


WACOAL HOLDINGS INTEGRATED REPORT 2023

Prologue03 The WACOAL Way
05 Wacoal Group History
07 Progress in Value Creation

Transformation
11 A Word About the Revised Medium-Term
Management Plan

15 A Message from the President

09 Wacoal Group’s Competitive Advantages
10 About Our Businesses

23 Revised Medium-Term Management Plan
Overview and Strategy

27 Value Creation Process
29 Material Issues to be Addressed by 2030

Corporate Information (As of March 31, 2023)
Company Name Wacoal Holdings Corp.

Line of Business

Wacoal’s mainstay business is the manufacture, wholesale, and direct

Head Office

29 Nakajima-cho, Kisshoin, Minami-ku, Kyoto 601-8530, Japansales to consumers (for some products) of intimate apparel (mainlyFounding

June 15, 1946

women’s foundation garments, lingerie, nightwear, and children’s

Establishment

November 1, 1949

underwear), outerwear, sportswear, and other textile products andCapital¥13,260 million

accessories. In addition, Wacoal operates other businesses related toRepresentative Director, President and CEO Masaaki Yajima

food, culture, services, and interior furnishing of shops.
Number of Employees (Consolidated)
19,147 (Excluding the average number of part-time employees)

01 ■ WACOAL HOLDINGSESG
31 Major Items of the Revised Medium-Term
Management Plan (Domestic Business)

31 Domestic Business Strategy(A Message from Wacoal Corp. President)

51 Initiatives to Reinforce Human Capital
55 Actions for the Environment
57 Human Rights Initiatives
58 Fulfilling Social Responsibilities along Our
Supply Chain

35 Key Initiatives in Wacoal’s Revised Medium-Term

GovernanceManagement Plan

37 Marketing Reforms
41 Major Items of the Revised Medium-Term Management Plan

59 Interview with an External Director(Overseas Business)

41 Key Initiatives in the Revised Medium-Term
Management Plan (Overseas Business)

43 Global Initiatives
45 Major Items of the Revised Medium-Term Management Plan
(Financial Strategy)

45 A Message from the Director in Charge of Finance

63 Management Team
65 Corporate Governance
71 Engagement (Establishing Mutual Trust
Through Dialogues)

50 Introducing ROIC Management

73 Investor Information / Our Corporate Website

Editorial Policy

Forward-Looking Statements

In accordance with international norms for integrated reporting, the Wacoal GroupStatements contained in this integrated report that are not historicalhas been issuing integrated reports since fiscal 2011 as part of its communication

facts are forward-looking statements, which reflect the Company’swith shareholders and other investors. This integrated report explains the Wacoal

plans and expectations at the time of writing. These forward-looking

Group’s value creation activities not only through financial information but also

statements involve known and unknown risks, uncertainties, andthrough nonfinancial information about unique, significant assets and other facets ofother factors that may cause the Company’s actual results,

the Group’s business.

performance, or achievements to differ materially from those

Further, the website of Wacoal Holdings Corp. includes a wide range ofanticipated in these statements.

information about the Group. We hope that referring to this integrated report in

Note: Pursuant with the adoption of the International Financial

conjunction with the website will further understanding of the Group. Going

Reporting Standards, “sales revenue” has been used for fiscal 2023

forward, we will continue pursuing an editorial policy that responds to changes inand fiscal years thereafter, while “net sales” has been used for fiscal

reader expectations.

2022 and earlier fiscal years.

INTEGRATED REPORT 2023

■ 02

The WACOAL WayWACOAL empowers people with the confidence
that comes from looking and feeling their best.
As a global leader, we welcome everyone into
our caring community built on mutual respect,
diversity, and inclusion.

At WACOAL, we value each person as an individual andbelieve in nurturing the body and mind so everyone can be their best.
When people with different backgrounds are empowered to cometogether and share ideas freely, we as a society will achieve true harmony.
By continuing to evolve, WACOAL leads the way to a world
where kindness, inclusivity, and mutual respect are the standards,
and the future is full of promise for everyone.

Comfortable inside. Confident outside.

03 ■ WACOAL HOLDINGSWacoal Group’s Social Mission
The Wacoal Group’s social mission is to contribute to the rich life of people throughout the worldby helping them “be themselves,” which includes not only uniform exterior beauty but also interior
beauty. The Group aims to become indispensable for society by building mutual trust with all
stakeholders based on this mission and its founding principles, which we have carried on for the
more than 70-year history of the Company.

Founding Principles
Our Promise

Our Culture

Our Value

We will contribute tosociety by helping
women to express
their beauty.

We, the employees and management of
WACOAL, will maintain a refinedcorporate culture based on mutual trust
and will continually strive to make theCompany a global leader in the industry.

1. Create products loved by customers
2. Develop new products that meet the needs of the times
3. Conduct business in a fair manner with a forward focus
4. Build a better WACOAL through better human resources
5. Fear not failure and boast not of success

INTEGRATED REPORT 2023

■ 04

Wacoal Group History

With a strong desire to devote his life to working for society, Koichi
Tsukamoto founded Wacoal based on the belief that “a peaceful society is
one where women can express their beauty.” His goal was to contributeto society by helping people to express their beauty. In achieving this goal,
business management based on mutual trust is essential. The Group has
overcome numerous hardships over its long history based on its founder’sstrong commitment to creating a company trusted by all stakeholders.

Establishing the businessFounding

Koichi Tsukamoto Founder

Koichi Tsukamoto, who had miraculously survived World War II’s harsh battles, returned to his home in
Kyoto on June 15, 1946, and started a business dealing in women’s personal ornaments that very day.
This is the date of Wacoal’s founding.
The Company’s initial trade name was Wako Shoji. In 1949, Tsukamoto’s strong desire to “helpJapanese women express their beauty” and an encounter with “bra pads” brought about a decisive turnin the business. Thus Wako Corp.¸ incorporating a global perspective, was established as amanufacturer of women’s western underwear

a corporate culture Establishingbased on mutual trust

Koichi Tsukamoto at the wall of trust

In 1962, labor-management relations were a major issue. Wacoal founder, Koichi Tsukamoto, was deeply
moved upon hearing a lecture given by the President of Idemitsu Kosan, Sazo Idemitsu. Tsukamoto,thinking, “If we are going to talk about respect for human beings, firstly, the president must have faith in
the union.” So, he acted decisively to establish a “corporate culture of mutual trust” by entrusting
employees to make their own decisions regarding matters such as arriving late and leaving early. Thisaction revitalized the mood within the Company and served as a foundation for generating further growth.

Establishing the Research and Development CenterThe start of human science research
To create products that perfectly fit the body shape of Japanese women, the Company establisheda Product Research Department in a building that was newly opened in Asakusabashi, Tokyo, in
1964. There, the Company started full-scale research and measuring the body shapes of Japanesewomen based on ergonomics. In addition to establishing a brassiere size system, anthropometricdata were collected, and based on that, the ideal female body shape was expressed in numericalform. The Product Research Department eventually developed into the Human Science ResearchCenter, and in addition to collecting body shape data, the Center has expanded its areas ofresearch to include comfort, health, and movement.

Anthropometry in the late 1960s

05 ■ WACOAL HOLDINGSJapan sales


Developing the mass retailer channel
Starting the directly managed store businessOpening sales channels
in department stores

In the 1970s, mass retailers overtook
department stores in clothing sales and grew
into huge distribution channels. It was a turning
point for the Company when mass retailers
began to shift from selling large quantities ofgeneric products to offering bargain sales onnational brands. As a result of continued
negotiations with major mass retailers, thenational brand Wing was displayed in thelingerie sections of mass retailers on thepremise that dedicated sales corners would beestablished and listed prices respected.
Wing sale counter at mass retailer

Sales counter at Takashimaya Kyoto StoreIn 1950, Wacoal opened its first women’s
underwear sales counter in a department
store at the Kyoto branch of Takashimaya.
Seizing upon the opportunity presented by
women in Japan undertaking a big shift
from Japanese to western clothing, Wacoal
started designing women’s westernunderwear and manufacturing it at its own
factory. During this period of high economic
growth and an increasing interest in fashionand life quality demonstrated by women,
the Company produced various products
to meet their needs.

With the relative status of department
stores and mass retailers declining andthat of fashion-oriented buildings,
station buildings, and shopping malls on
the rise, in 2001, Wacoal opened its first
SPA-style directly managed store,
Subito, in Harajuku, Tokyo. Since then,the Company has opened a series ofstores in various styles that are tailoredto specific customer bases and store
locations as it continues to take on thechallenge of increasing customer footfall.
Directly managed store AMPHI

Overseas sales

Building where Wacoal America’s office is locatedoverseas Expanding
markets
earnest desire for Anprofitability in the US
full-scale development Startingin the European market

The fashion show of Wacoal Europe

In addition to establishing Wacoal America Inc. (currently Wacoal
International Corp) in the United States in 1981 and Wacoal Hong
Kong Co., Ltd. in Hong Kong in 1983, Wacoal also became the firstJapanese apparel company to set up a joint venture in China. By
developing a unique overseas business model rooted in local areas,
the foundation for a global Wacoal was being laid.
After entering the U.S. market, the Company’s performance
stagnated for many years because of bloated inventory and SG&A
expenses. Even so, Wacoal improved quality at its plants while
maintaining listed prices and a commitment to sales throughconsultations with beauty advisors, and in 1995, it achieved
profitability for the first time.

In 2012, aiming to expand the European business,
Eveden Group Limited (currently Wacoal Europe Ltd.),
a company with multiple brands suited to a wide
range of body shapes and sizes and headquartered in
the UK, was made a wholly-owned subsidiary. Fromthat point on, Wacoal’s presence in the UK and the EU
grew significantly. The Company is completing
post-acquisition reorganization and building a stronger
revenue through such activities as reviewing the brandportfolio. Having completed a post-acquisition
reorganization, the Company is building a stronger
revenue base by reviewing the brand portfolio.

INTEGRATED REPORT 2023

■ 06

Progress in Value Creation

Since its foundation, the Wacoal Group has developed and evolved innerwear from the aspects of comfort, body
contouring, and fashion with the goal of making people beautiful. Behind this evolution were changes in women’s
consciousness as expressed in trends, and technological innovations to respond to these changes. Customers’
values have changed dramatically, and we are now in an era in which every one of us seeks beauty that is uniquely
our own. We will continue to create new customer experiences and contribute to the enrichment and beauty ofcustomers around the world.

s

s

s

The Tokyo Olympics were held and amidst

Street fashion became popular,

The fitness craze led to a trend toward

a period of rapid economic growth, thesee-through and nude fashions appeared,body-conscious fashion, which takes themini-skirt boomed. It was a time ofand a trend toward enjoying fashion morelines of the body into consideration.

liberation among women who desired

freely emerged. Based on research into the

Shaping bras are also developed to suit

independence. It was also a time of great

body and the development of new

different lifestyles.

change in underwear with the advent ofmaterials, soft bras that flexibly correct theelastic materials.

body and bras that express naturalroundness appeared on the market.

