Parco and the new Shibuya Parco enjoys a high reputation.
Parco’s social roles are “Urban Revitalization,” “Incubation” and “Trends Communication” andParco is responsible for creating and bringing to life “new happiness,” which is the vision of J.
Front Retailing Group, for most advanced urban people. I think we will be able to accelerate
Parco’s uniqueness in J. Front Retailing Group.
Q. How will you answer when a shareholder asks, “Was the purchase amount lower than
¥6.6 billion if you launched TOB immediately after the standstill provision expired?”A (Mr. Yamamoto):
I myself think this is the best time for the Group to further grow and develop in the future.
Q. You mean that whether the current share price is high or low does not matter and that thisis the time for both companies to mutually maximize corporate value in the future. I hope
you will improve corporate value so that it will brush off the criticism that the purchaseamount was high.
A (Mr. Yamamoto):
This is the “saitaku doki.” We would like to improve corporate value by making good use of themanagement resources of two companies.
Q. The Group’s big project (the north wing of the Shinsaibashi store) will be completed soon.
So, on the contrary, isn’t it too early? You will transfer the real estate to Parco and how will
you position Ginza Six?
A (Mr. Yamamoto):
We will steadily proceed with the project. Regardless of that, however, we assessed the timingand made a decision. As I explained at the beginning, the business environment surrounding twocompanies faces a significant change and we need to make decisions more quickly than ever.
What part of the real estate business and how we will transfer are to be discussed between
Daimaru Matsuzakaya Department Stores and Parco.
Q. What impact will this TOB have on PL and BS?
A (Mr. Yamamoto):
It will have almost no impact on PL for the current period. Impacts on BS include an increase ininterest-bearing liabilities and a decrease in shareholder equity. As for CF, there will be changes
within financial CF. (Proceeds from borrowings and payments for acquisition of shares are thesame amounts.)
Q. What are the advantages of delisting for Parco?
A (Mr. Makiyama):
Shareholder-related services will be centralized in the parent company and we can focus on
our business. Many of our employees joined the company after listed. So I will properly explain to
our employees that they will have new stages and various growth opportunities, which will makeit easy for each of them to achieve self-fulfillment.
In Shibuya Parco, employees in their 30s and 40s use sensitivity freely. Parco’s strength is towell combine such sensitivity by working with each other. I think the environment where we canfocus on our business will create an environment where it is easy for people to work together andachieve self-fulfillment.
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