Sofy & Sofy

Stretch Bra

Shaping Bra

Wing Bra

Sofy Magicky Bra

Seamless
Cup BraShaping Panty

07 ■ WACOAL HOLDINGS

s

s

s

Changes in body consciousness continued

From the 2000s, the desire to live more

As expressed in the term “body positivity,”

into the 1990s. With women’s growing

naturally and in comfort emerges. People

this is an age in which each one of us

desire to look more beautiful, hit products

became aware of their own unique lifestyles

seeks to realize our own unique beauty.

such as the Good Up Bra followed.

and began to diversify. Bras continue to

We will continue to pioneer the realm of

evolve, aiming for both beauty and comfort.

underwear culture and aim for further
growth by providing services and value in
response to the changing needs of ourcustomers, utilizing measurement data
and data obtained from our 3D
measurement services.

Comfort Bra

Good Up Bra

Magical Top Bra

Night Up Bra

3D Measurement Service “SCANBE”
Hip Star
Minimizer Bra

INTEGRATED REPORT 2023

■ 08

Wacoal Group’s Competitive Advantages

Delivering “long-lasting and high-quality products” across every time period is the Group’s mission and the value it provides. Our
system for producing high-quality products is one of Wacoal’s greatest competitive advantages and an important asset that has
been established throughout its history and within its organization.

The findings of the WACOAL Human Science Research &Development Center form the basis of our creation of beauty. To realize
products loved by customers, the center researches and formulates
theories on beauty, comfort, and health in relation to people’s
physiques. The data that the center has accumulated over 55 years
underpins our businesses. Wacoal leverages the data not only todevelop new products but also to maintain quality and make forays
into new business fields.

With the aim of helping people to express their beauty while cateringto their current needs, Wacoal innerwear designers use creativity andphysique measurement data to create products that afford wearers
physical and emotional comfort. By repeatedly cycling through aprocess of fittings, analysis, and improvements, we realize optimal
wearing comfort and figure enhancement.

Further build on strengths

Further build on strengths

Further utilize
measurement data

Shorten lead time for productplanning and development

Research &Development
Manufacturing /Quality Control

The system for
responding todiverse values

Product Planning
Sales

For Wacoal, “product quality preservation” is part of the value that itprovides and a significant social responsibility. The quality of our
products is supported by the handwork of highly skilled sewing
personnel with years of experience and a quality control system thatsets and ensures the implementation of stringent, painstaking standards
for all processes, from material procurement through to production.

Beauty advisors (BA) play an important role in ensuring that customers
receive the best-fitting products. By using specialized knowledge andskills to help accentuate the beauty of each person, we build
relationships with customers that are deeper, broader, and longer.

Further build on strengths

Further build on strengths

Shift to demand-linked
production

Utilize the voice of customers through DX
and customer knowledge of BA

09 ■ WACOAL HOLDINGSAbout Our Businesses

Our core business includes manufacturing, wholesaling, and some retailing of intimate apparel (especially women’s foundation
garments, lingerie, nightwear and children’s underwear), outerwear, sportswear, and other textile products and accessories. Other
businesses include food service, culture, services, and interior furnishing of shops, and others.

Wacoal Business (Domestic)

Mainly operations of Wacoal Corp.

Main Brands*Not all brands shown

Wacoal Business (Overseas)

Segment centered on Wacoal International Corp. (U.S.), Wacoal China Co., Ltd., and Wacoal Europe Ltd. (made a subsidiary in
2013; located in U.K.)

Main Brands*Not all brands shown

Peach John Business

Other

Segment centered on the Peach John Business (made a subsidiary in 2008)

Mainly operations of Nanasai Co., Ltd. (became subsidiary in 1987), Lecien Corporation (became subsidiary in 2009)

Consolidated Sales Revenue (FY2023) *IFRS

Wacoal Business(Overseas)¥28.0 billion¥96.7
billionWacoalBusiness(Domestic)

51%

35%

Outerwear
Sportswear
Nightwear, etc.

Approx.

20%¥19.2
billionFY2023
Sales revenue¥10.4
billion¥188.6 billion¥9.2
billion¥13.2
billionBreakdown of Sales by Product Type (FY2023)¥11.9
billionWacoal International Corp.

Product type

Wacoal Europe Ltd.
Wacoal China Co., Ltd.
Other overseas subsidiaries
Peach John Co., Ltd.
Other businesses
Wacoal Business (Domestic)

Women’s innerwear

Approx.

80%

INTEGRATED REPORT 2023

■ 10

Embarking on a new journey
aboard a ship (the company)that creates “individuality”



11 ■ WACOAL HOLDINGSA Word About the Revised Medium-Term
Management Plan

We took the time to think about why Wacoal is struggling. One reason is that we havenot been able to keep up with changes in consumers and the world. The value chain,including planning and sales, which we consider to be our strength, is fraying. Yet, wehave not tackled the essential, underlying issues. Another reason is that we were notdecisive enough. Fearing the pain and strife caused by reforms has caused us to put
off what has needed to be done. To get Wacoal Group back on track for growth in theface of unprecedented headwinds, executive leadership and employees alike must
carefully reflect on our past and work together to rebuild a business model thatmaximizes the value of the Wacoal brand. I liken a company to a single ship moving
toward a single destination. In order to build a stronger ship that can move forward
even in the face of headwinds, and in order for employees to take pride in this ship,
we will carry out reforms with a strong commitment, and support employees as theytake on challenges and grow both personally and professionally.

Masaaki Yajima
Representative Director, President and CEO
Wacoal Holdings Corp.

INTEGRATED REPORT 2023

■ 12

We will quickly restore our ability to generate cash
and sustainably enhance corporate value

We decided to revise the medium-term management plan because we fell significantly short of our goals infiscal 2023, the plan’s first fiscal year. Under the revised medium-term management plan, we will implementbusiness model reforms to improve profitability, a growth strategy to achieve VISION 2030, introduce ROIC
management, and promote asset reduction. We will rebuild supply chain management and strengthen ourmanagement base to improve profitability and capital efficiency and enhance the effectiveness of our strategies.
Additionally, by encouraging employees to take on challenges and grow, we aim to evolve into a Wacoal Group
that can continuously provide products and services that contribute to the “individuality” of our customers.

Revised the medium-term management plan to
evolve into a company that can make forward
progress despite businessor market headwinds

2023-24

Basic Policy of the Revised
Medium-Term Management Plan

Basic Policy on Human
Resources Strategy

Transition to a corporate structure that can steadily
generate cash to increase the likelihood of achieving
VISION 2030

Running the organization by a select few= Individual growth x Strengthening organizational
capabilities x Fostering an appealing culture

Business model
reformROIC
management

Acquisitionof talent

Support growth

Growth strategy

Promoting asset
reduction

Strengthen
management
capabilities

Promotion of
DE&I

P. 23▶

13 ■ WACOAL HOLDINGS

Achievementof well-being

P. 51▶

The WACOAL
Way
MissionFounding
Principles

2030-31VISION 2030 (FY2031)

2025-26

Evolution ofvalue creation process

Final fiscal year of
the revised mediumterm management
plan (FY2026)

Contribute to beauty
with individuality

Increase sales
Achieving a return
exceedingcapital cost

Product
planning

Research anddevelopment

Shareholder
returns

Growthinvestments

Human
resource
investments

New value creation
Maximization ofmanagement efficiency
Solving materialities
Revamp corporate
cultureBusinessmodel
reformSales andmarketing

Procurement

Production

Supply chain management reform
Increased effectivenessof strategy

Always put
customers firstP. 27▶

Strengthening foundation
underpinning value creation

INTEGRATED REPORT 2023

■ 14

A Message from the President

We will build a foundation to restore
growth for the Wacoal Group throughthe united efforts of executives andemployees based on the revised
medium-term management planthat embodies our determination to
see things through, not put things off

Masaaki Yajima

Representative Director,
President and CEO
Wacoal Holdings Corp.

Dramatically revising downward its net income forecast forthat this will cause major concerns for all stakeholders,

fiscal 2024, the Wacoal Group announced on November 9,

including shareholders.

2023, that it projects to post a net loss for the second

We revised the medium-term management plan as aconsecutive fiscal year. At the same time, the Group

result of dramatic changes in the business environment andannounced that it would conduct an overall review of theconsumer needs. Since around 2015, the Group’s

medium-term management plan formulated in April 2022

performance has continued to gradually trend downward

and implement fundamental structural reform. The forecast

because of the closure of department stores and massof a net loss for fiscal 2024 is the result of stagnant net

retailers, our main sales channels for the Japanese business,sales in major regions, expenses related to structural reformand changes in business conditions. Furthermore, theof the Japanese business, and impairment losses due toconsumption tax hike in 2019 and spread and extended

the withdrawal from the U.S. business. I am keenly aware

duration of the 2020 COVID-19 pandemic further undercut

15 ■ WACOAL HOLDINGS

sales, which led to a rapid deterioration in profitability. For

expected of me, and although the environment is notvarious reasons, including changes in the people’s values

promising, I realized that taking responsibility for putting thefollowing the pandemic, greater-than-expected inflation,company back on a firm footing is what I could do, andvolatile interest rates, and China’s weak economic growth, thedecided to accept the position. The current medium-termGroup continues to face a harsh business environment. In an

management plan with updated content (revised

era of growing uncertainty, we determined that unless wemedium-term management plan) was formulated withoutchange our business model, we do not have a future, which isworrying about the pain and discord that will arise during thewhy we are undertaking this structural reform.

reform nor putting off efforts to resolve the problems we face.

I became Representative Director, President and CEO in

With an eye toward fiscal 2026, the final year of the plan, weJune 2023. When asked about taking the position, I

will move forward with structural reform with a determination

understood the perilous state of the company and the role

to see it through.

INTEGRATED REPORT 2023

■ 16

A Message from the President

Process for Formulating the Revised Medium-Term Management Plan

Aiming to Transition to a Structure that Steadily Generates Cash By Revising
the Value Chain From a Customer Point of View
In addition to continuing to record lackluster performance,

unable to address problems and simply put off dealing withwhich has been true for many years, the Group has been

them, which contributed to the protracted period of weakunable to fully implement its medium-term management plan

performance. I think that a climate in which the management

and achieve its initial plans and is burdened with low capitalteam does not make firm decisions also impacts employees,

efficiency. Although we have touted structural reformand results in employees trying to read what their superiors

numerous times in the past, those attempts were

are thinking, not expressing their own opinions. Even though

unsuccessful because we were unable to thoroughly

we should address customers’ needs, a corporate culture in

implement them and they lacked speed and ineffectiveness.

which we only focus on what is occurring in the company

The main problem is our slow response to changes incustomers. The Wacoal Group handles products that provide

quickly took root.
Even with this awareness and our strong efforts towearing comfort and are highly form-fitting, but a growing

maintain manufacturing based on past practices, these harsh

number of customers are also demanding ease-of-wear. To

conditions will not change. Furthermore, the external

handle a customer, it takes about thirty minutes from whenenvironment is changing at a quicker pace than expected. It isstaff ask them about their preference until the fitting isimportant that we rethink what is common sense at Wacoal

completed, which is too long for customers who place a highand review the value chain from a customer point of view.

value on time. Although it is necessary to consider what

With the revised medium-term management plan, we arecustomers want and what is best for them, we lack a strong

facing the problems that were recognized in previous

ability to respond to changes because of an overemphasis on

medium-term management plans. We will work to transform

our past strengths and service style. In addition, trying to

the structure of the company into one that can steadily

solve problems causes discord and other issues, and I regret

generate cash by fully implementing stated measures.

that the senior management team, including myself, were

Formulating a Revised Medium-Term Management Plan Through Close
Deliberations with External Directors
The Group has external directors who possess diverse skills,

Furthermore, employees in related departments played awhich includes ones with abundant knowledge andcentral role in formulating measures related to the key issues

experience as managers, and ones with insight andof supply chain management (SCM) reform, cost structureknowledge of investing and financial capital markets (thereform, and growth strategy, but we also received advice fromGroup has two internal directors and five external directors).

various perspectives by having consulting companies andDuring the process of formulating the revised medium-term

external directors with specialized knowledge participate inmanagement plan, we established a Group Strategy

the process.

Committee, composed of internal and external directors, andUntil now, the Group has not thoroughly stressed capitalfor important agenda items, such as business strategy,

efficiency at the business-department level. Although thegrowth investments, and asset holdings, we held repeatedsenior management team and management personnel should

discussions from various perspectives, including the market,

consider how to generate the most profit with the least

investors, importance for the company, and businessamount of capital, our inventory has become bloated because

performance, and fundamentally revised the current strategy.

we have not evolved our existing SCM system in response to

17 ■ WACOAL HOLDINGSthe greater-than-expected speed of changes in customers

demand, but also reduce the production lead time. I think thatand logistics. Through the SCM reform discussed in thethese measures will also contribute to improved capital

medium-term management plan, we will not only optimize

efficiency. Based on thorough deliberations, which external

in-store product lineup and control and optimize inventory

directors participated in, we have created an uncompromisinglevel through a shift to production methods appropriate formanagement plan.

Concrete Measures in the Revised Medium-Term Management Plan

Shift to Growth Trajectory by Implementing Cost Structure Reform and Increasing
Brand Power, Customer Royalty, and Workforce Capabilities
The Wacoal Group systematically compiled a corporate

capabilities and the trust we have built up with customers

philosophy in 2022. Having positioned Our Culture, Ourover the years. Our greatest competitive advantage is that we

Promise, and Our Values, as elements of our Founding

possess not only the various components of the value chain,

Principles, we newly created a Mission that the Group should

including research, planning, production, and sales, but alsoachieve in modern society. “VISION 2030,” our medium- to

the ability to create high quality products based on body typelong-term management strategy framework lists the issues

data accumulated by the Human Science Research &that we should tackle by 2030 in order to achieve our Mission,Development Center and 3D measuring service. However, weand the medium-term management plan is one milestone

must evolve those strengths into a form appropriate for the

toward VISION 2030.

current times. The value we provide will not change with the

The revised medium-term management plan outlines atimes but we will deliver that value to customers in a more

return to growth through cost structure reform andevolved form. This will lead to customer satisfaction, and thus,

strengthening of brand power, customer loyalty, andall stakeholders, including employees, can benefit from thisworkforce capabilities while temporarily putting aside thevalue. I think that it is our mission to maintain this.

issue of performance. At the same time, we will reinforce our

The four main policies outlined in the revised

business management infrastructure, increase management

medium-term management plan are those listed below. We

efficiency, and improve capital efficiency by introducing

will work to improve profitability and capital efficiency by

ROIC management.

steadily implementing these measures in line with the plan.

I think that the Group’s strengths are its manufacturing

Basic Policy of Revised Medium-Term Management PlanBusiness model reforms to
improve profitability Reviewing brand strategies
 Focusing on growth markets
 Human resource development and organizational
development to enhance corporate value

 Reviewing supply chain management
 Cost structure reform Dealing with unprofitable businessesIntroducing ROIC management
 Monitoring profitability and strategy effectiveness Business portfolio management

Growth strategy to achieve VISION 2030



Promoting asset reduction
 Reducing inventories
 Reducing cross-shareholdings Streamlining real estate holdings

INTEGRATED REPORT 2023

■ 18

A Message from the President

Rebuilding the Supply Chain and Meeting Diverse Customer Needs
Implementing SCM reforms that make it possible to

As for the brand strategy for Japan, we organized market

accurately respond to changes in customer needs is ansegments from a unique perspective and created a brandimportant initiative to achieve the Group’s mission to

portfolio for segments we are strong in. In fields other than“empower people with the confidence that comes frominnerwear, we also aim to expand the “beauty, comfort, andlooking and feeling their best and welcome everyone into ourhealth” business, and this will involve such activities as

caring community built on mutual respect, diversity, andreinforcing 3D measurement services, personalized services

inclusion.” However, at the current time, we are unable tothat leverage customer data, and sports businesses, including

smoothly provide products that meet consumer changes

CW-X. I try to closely communicate my intentions to Wacoal

because the development lead time for products is more thanCorp. President Kawanishi on a regular basis. As the holding

one year. Through SCM reform, we will work to strength ourcompany, we will clearly indicate such items as policies andability to meet changing needs by optimizing in-store productexpectations while Wacoal Corp. takes responsibility forlineup, shifting to production methods appropriate for

implementing the reforms. Furthermore, I consider monitoring

demand, and shortening production lead time. The Group’s

progress in implementing these reforms as important for

SCM was constructed over its long history, and in order toincreasing the effectiveness of related efforts. External

implement these measures to update our methods, we must

directors, too, have expressed the opinion that reinforcing ourchange how we think. To evolve into an organization thatsupervision functions is necessary to increase effectiveness,takes into consideration overall optimization, starting withand we will confirm progress of initiatives so that our plans arecustomers, and makes it possible to undertake improvement

not a mere pipe dream.

activities that are not limited to a particular department, we

As for the overseas business, we expect conditions,will support employees’ efforts to acquire new skills.

including geopolitical risks and high inflation, to remain

Furthermore, we think that we should listen more carefully touncertain for some time. Therefore, through fiscal 2025, wethe opinion of not only beauty advisors (BA) who work hard

will work with each country to build a management foundation

every day at stores but also customers, and we will analyze

and implement the growth strategy with an eye toward thethose opinions with digital technology and use them to evolvenext medium-term management plan.

the value we provide.

19 ■ WACOAL HOLDINGS

Dealing with Unprofitable Businesses and Shifting Resources to Growth Fields
For the revised medium-term management plan, we decided

Under these conditions, we examined various possibilities

to liquidate or review unprofitable businesses throughout thefor the business in the future but decided to withdraw fromcompany as one part of our business model reform. We havethe business after determining it would be difficult to improvealready announced that we will withdraw from the LIVELY

future performance. As for the decision to acquire thebusiness operated by U.S.-based Intimates Online, Inc. (IO)

company, we conducted an analysis of various factors,

and liquidate the company. Since our acquisition of the

including the market, competition, profitability, business plans,company in July 2019, IO has operated a business thatand risks, and while there were changes in the external

employs its own EC platform as its main sales channel andenvironment, we regret that we did not conduct appropriate

makes use of new digital media to communicate with

post-acquisition supervision of management by thecustomers, but the company’s sales have fallen short of planscharismatic founder of the company. As of now, IO is the only

as a result of the entry of new competitors and limits on

unprofitable business that we have settled on a response, buttargeted ads due to stricter restrictions on the use of personal

we will carefully ascertain conditions for other businesses by

information. During the COVID-19 pandemic, there was also achecking them in terms of such aspects as sustainability ofdramatic decline in opportunities for ambassadors,* whothe business’s strengths, exposure to excess competition,

support the brand, to communicate information, making itmarket growth potential, and certainty of profitability.

impossible to achieve expected results.
* The ambassador system positions core brand supporters who communicate information through social media and other media types as ambassadors and aims to raiseawareness and promote product sales.

Initiatives to Increase Capital Efficiency

Fostering Awareness of Capital Efficiency by Introducing ROIC Management
As explained at the beginning, the Wacoal Group is plagued

set a basic policy of liquidating assets that do not enhanceby a low ROE as it has been unable to achieve initial plans forcorporate value, and as we liquidate those assets, we will

many years. We consider this the result of a deterioration in

search for investment opportunities that contribute toour business management infrastructure, and have decided tobusiness growth, and those investment decisions will be

introduce ROIC management in order to increase capital

based on ROIC. Moreover, in order to reduce assets, we will

efficiency and achieve a robust corporate structure. It is theprimarily look at inventories, cross-shareholdings, and realGroup’s mission to deliver products that support the “beauty,

estate holdings when examining and revising asset holdings.

comfort, and health of each customer,” and allocate cash

Our aim is to achieve an ROE of 7% during the period of

obtained from that activity to investments in growth fields andthe revised medium-term management plan by moving

human resources who support those activities and to pay all

forward with our business and financial strategies. We areshareholders an appropriate return. Using ROIC as aaware that our cost of shareholder equity is around 6%, which

management indicator that supports sustainable growth andhas resulted in a PBR less than one, and want to correct thisrecognizes multiple stakeholders will lead to the creation ofsituation. I do not want to be satisfied with a PBR that

corporate value.

exceeds 1 but want to continually strive to raise our PBR

We will also move forward with reducing assets throughthrough sustained initiatives to improve profitability and capital

the revised medium-term management plan. With an eyeefficiency starting with the next medium-term management

toward improving the efficiency of assets and capital, we haveplan in order to achieve VISION 2030.

INTEGRATED REPORT 2023

■ 20

A Message from the President

Strengthening Sustainability-related Initiatives

Reinforcing Response to Human Rights and Environmental Issues
Environment problems, such as climate change, and humanthroughout the supply chain and work to reinforce initiatives

rights problems are growing more serious, and therelated to respect for human rights based on the idea ofinternational community and customers are calling loudly forhuman rights due diligence compliant with UN Guiding

initiatives to achieve a sustainable society. To reinforce ourPrinciples on Business and Human Rights.

response to important sustainability problems, the Group not

As for the environment, we announced in September

only established the Sustainability Committee, an advisory

2021 that we support the recommendations of the Task Forcebody to the Board of Directors, and four promotion

on Climate-Related Financial Disclosures (TCFD) andsubcommittees, but also formulates concrete measure todisclosed related information in June 2022. We are now

address those problems, monitors the state of progress inmoving forward with formulating a concrete action plan toimplementing those measures, and evaluates the state of

reduce greenhouse gas emissions and promoting suchachieving those.

initiatives as increasing the percentage of materials that are

In terms of human rights, we revised the Wacoal Groupenvironmentally friendly, reducing the disposal of old products,

Human Rights Policy in April 2022 so that it complies with theand conducting recycling activities. It can be argued that our

Guiding Principles on Business and Human Rights stipulated

initiatives to increase sustainability is one part of implementing

by the UN. While already accurately ascertaining the state of

our corporate philosophy. In addition to increasing profitability

compliance with items stipulated in the Wacoal Group CSR

and implementing our growth strategy, we will transition to a

Procurement Guidelines and running through a cycle thatstructure that can achieve sustainable growth by reinforcing

leads to continuous corrections and improvements, we will

initiatives related to human rights and the environment.

prevent and mitigate negative impacts on humans rights

Next medium-term
management plan
FY2027 to FY2031● In addition to continuous

Revised medium-term
management plan

improvements, we will strive
to achieve the goals of
VISION 2030 by implementing
new growth investments

FY2024 to FY2026● Shifting to a structure that cansteadily generate cash
(Promoting business model
reform and asset reduction)











Sustainablegrowth Foundation andgrowth period

Goals to aim for in FY2031

VISION 2030
Improving profitability
and capital efficiency  
Reform period







21 ■ WACOAL HOLDINGS

To evolve and grow as “Wacoal Groupof the World” by providing both physicaland emotional beauty and richness toindividuals through high sensitivity andpremium quality.



To Stakeholders

Resolutely Moving Forward By Taking a New Look at Customers and Changing our
Corporate Culture
Having positioned the period of the revised medium-term

meetings. The role of the executive management team is to

management plan as a reform period, we will work to improve

provide leadership so that all employees view the revised

profitability and capital efficiency by steadily implementing the

medium-term management plan as our code, possess theirvarious measures in line with the plan. Starting with the next

own opinions, and can propose improvements. I would like tomedium-term management plan, we plan to reap the benefits

continue to dialogue with all employees until they have aof these reforms in the foundation and growth period andproactive attitude toward what they must do to address theimplement a strategy to generate additional growth. Whencrisis that the company faces.

formulating the revised medium-term management plan, we

My vision for the company is for it to become a company

held deliberations from various perspectives. It is clear what

in which its employees throughout the world enthusiasticallythe Group needs to tackle, and the only thing left is for all

take on challenges and provide new value while staying close

executives and employees to see related initiatives through.

to customers and society I envision a company that wins the

For twenty years, we posted weak performance, and in thetrust of diverse people throughout the world and provides

business environment at that time, we tended to have a

products and services that make people throughout thenegative attitude toward everything, and it is important thatworld happy. That is precisely why we have to change. We

we establish a cycle that boosts motivation for routine

will take a new look at customers, change our corporate

operations. It is also important that we actually feel that we

culture, and work to implement the revised medium-term

are making forward progress, and if that is possible, we canmanagement plan with determination.

maintain motivation to accomplish everything we want. Since
announcing the revised medium-term management plan, we

I truly hope that all stakeholders continue to support
the Group.

have held briefing sessions for employees and townhall

INTEGRATED REPORT 2023

■ 22

Revised Medium-Term Management Plan Overview and Strategy

Policies of the Revised Medium-Term Management Plan
In order to improve the probability of achieving VISION 2030,
we will shift to a structure that can steadily generate cash

Recognizing
the Current
Situation

Environmental
Awareness

The speed of changes in the external environment was quicker than expected, and weaknesses in our
supply chain management have become apparent● With diversifying customer needs, we recognize that conventional advertising, product planning, and production
systems are not enough to respond to market changes, causing deterioration in profitability and excessive inventory(especially with the existing product planning and development lead time [LT], which takes more than one year tomarket, and improvements are urgently needed).
● As for the harmful effects of functional organizations, various coordinated tasks and complicated profit and loss
management hinder prompt decision-making.
● The responsibility for the management strategy is not clear, and the unity of the effectiveness of the strategy is not
improving. In addition, the holding company’s supervisory function over its subsidiaries is insufficient, andimprovements are needed.

Opportunities

Risks● Diversifying need to “be yourself”● Increasing need for health and comfort● Social inculcation of sustainability awareness● Developing markets with significant growth● Increasing procurement costs due to changes in the externalpotential

Wacoal Group’s
Strengths

Basic Policy

Personalized body andmind database

Research/knowledge ofvarious body types/life
stagesManufacturing technology
for products that suiteach customer

Organizational ability tomeet individual needs andembody services

Strive to improve and enhance profitability and capital efficiency and transform ourselves into a company that cancontinue to invest in the growth necessary to sustainably increase corporate value and return profits to our stakeholders.
1. Business model reforms to improve profitability
Implementing business model reforms (supply chain management reforms and cost structure reforms) to restore
basic profitability
2. Growth strategy to achieve VISION 2030
Carrying out brand strategy and customer strategy, utilizing the power of digital resources and our Company’s
strengths to lead to further growth
3. Introducing ROIC management
Introducing ROIC management as business management infrastructure that supports measures to enhance
profitability and the effectiveness of strategies
4. Promoting asset reduction
Improving capital efficiency by reducing inventories, cross-shareholdings, and streamlining real estate holdings

Improving profitability
and capital efficiency

Financial Strategy

environment● Declining domestic demand due to population decline● Lack of competitiveness due to slow innovation● Declining corporate attractiveness and a serious shortage of staff

Revisedmedium-term
management
plan

Growth investments
and stakeholder returns

1. Improving profitability through business model reforms and growth strategies as a top priority, we will reduce inventories
and cross-shareholdings, and streamline real estate holdings to improve capital efficiency and increase ROE
2. While prioritizing investments for future growth, we will actively return profits to shareholders to improve capital efficiency

23 ■ WACOAL HOLDINGS

Revised Medium-Term Management Plan Strategy

RevisedMedium-Term
Management
Plan











Business
Model
Reforms

GrowthStrategy

Introducing
ROIC
Management

Promoting
Asset
Reduction

Supply chain management reform
Business Model
Reforms

Strengthen responsiveness tochanges in customer needs

Improve earning power

Implementing SCM reforms at Wacoal (Japan) to respond quickly to changes in customer
needs and the market environment
With the use of digital technology to build SCM linked to demand from the customer’s
point of view, thoroughly selecting and focusing to optimize the cost structure
Cost structure reform

P. 35▶

Improve earning power

In order to restore Wacoal (Japan)’s basic profitability, a radical cost structure reform will
be implemented. Setting reduction target to ¥7 billion
We plan to improve the sales profit ratio by 3 pts to 4 pts and SG&A expenses by 4 pts to
5 pts by FY2026 (compared to FY2023)
Dealing with unprofitable businesses

Improve earning power

P. 20▶

Examine the future ideal state of each business and determine an action plan for thecontinuation, sale, or withdrawal of each business

Wacoal Corp.
Growth Strategy

Strengthen responsiveness tochanges in customer needs

To meet diversifying customer needs, we will contribute to the “beauty, comfort, andhealth of each customer”
Overseas business

Strengthen responsiveness tochanges in customer needs

Amid an uncertain business environment, we will first work to improve our management
infrastructure and execute growth strategies for the next medium-term management planIntroducing ROICManagement


Promoting Asset
Reduction

P. 36▶

P. 41▶

Introducing ROIC management to improve capital efficiency and achieve arobust corporate structure
In addition to portfolio management, it is also used as a means of performance
management to accurately measure results, and quantitatively link improvement activities
on the ground with improvements in profitability and capital efficiency expected byinvestors and other stakeholders

P. 50▶

In order to improve asset and capital efficiency, the Company’s basic policy is tosell any assets that do not contribute to raising corporate value
When selling, we will search for investment opportunities that will contribute to businessgrowth, and determine the businesses that should be invested in from the perspective of ROIC
(Inventories, cross-shareholdings, and real estate holdings are subject to review andimplementation)

P. 48▶

INTEGRATED REPORT 2023

■ 24

Revised Medium-Term Management Plan Overview and Strategy

Quantitative Targets in the Revised Medium-Term
Management Plan
In light of the external environment, initial sales targets have been revised downward. On the other hand, through businessmodel reforms and growth strategies, we will strengthen our ability to respond to customer changes and profitability while
striving to improve capital efficiency. In addition, we aim to achieve a ROE of 7% and a PBR of 1 time or more.

Strengthen responsiveness tochanges in customer needs

Improve profitability

Achieve a ROE of 7% and a PBR of 1 time or more
FY2026
Sales revenue¥203 billion

Operating profit¥13 billion¥16.5 billion

Operating margin

6.4%

7.5%

ROE

7%

6%

ROIC

6%-7%

Earnings per Share(EPS)¥200 or more

Improve capital efficiency

Our Goals for VISION 2030
To evolve and grow as “Wacoal Groupof the World” by providing both physicaland emotional beauty and richness toindividuals through high sensitivity and

FY2025+1 year+1%¥220 billion—¥200 or more

VISION 2030 (FY2031)• Achieve global growth• Achieve a high profitability structure and ROE higher than 10%• Deepen the provided value and expanding business fields• An attractive corporate culture in which workers
can fully realize their abilities• Solve material issues

premium quality.
FY2026
Final year of Revised
Medium Term Management Plan
Complete cost structure reform

Sales revenue:¥270 billion
Operating profit:¥27 billion
Operating margin:More than 10%

FY2023Medium-Term Management Plan
Ended the first year
substantially underachieving

Sales revenue:¥203 billion
Operating profit:¥13 billion
Operating margin:More than 6.4%
ROE: 7%
ROIC: 6-7%

FY2024
Announce Revised
Medium Term Management Plan
Comprehensively review strategies
to improve the probability ofachieving VISION 2030

25 ■ WACOAL HOLDINGSROE: More than 10%
ROIC: More than 10%

Financial Strategy

P. 45▶

Financial
Policies

1. With improving profitability through business model reforms and growth strategies as a top priority,
we will reduce inventories and cross-shareholdings, and streamline real estate holdings to improve
capital efficiency and ROE
2. While prioritizing investments for future growth, we will actively return profits to shareholders to
improve capital efficiency

Dividend
PolicyOur basic policy on profit distribution to shareholders is to make stable distributions based on
consideration of our consolidated performance, while seeking to increase our enterprise value
through active investment aimed at higher profitability and to increase net income per share.

Cash Dividends per Share (yen)100Year-end

80

Interim

50

60

40

50

20

40
30

20
20

2020

50

40

40

2021

20

2022

2024 (forecast)

2023

Cash Flow Allocation(¥ billion)

Net income *excluding impairment loss

10

Depreciation costs *excluding lease liabilities

20

Asset reduction and debt utilization (Of this, ¥30 billion is for reducing cross-shareholdings)

80

Cash inflow

Cash generated during the 3-year period

Investment in new andexisting businesses
Cash outflow

Returning dividends
Share repurchase

110 billion

Total: ¥▶ Focusing on IT and digital investments for growth▶ Investment in human capital▶ Continuing to pay stable dividends while taking into account our consolidated

financial results and the status of asset sales▶ Actively promoting improvements in capital efficiency

40
15
55

INTEGRATED REPORT 2023

■ 26

Value Creation Process
The Group will maximize and optimize the various assets that it has developed—including physical, financial,trust-related, and organizational assets—and advance medium- to long-term growth strategies to resolve material
issues and enhance enterprise value even further. Through rigorous, customer-focused business model reform,
execution of growth strategy, as well as the evolution of our value creation process, we will continue bringing
products and services that enrich society to the market.

Maximize the value
provided to customers

Employees

Review of
medium- tolong-term
strategy

Achieve the growth ofeach of our employees
and establish a highly
rewarding organization

Environment

Society
Realize a society in which
everyone plays an activerole in their own way

Governance

Growth strategy

Changes in external environmentand operating environment

Through business model reform,
to customers using the optim

Customers

Preserve the environment
globally for future
generations

Changes in customer needs

Business model reform

Changes in society R&DProduct /Planning

Procurement

Further build on strengths

Further build on strengths

FurtheFurther utilize
measurement data

Shorten lead time for
product planning anddevelopment

Shift
linke

Enhance governancetoward the realization ofsustainable growth

Evolve our organizational capabilities through customer-focuse

Customer’s point oAssets and Competitive Adva
Tangible Assets
Physical Assets● Group factories in Japan and overseas● Appealing sales areas and a richproduct lineup

Financial Assets● Abundant capital● Strong financial foundations● Extens● Trustecustom● Social● Favora

27 ■ WACOAL HOLDINGS

, deliver products
mal channels

Products andservices that enrich
our customers’
daily lives

財務成果

Customersatisfaction
and loyalty

The
WACOALWay
Mission

Products and services
that empower
customers’ “individuality”

Production

Sales / Marketing

er build on strengths

Further build on strengths

t to demanded production

Utilize the voice ofcustomers through DX andcustomer knowledge of BA

Products andservices underpinning
the well-beingof our customers

ed supply chain management reform and DX

Products andservices thatpay due respect tothe environmentand human rights

Problem solving
for the environmentand humanrights, etc.

Wellbeing(engagement,
self-growth,happiness)

Financial results

Founding
Principles

Contribute to beauty
with individuality

Safe, reliable,
high-quality products
and servicesof view

antage Developed
Intangible Assets
Trust-Related Assets

sive and diverse groups of specialists

ed brands and relationships withmers

l contribution through businesses

able business partnerships

Organizational Assets● Abundant physique measurement data andaccumulated knowledge of the Human
Science Research & Development Center● Original design and manufacturing
technologies and quality control system● The beauty advisor training system

INTEGRATED REPORT 2023

■ 28

Material Issues to be Addressed by 2030
We have established “11 material issues” with our customers, our employees, the environment, society, and governanceas targets. These will serve as our benchmarks until 2030 for our business’ growth and our work to achieve asustainable society.

Identification Process
In order to realize VISION 2030—the Group’s medium- to

STEP 1Creation of a list of issues to be addressed
based on dialogue with and requests fromstakeholders

STEP 2

Discussions between management andoutside experts

STEP 3

Discussions with the next generation ofmanagement candidates

STEP 4

Discussions with young employees

STEP 5

Identification of material issues

long-term management strategy framework—while evolving
our long cultivated strengths, such as research, planning, andsales, we conducted an analysis of material issues based onsocial and environmental issues to be addressed, as well as
business growth. As a result, we identified five targets and 11
material issues. We arrived at this decision by gaining insight
into the business challenges and social and environmental
issues we expect to face by 2030, while taking into accountmacro trends and the requests of various stakeholders.

Material Issues
Customers

Maximize the value provided to customers
Material issues

1

2

Enhancement ofcustomer experiencevalue by pursuing
personalization

Endeavoring
to expandbusiness areas

Concrete efforts toward
the resolution of material issues
Increasing of customer connections
and learning from them to wow
other customers
Creation of products thatexceed expectations and are loved

Tackling of challenges in
new areas to support customers
from every angle

Deepening of productquality and building ofservice quality

Pursuit of quality control systems andquality levels demanded by the times

Targets

Increase in the number of customers with connections
to the Wacoal Group
Increase in the number of people experiencing Wacoal’s
unique services that enhance the customer experience
Revitalization of the innerwear business by promoting
the development of new products and services
that utilize customer data
Increase in growth and profitability in businesses otherthan women’s innerwear
Creation of new business to contribute to well-being
Expansion of internal resources into new fields

Achievement of global growth toprovide inspiration to customers
around the world

3

KPIs (by 2030)

To be considered in November 2023
in response to the revised
medium-term management plan andannounced during fiscal 2025

Overseas business expansion
Continuous monitoring of product quality andimplementation of improvement activities
Maintenance and improvement of the quality of digitaland over-the-counter services

Employees

Achieve the growth of each of our employees and establish
a highly rewarding organization

4

Material issues

Concrete efforts toward
the resolution of material issues

Growth into humanresources who can
expand their potential
and have confidence,
pride, and success

Growth into of human resourcesthat proactively enhance self-proficiency
and take on challenges with enthusiasm,
regardless of generation or position

KPIs (by 2030)
Enhancement of initiatives geared toward self-motivatedcareer design and skill improvement
Nurturing of human resources and creation of anenvironment in which employees can take on challenges
with enthusiasm

5

Building of an organization
Fostering of an organizational culturethat can demonstrate great in which people from various positions
results through co-creation can cooperate and achieve their missions
and collaboration

Development of a work environment in which people
from diverse backgrounds can work together

6

Continuous improvementof employees’ healthand health awarenessImprovement of employees’ productivity and mental
and physical health29 ■ WACOAL HOLDINGS

Improvement of employees’ mental
and physical health

Targets

Increase in the number of employees who can act withclarity on what the Company should be and its mission

Improvement of health literacy

To be considered in November 2023
in response to the revised
medium-term management plan andannounced during fiscal 2025

Environment

Preserve the environment globally for future generations
Material issues

7

Promotion of businessactivities that reduce
environmental impact

Concrete efforts toward
the resolution of material issues

KPIs (by 2030)

Fostering of environmental awarenessamong both employees and consumers

Visualization of ecological activities in business activities

Achievement of a decarbonized society

Realization of a decarbonized society and reduction in
CO2 emissions

Promotion of waste reduction

Reduction of product disposal rate

Achievement of a society of thatrecycles resources

Increase in rate of environment-friendly materials used

Targets
1) Zero in-house emissions (Scope 1 and 2)(domestic businesses)
2) Zero product waste (Wacoal Corp.)
3) Rate of environment-friendly materials used of
50% (Wacoal Corp.)
4) 20% reduction in supply chain emissions(Scope 3) (Wacoal Business (Domestic))
Note: For our overseas business, we plan tostart by tracking our own emissions(Scope 1 and 2) and disclose our targets
by the fiscal year ending March 31, 2025.

Society

Realize a society in which everyone plays an active role in their own way
Material issues

Concrete efforts toward
the resolution of material issues

KPIs (by 2030)

Targets

Promotion of breast care activities
Contribution to the improvementof women’s QOL

Fulfillment of needs through products and services
and development of ideas that contribute to improving
women’s quality of life
Contribution to women’s quality of life through ongoing
dialogue with stakeholders

8

Promotion ofco-creation innovation
to solve social issues

Promotion of in-house enlightenment activities to foster
an understanding of diversity-related issues such as gender
Promotion of diversity and inclusion

Promotion of respect for human rights
and CSR procurement activities

Promotion of dialogue and co-creation activities withexternal stakeholders to foster an understanding ofdiversity-related issues such as gender

To be considered in November 2023
in response to the revised
medium-term management plan andannounced during fiscal 2025

Establishment and implementation of human rights
due diligence and promotion of human rights training
Expansion of scope of CSR procurement activities

Governance

Enhance governance toward realization of sustainable growthMaterial issues

Concrete efforts toward
the resolution of material issues

KPIs (by 2030)

Targets

Implementation of Japan’s Corporate Governance Code9

Implementation ofhighly transparent
management

Maintenance and establishment ofan optimal corporate governancesystem that will improve effectiveness

Demonstration of the Board of Directors’ functions andpromotion of diversity
Ongoing improvement of the system for the compensationof officers to increase corporate value
Establishment of fair and motivating evaluation andcompensation systems

10

11

Strengthening of
the risk management
systemContinuous improvementof profitability andcapital efficiency

Thorough compliance with laws andregulations and development ofan organization with high ethical standards

Prevention of inappropriate behavior in corporate
activities and enhancement of compliance awarenessamong all officers and employees

Strengthening of organizational resilienceby steadily responding to business risk

Review of selection methods and response policies for majorrisks, promotion of information security measures for digitaltransformation and communication technology operations,and enhancement of the business continuity plan

To be considered in November 2023
in response to the revised
medium-term management plan andannounced during fiscal 2025

Strengthened management of key performance indicatorsand verification of cost-effectiveness to improve theeffectiveness of medium- to long-term strategies
Execution of the management strategy
and clarification of roles and authority

Implementation of business portfolio management
to realize growthEstablishment of an executive structure for timely andappropriate decision-making

INTEGRATED REPORT 2023

■ 30

Major Items of the Revised Medium-Term Management Plan (Domestic Business) ■Domestic Business Strategy (A Message from Wacoal Corp. President)

We will empower each and every customer by returning
to an approach from the customer’s point of view

Keisuke Kawanishi
Representative Director, President and CEO
Wacoal Corp.

Revision of our Medium-Term Management Plan
Since assuming office as President and CEO in April 2023, I

strategy, which we have set as our growth strategy, we will

have been working with internal and external members to

evolve into a new Wacoal that can quickly respond to theinspect our company and review our management strategy inchanging needs of customers and the market.

preparation for the start of “a new Wacoal.” With theRegarding our performance plan, we have revised ourannouncement of the revised medium-term management

sales target for the fiscal year ending March 31, 2026 down toplan, I have made the decision to record approximately ¥6¥94 billion, taking into account the impact of the selection andbillion in structural reform expenses in the financial results forconcentration of brands and withdrawal of loss-making storesthe fiscal year ending March 31, 2024. I believe that myas a result of structural reforms, as well as the fact that it will

mission as President and CEO is nothing other than totake a certain amount of time before the results of our growthtransform Wacoal into a highly profitable company based on

strategy are realized. We have also revised our business profit

this decision. In the revised medium-term management plantarget downward. However, we will place priority on changing

period, I am determined to reform our business model withour business structure to one that can secure a certain level

strong resolve in order to transform Wacoal into a structureof profitability even in the face of declining revenue, thanks tothat can ensure high profitability even in an increasingly severe

the effects of cost structure reforms. First, we will work

external environment. And through strengthening ourthrough the committed target figures, which will lead to growthcustomer strategies, brand strategies, and human resourcefrom the next medium-term management plan onward.

31 ■ WACOAL HOLDINGS

What We Want to Achieve through Corporate Transformation
To date, Wacoal has undertaken a variety of initiatives toservices from the customer’s point of view and not missrecover its business performance, but, unfortunately, they

opportunities to cater to them. We will implement

have not been able to produce results. We recognize that thecustomer-driven brand management and communication

reason behind this is that we have not properly faced changes

measures to ensure that our customers correctly understandin our customers’ needs; in other words, we have lacked a

the value we provide. In order to become a company that cancustomer perspective. Through our own inspections, we have

put these goals into practice, we will implement SCM reforms

confirmed that, unfortunately, each of our functions, such asthat allow us to respond flexibly to changes in customer andmanufacturing and sales, which we used to consider ourmarket needs, and evolve into an organization that canstrengths, has weakened. For example, bras, with their wide

implement measures for improvement with quick

variety of sizes and colors, have a product characteristic thatdecision-making and high business efficiency. In addition toresults in high SKUs*. The system to maximize sales andmaximizing the value we provide to our customers, we willprofits while optimizing inventory was a strong management

reestablish a series of processes that will lead to the next

foundation supporting Wacoal’s business model, but thestage of growth by allocating the cash we receive as

accuracy of management declined as each operation becamecompensation for our efforts to invest in human resources

more efficient and the division of labor was promoted. In

and growth.

addition, we have confirmed that we have not been able toFortunately, we have a large customer base and thefully share with our clients the inventory management of

manufacturing and sales capabilities to respond to customer

hot-selling products and the promotion of their development

needs. We believe that by updating these capabilities fromin the face of their increasingly restrictive inventory policies.

the customer’s point of view, we can achieve renewed

This means that our supply chain management (SCM) has not

growth. In addition, our employees have diverse values andbeen able to respond to the diversification of customers’

personalities, but I regret that we are not making the best use

needs and the shortening of trends. Our insistence onof this diversity. Another issue for our company is thatmaintaining our existing supply chain structure in the face of

because we operate as a vertically integrated organization,changes in customer needs and the distribution environment

the idea of partial optimization has permeated our operations,has resulted in dysfunction in various areas, leading toand we are weak in making decisions and taking actions that

long-term sales stagnation and excessive inventories.

are optimal for the entire company. By supporting the growth

Through this corporate transformation, our goal is toof each and every employee, we hope to turn this diversity

become a company, organization, and group of employees

into a driving force for growth.

that can think and review ourselves from the customer’s point*SKU (Stock Keeping Unit): Unit for counting the minimum number of itemsof view, and act accordingly. We will develop products andWacoal of the Future

Wacoal of the Past
Value
proposition• Providing value based on the results of our research• Uniform marketing for all customers• In addition to providing value based on the results of our research, we will provide
products and services that empower each customer’s individuality based on thevalues of diverse customer

Brand
strategies• Over reliance on our strengths, the “product.”• Lack of clear brand marketing strategies• Through brand management thoroughly from the customer’s point of view, we will
cultivate attractive brands with clear value• Making the innerwear market itself attractive

Customerstrategies• Customer directory management through in-store
beauty advisors (BA)
• Completing the integration of the customer data
infrastructure and starting to use the data

• Increasing loyalty through the use of customer data
• Building deep, broad, and long term relationships with each and every customer
through personalized customer experiences and improving LTV

Supply chain
management(SCM)• Due to the product planning and development leadtime (LT), which takes more than one year to
product development, a gap between demandand production planning tends to occur

Coststructure• High cost structure

Decisionmaking• Various coordination tasks hinder prompt decision making• The responsibility for management strategy is not clear• Partial optimization (lack of progress that requires
coordination)

Revisedmedium-term
managementplan• Building demand-linked supply chain management that can flexibly respond tochanges in the market and customerz• Achieving an optimal cost structure thorough rigorous selection and focus• Accelerating decision making• Optimizing responsibilities for business profit• Increasing productivity throughout the Company by achieving overall optimization

INTEGRATED REPORT 2023

■ 32

Major Items of the Revised Medium-Term Management Plan (Domestic Business) ■Domestic Business Strategy (A Message from Wacoal Corp. President)
How We Will Promote Business Model Reform
In order to move Wacoal in this direction, I would like to talkabout three points: (1) What kind of business model reform

shorten planning and development LT.
To optimize the in-store product lineup, we will review the

we will promote, (2) What kind of value creation company weexisting uniform product lineup and delivery style of new

will evolve into, and (3) How we will promote a positive

products, and promote reform to a system that reliably

change in mindset to realize our goals.

delivers the best-selling products to the store shelves. We

As mentioned above, we consider the fact that our SCM

have already begun trial operations at several volume retailers,

is not able to respond to the diversification of customers’

and have confirmed the effectiveness of this system inneeds and the shortening of trends to be a major issue that

improving sales. Based on the results of these trials, we willneeds to be resolved. We will work quickly to shorten the lead

begin operations at other stores of clients who havetime (LT) from manufacturing to sales, which currently takes

cooperated with us in the trial in the fiscal year ending March

14 months, to enable the rapid development of products that31, 2024, and will also begin trials at other clients. By quickly

match trends, and to optimize the lineup of products

expanding the range of target stores, we will strive to reducedemanded by customers while reducing overall inventory.

sales opportunity losses. In addition, we believe that

While this SCM reform has the aspect of cost structure

demand-linked production, an initiative to change from theoptimization, it is also a growth strategy because it directly

conventional batch production method to a production

leads to profit growth through smooth development andmethod that matches the demand situation at stores, will leaddeployment of products that meet customer needs, accurate

to an improvement in the sufficiency ratio of hot-selling

additional production of hot-selling products, and inventory

products. Shortening the planning and development LT is ancontrol as a result. In the future, we plan to enhance our ability

initiative to shorten the LT from development to delivery by

to respond to customer needs in three specific steps byutilizing existing patterns and reviewing business processes

building a demand-driven SCM system that also makes use

such as planning and development meetings. We intend toof digital technology. First, we will optimize the composition of

improve sales activities by speeding up the launch of products

products in stores, second, we will shift to productionthat meet customer needs.

methods that match the demand situation, and third, we will

What Kind of Value Creation Company We Will Evolve Into
From the customer’s point of view, value-added products

this area, but Wacoal is not able to offer sufficient proposals.

must be expensive, and those that are not must be priced

Naturally, needs and values differ by segment, so the profit

commensurately or customers will not choose them. We

structure is not uniform. We need to carefully examine what isbelieve it is important to carefully communicate and properly

required in each segment, decide which brands should playdemonstrate to customers why products are priced the way

what role in the entire company, and in some cases, since thethey are. In our recent business performance, sales ofcurrent brands are not enough to cover the needs, consider

products in the high price range have been strong, while sales

deploying additional brands. We will make decisions based onof products in the middle price range (¥4,000-6,000) havea careful look at our customers. In areas other than innerwear,

been sluggish. One reason for this is that the price of thewe aim to expand our business in the areas of beauty,

products does not match the quality of value demanded by

comfort, and health, including body data obtained from ourcustomers. As with SCM, the theme of the revised

3D measurement services, personalized services utilizing

medium-term management plan is to change brand andresearch on the mind and body at the Human Sciencecustomer strategies to adapt to the times.

Research & Development Center, and strengthening our

In formulating our brand portfolio, we have determinedthat we do not have sufficient response within the framework

sports business such as CW-X.
The key to our customer strategy is the use of digitalof our existing brands in the areas of High premium,technology. In addition to the effective use of body shape data

Affordable, Young people, and Seniors. We believe that whenand ID-POS (customer purchase record data), we intend to

we apply our current brands, there is a market opportunity inuse digital technology to analyze data such as customer

33 ■ WACOAL HOLDINGS

opinions and customer service knowledge of beauty advisors

and we will continue to improve the accuracy of(BA), which are our hitherto untapped strengths, to improve

communication to meet diversifying customer preferences

the value of the customer experience. In addition, 3D

and appropriately convey the value that we offer. In the fiscal

measurement services and apps will be used in combination

year ending March 31, 2024, we are renaming “SCANBE”

to provide a consistent and highly satisfying customer

and reviewing the service content. We will evolve thisexperience both in physical stores and online. The productservice beyond the benefit of “knowing your size in 5

reviews that we have already begun, in which beauty advisors

seconds” to help customers find the best solution for theirintroduce products online, have been extremely successful,individual needs.

How We Will Promote a Positive Change in Mindset to Realize Our Goals
In formulating this revised medium-term management plan,

In this revised medium-term management plan, we

we have renewed our determination to evolve into a

intend to steer the company back toward growth bycompany that responds to the diversifying values of ourrebuilding the organization and operating from thecustomers, and have defined the value we will provide as

customer’s point of view. We intend to promote“empowering the individuality of each and every customer.”

communication within the company and strive to create an

We recognize that Wacoal’s strength is not in providingorganization that can respond to diverse customers with auniform value, but in offering products and services thatsense of speed. As mentioned earlier, our potential in terms

respond to diversity and can be tailored to a variety ofof brand and customer service has not declined. We intend

customers. The only way to achieve our goals is toto strengthen our investment in human capital during therepeatedly take on challenges and improve our ability torevised medium-term management plan period, thereby

respond to change through a high-speed PDCA cycle. What

helping each employee to maximize their diverse values andI strongly expect of our employees from now on is this ability

individuality. Although I have assumed the position of

to respond to change. It is necessary to be keenly aware

President and CEO in a difficult environment, I intend tothat the status quo will sink relative to the competition, andcarry on with my desire to make Wacoal a better company

to be willing to take on the challenge of change. Wacoal,and strive to achieve the revised medium-term management

which has been in business for more than 75 years, hasplan. We will also share the progress of thesestrengths in product quality and functionality, as well as intransformations with our investors and employees. We

the customer information it has accumulated over the years.

sincerely ask for the continued support of our stakeholders.

However, we have been in a prolonged slump because wehave somehow lost our customer-orientation. It is not aneasy task, but unless we get rid of the culture of maintaining
the status quo, we will not be able to escape from thelong-term stagnation.

INTEGRATED REPORT 2023

■ 34

Major Items of the Revised Medium-Term Management Plan (Domestic Business) ■Key Initiatives in Wacoal’s Revised Medium-Term Management Plan

Key Initiatives in the Revised Medium-Term Management Plan
In order to transform our business structure into one that can secure high profitability even in an increasingly challenging external
environment, we will first implement cost structure reforms and strengthen our brand strength, customer loyalty, and humanresource to achieve a return to growth. In addition, to become a new Wacoal that can quickly respond to changes in customer andmarket needs, we will utilize digital technology and establish demand-linked supply chain management (SCM).

Business Model Reform
Supply Chain Management Reform
Reform Wacoal Corp.’s supply chain management in order to respond quickly to changes in customer needs and the market environment. Build acustomer-driven, demand-driven SCM by leveraging digital technology and optimize the cost structure through thorough selection and concentration
Process for establishing supply chain management linked to demand

2

Demand-linked
production

3

Shortening planning anddevelopment lead time (LT)

●

●

●

●

By reviewing the uniform product mix and delivery style of new products,
we establish a model that reliably delivers top-selling products to stores(including e-commerce)

Operational establishment within the period of
the revised medium-term management plan

Changing the production system to match the demand situation at thestore, optimizing/reducing excess inventories

Trial from standard products and gradually
become operational within the revised
medium-term management plan period

Shortening development and delivery LT by utilizing existing patterns andreviewing business processes such as planning and development meetings
Accelerating the PDCA cycle and the launch of products that meetcustomer needs

By the FY2025, we will gradually change
the business process and try shortenedadditional plans

1 Optimizing in-store product lineup

2 Demand-linked production

Reviewing the product lineup to matchthe sales performance of the store, andoptimizing in-store inventories

Suppressing excess inventories by replenishingproduction in line with store sales
Ordering in line with sales
trends for each product

Delivery to meet

Head office/in-store demands
distribution warehouse

In-store/EC

Current status: A uniform product lineup anduniform delivery of new products that are notfully suited to the sales situation at the store
and customer characteristics

PlantsOrdering in linewith the season

3 Shortening planning and development lead time (LT)(2) Demandlinked planning

Optimizing in-store
product lineup(1) Shortening
current-stateprocesses

1

Delivery in line withthe production plan

Shortening

Development
Material ordering to sewing

Shortening
Additional
response thatmeets needs
Shortening

Development to delivery LT: 6 months
Development
Material ordering to sewing

Reviewing
work
processes

Development to delivery LT:14 months→11 months

Cost Structure Reform
In order to restore Wacoal (Japan)’s basic profitability, a radical cost structure reform will be implemented. Setting reduction target to ¥7 billion.
We plan to improve the sales profit ratio by 3 pts to 4 pts and SG&A expenses by 4 pts to 5 pts by fiscal 2026 (compared to fiscal 2023)
Specific Cost Structure Reform Initiatives
Implementation timing

Effects

Brand focus
and selection
Reducing
production
costs
Reducing
production andmaterial costs
Improving
the profit andloss of stores
Offering
voluntary
retirement
Optimizing othersales promotion
expenses
Reducing
distribution
costs, etc.

●
●

●
●

●

Aggregating production lines
will start at 24AW and becompleted during FY2025¥1.9 billion

Improving inspection process efficiency
Reducing man hours by aggregating productnumbers, etc.

●

Will be completed by FY2025¥0.6 billion

Reviewing the production system
Aggregating materials and master colors●

Will be completed by FY2025¥0.4 billion

Reviewing the terms and conditions of businesswith business partners● Withdrawing stores that are in the red (up to 32 stores)● Optimizing personnel in order to improve productivity●●

Considering the withdrawal fromstores that are in the red and thosethat are not expected to revise
transaction terms during FY2024¥0.9 billion

Will be completed by FY2024¥0.9 billion

Optimizing personnel in order to improve
productivity●●

Optimizing expenses for IT
Optimizing advertising/promotion costs●

Will be completed by FY2025¥1.6 billion●

Improving distribution business profitability●

Will be completed by FY2025¥0.6 billion●●

Approx. ¥7.0 billion

35 ■ WACOAL HOLDINGS

Wacoal: Figures for the FY2026
business plan
Based on the effects of cost structure reforms
and the results of growth strategies, the revenue
levels of ¥94 billion and business profit of ¥6 billion(6.4%) have been set as hurdle rates in therevised medium term management plan

Improving sales profit
Sales profit ratio
56%⇒59%(Approx. 3pt improvement)

FY202694¥
billion

SG&A expenses

Reducing losses on returns and discounting by
aggregating product numbers, etc.
(Reducing production lines by approx. 40% and thenumber of product number by more than 10%)
● Reviewing sales price setting●

Cost of sales

Specific activities

Implemented items

SG&A expenses
Cost improvement
SG&A expenses
ratio
57%⇒53%(Approx. 4pt
improvement)

6¥billion

Sales revenue

6.4%

Business profitA virtuous cycle to aim for

Quantitative Targets for Wacoal (* including internal sales)Highprofitability
structure

Sales
increasing

Increased
investment
in human
resourcesdevelopment

Developmentof human
resourcesand deepening
the value
provided

Initial goal

Revised target

FY2025

FY2026

Sales revenue¥110 billion

Business profit¥7.5 billion

Business profit margin

6.8%¥94 billion+1 year¥6 billion
6.4%

Growth Strategies
Customer Strategies
In order to build deep, broad, and long-term relationships with customers, we will thoroughly utilize digital technologies to provide the best customer
experience for each person
Use of digital technologies
1. Rebuilding the value chain from the customer’s point of view. Fully leveraging customer data, customer feedback, andbeauty advisor (BA) insights

DX

2. Creating consistent and highly satisfying customer experiences in physical stores and online through 3D measurement
services (SCANBE) and apps (WACOAL CARNET)
3. Identifying the development path of loyal customers and continuously monitoring management metrics to maximize LTV

Illustration of how customer
data can be used

Physical storesConsulting services
Handling reservations and orders

Stores implementing 3D
measurement service
Self-discovery

Analyzing customer/BA feedback andusing them to create sales floors
Use of accumulated body data
for manufacturing

Research
Planning

Customers
Data

Customers

Delivering a consistent customer
experience based on customer data

Apps
■EC
Personalized recommendations
based on customer data
Product reviews froma BA’s viewpoint

Brand Strategies
With thorough brand management from the customer’s point of view, we will develop an attractive brand with clear values
Developing products and services tailored to each segment to meet the diverse values of customers and empower them
to be themselves.
●

1

Brand portfolio tailoredto market segments

Innerwear●

Rebranding Wacoal

2

Other thaninnerwear

Expanding our “beauty,
comfort, and health”
business

By clarifying the value we provide to customers, expand the customer
base targeting young and affordable customers, and providing productsthat meet diverse customer needs, we will develop brands with an eye
on long term connections with customers and expand LTV

Starting from the 24 AW
season productFrom a brand that creates “beauty” to a brand that creates encounterswith a “new you and new possibilities.” Rebranding our core brand,
Wacoal, to improve its value

FY2028 ¥45 billion
125% compared to FY2023(CAGR4.6%)

Expanding the beauty, comfort, and health business by utilizing ourknowledge cultivated in the innerwear business
Personalized services using 3D measurement services and data
● Strengthening sports business such as CW-X●●

FY2031 ¥20 billion

About market segments
Age group
15 to 19 yrs old

20 to 29 yrs old

30 to 39 yrs oldHigh premium

40 to 49 yrs old

50 to 59 yrs old

Age 60 and above

High premium

Premium

Price range

Analyzing the market
attractiveness of each segment
based on the “compound annual
growth rate” x “bra market size”
for fiscal 2019 to fiscal 2023
Setting market segments anddeveloping brand strategies inline with the strengthened
segments (market attractivenessof each market segment andother information not disclosed)

BetterYoung people

Rebranded Wacoal

Seniors

Moderate
Affordable

Affordable

Cost saving

INTEGRATED REPORT 2023

■ 36

Major Items of the Revised Medium-Term Management Plan (Domestic Business) ■Marketing Reform

Reviewing the value provided from the customer’s pointof view and cultivating an attractive brand:
The current place of marketing reformIn the revised medium-term management plan, the value that Wacoal will provide in the future is defined as “empowering
customers to be themselves.” What are the goals of Wacoal’s marketing activities as it moves toward further reform?

Shigekazu Sugiyama

Atsuko Shinoduka

Marketing Advisor, Wacoal Corp.
(Representative of SEN Marketing)Corporate Officer In charge of the Group DX Marketing Strategy
Director Corporate Officer Head of Marketing Div. of Wacoal Corp.

What are Wacoal’s marketing challenges?
—Please tell us how you came to be appointed as atheir offerings is, and whether it matches what theirmarketing advisor.

customers are looking for. In many cases, these are not wellconnected, and I hypothesized that this might be the case for

Sugiyama: Around the fall of 2022, I was approached by

Wacoal as well.

Wacoal and asked if I could help them strengthen theirmarketing efforts. Having had experience in marketing at a

—Was it the case?

cosmetics manufacturer, I decided to take on the role ofadvisor in the hope that I could help Wacoal, which alsoSugiyama: I had heard that Wacoal lacked a strategic

targets women as its main customers, to solve its problems.

approach to marketing, but I was honestly surprised to see

There are many companies that have marketingthat the company is engaged in an amazingly wide range ofchallenges, but I find that the challenges are not very different.

activities. For example, they continue to analyze customer

The problem is basically to analyze the market, where they aresegmentation, purchase data, and consumer surveys. I also

going to offer their products and services, what the value of

had the impression that progress is being made in integrating

37 ■ WACOAL HOLDINGS
customer databases. However, I also felt that each of thesemeant. Whether we were talking about advertising, needs

surveys and analyses were independent and not well “linked”

analysis, or research, each department’s understanding ofto product development and in-store sales promotion.

marketing was not consistent, so it was natural that

Therefore, I first proposed ways to link and utilize the current

discussions would fall apart. It is said that “the challenge ismarketing research and analysis, and then worked to visualize

marketing,” but without a clear understanding of what thethe current issues so that marketing investments could becompany-wide issue is, if each department works individually

made effectively.

on its own idea of marketing, it will never lead to a real
solution. Therefore, we decided that the first priority was to—Ms. Shinoduka, you assumed the position of Head of thedefine marketing in our company as “all activities that create

Marketing Division in April. What challenges did you see whenvalue for customers.” We believed that if the members

you started?

involved could connect Wacoal’s current issues from thecustomer’s point of view and grasp the overall picture, we

Shinoduka: In the beginning, there was no common language

would be able to take the most appropriate steps.

within the company as to what “Wacoal’s marketing activities”

Clarifying the value provided by each brand and developing a company-wide brandstrategy map—How did you go about developing your market segments—Once you had organized the value offered by each brand,

and strategy map?

how did you segment the market?

Sugiyama: First of all, we made a list of the values that each

Sugiyama: In the case of innerwear, changes in body shapebrand offers. I had a suspicion that maybe we would list theare a major factor in product selection, so President

same things under all the brands. When we discussed the

Kawanishi, who was then General Manager of the Marketingtwo main points of “value provided (what the brand delivers toDivision, decided to create a strategy map that identified

customers)” and “difference from other brands,” we foundwhere the market had the greatest potential for growth bythat all brands except Salute and Yue had almost the same

segmenting products based on price range and age, and thenkind of value provided. What we found most worrisome wasdetermining which priorities to address.

that the value offered by Wacoal and Wing was very similar.

Based on this strategy map, we also decided to clearly

We expected that the offering values would be similar since

determine the areas that Wacoal will not target. Specifically,

the brands were originally created based on a channel-

we have clarified that Wacoal’s strategy is not to target the

specific concept, but the channel-specific concept is not in

low-priced segment, which is losing market share to otherline with current consumer purchasing behavior, so it would

brands. In addition, we have set our priority focus segments

be very inefficient if the brands’ offered values were notas young people, affordable, seniors, and high premium. We

clearly separated.

are now at the stage of deciding which brands to strengthen
in these priority segments.

—How was the reception of the members?
Shinoduka: As for the results of the consumer survey, the firstSugiyama: Since each brand manager looked only at theirand second most influential factors in purchasing innerwear

own brand, they may not have been aware of the overlap, orare price range and age. We believe that axing factors that

if they were aware of it, they may not have seen it as a major

can be quantified as absolute values and for which there is

problem. When we asked them to think about it over andresearch evidence, rather than values and subjectivities thatover again, some of them asked why there had to be aare perceived differently by different people, is good in terms

difference in the value provided by the brands. That was theof being able to continuously track whether the products andstarting point.

services we provide are truly supported by customers.

INTEGRATED REPORT 2023

■ 38

Major Items of the Revised Medium-Term Management Plan (Domestic Business) ■Marketing Reform
Cultivating a brand where customers can feel a connection and a promise,and building a deep relationship of trust
best business situation is to create a virtuous cycle in which a—What are the key points of this brand strategy?

small investment efficiently generates profit, which is then
Shinoduka: I think the most important point of our brandreinvested. A brand is something that takes root among

strategy is to better clarify what kind of value our brand canconsumers, and when a brand takes root among consumers,

provide. Since we have presented market segments for theit can efficiently continue its relationship with customers.

first time, we tend to talk about segments such as affordable

However, a brand must have a solid value, and if the valueand high premium, but what is really important is the value wechanges from season to season, a long relationship with theprovide. Earlier, Mr. Sugiyama mentioned that when we

customer cannot be established. What can Wacoal promise

articulated the value propositions of our brands, they were all

to its customers over the long term? Is there more to

the same, but this is the worst thing we could do. What will

innerwear than just security and comfort? I tell them that webe important in the future is to clearly define the value

should have a thorough discussion about what value theprovided by all brands, and to focus on what kind of customer

brand can offer from such a perspective.

experience the customers who support the brand want. I
believe that the rebranding of Wacoal will be a symbol of this.

—And as for the customer strategy, DX is the key point,
isn’t it?

—How are you proceeding with the rebranding of Wacoal?
Shinoduka: In the revised medium-term management plan,
Shinoduka: We had been considering a rebrand since last

we have defined the value we will provide as “empowering

year, but we were still unclear about what Wacoal was. The

each customers’ individuality” in order to evolve into avalue provided by the Wacoal brand is often described ascorporate entity that responds to the diversification of“cradle to cradle,” but it is not clear what exactly the brandcustomer values. We will continue to provide optimal

provides from cradle to cradle. The members who are actuallycustomer experiences for each of our customers, andin charge of the brand have also been complaining that they

digitalization is the key to this. Digitalization andcannot see the face of Wacoal because of the wide variety of

personalization go hand in hand, and we believe that the use

products. I think it is difficult for customers to build aof digital technology will be very effective as we aim torelationship with something when they don’t know what it

empower each and every Wacoal customer to be themselves.

really is. We asked Mr. Sugiyama to provide us with advice on

While the body shape data accumulated by Wacoal’s

how to build a relationship with customers over the medium

Human Science Research & Development Center over its

to long term with regard to the value that Wacoal provides,

60-year history and customer data through its 3Dand he was involved in the rebranding process.

measurement service are certainly our strengths, on the other
hand, data is only valuable if it is used in some way. In thisSugiyama: In discussing this with the members, we also

respect, I feel that we are not making full use of the feedback

talked about why branding is necessary in the first place. Theof our customers and of our beauty advisors who are in daily

ProfileShigekazu Sugiyama
After working for Lion Corporation and Coca-Cola (Japan) Company,
Limited, he joined Shiseido Company, Limited in 2009 and became President
and Representative Director of Shiseido Japan Co., Ltd. in 2017. In 2020, he
retired from Shiseido and established SEN Marketing. In November 2022, hebecame Marketing Advisor for Wacoal Corp.

39 ■ WACOAL HOLDINGSProfile

Atsuko Shinoduka

Joined Wacoal Corp. in 2005. After working as a sales representative for department stores, she wasin charge of overseas e-commerce business support, business restructuring and M&A, as well asbrand manager and MD for subsidiaries. In 2017, she was transferred to the Omni-Channel Strategy
Promotion Department of the General Planning Office, and in April 2023, she was appointed Director,
Corporate Officer, and Head of the Marketing Division of Wacoal Corp.

contact with the customers in our stores. If we can pick up on

customers want to solve, I feel that we can make more

small feedback that might have been drowned out in the past,interesting and appealing proposals.

and if we can take advantage of the strengths of digital

We believe that it is an important mission of Wacoal totechnology, which removes the physical and time constraints

revitalize the innerwear market itself as a more exciting one bythat existed until now, and capture the needs and insights that

proposing new values.

What Wacoal needs from now on is a reform of “awareness” and “mechanisms”—What will it take for Wacoal to return to a strong growth—Ms. Shinoduka, in what ways do you hope to realize

trajectory?

Wacoal’s value creation in the future?

Shinoduka: Human resource utilization and development. For

Shinoduka: In this revised medium-term business plan, we

example, in the Marketing Division, we have started ahave decided to place “empowering individuality” at the corecross-sectional project this fiscal year to gather chief-levelof the value we provide, and I believe this applies not only tomembers who are candidates for next-generation leaders.

our customers but also to our employees. If each employee

Mr. Sugiyama has been heavily involved in this project as well.

can maximize his or her strengths, it will lead to good
performance for the company and provide good value to our

Sugiyama: Each member of the project is aware of the issues

customers. I have some regrets when I think back about

and understands the bottlenecks to solving them. However, atwhether our corporate environment has been conducive tothe beginning of the discussion, they took the stance that itdemonstrating our strengths, but I am also positive that there

was not their job to remove the bottleneck. “My duties end

are many things that can be improved going forward. I believe

here. I think we can do better if the walls are removed, but it isthat it is precisely because we are now facing a difficult

not my role to break down the walls.” This habit of thinking isbusiness climate that new seeds of growth are easily born.

part of the culture that needs to be changed at Wacoal. So,

As Mr. Sugiyama pointed out to me, at Wacoal, we often

Mr. Shinozuka and I started asking them, “Who else is goinghear talk of dropping decisions made at various meeting into

to break down these walls if you aren’t going to?” Then,the workplace. However, we are now in an era of absorbing

gradually, people began to change their mindset.

rather than dropping in. In this era of change, just top-down is
too slow. The hints for improving Wacoal are found in the field.

Shinoduka: This change also applies to marketing strategy

We will establish a system to absorb voices and responses

proposals. In the past, the Marketing Division’s role in market

from the frontlines, and a process to promote autonomy ofresearch and consumer surveys was to present the results ofthe frontlines, utilizing digital technology as well. I would like all

the analysis, but from this time, the role has changed toof us at Wacoal to work together to create products andproactively proposing brand strategies based on the results ofservices that empower both our customers and ourselves by

the analysis. I think we are now able to make proposals withvaluing the small voices that have been raised in the field but

the determination that we are the ones who decide thehave not been heard, as well as the hidden thoughts that

direction of the brand.

have not even been voiced in the first place.

—An awareness that you are the ones creating the brand.
Sugiyama: Wacoal has all the strengths and human resources
to create powerful and exciting value. I think it is important tohave a sense of urgency and a “can do” attitude.

INTEGRATED REPORT 2023

■ 40

Major Items of the Revised Medium-Term Management Plan (Overseas Business) ■Key Initiatives in the Revised Medium-Term Management Plan (Overseas Business)

Key Initiatives in the Revised Medium-Term Management Plan
Assuming that the situation will continue to be uncertain, we will prioritize profit generation in fiscal 2024 to fiscal 2025 in each key
company while working to improve our management base and implementing growth strategies for the next medium-term
management plan

1. Growing EC
Expanding contact points with customers and achieving EC growth by promoting digitalstrategies (OMO, CRM, Asia EC platform)

Growth strategies

2. Developing and providing new products thatmeet market trends
Expanding contact points with new customers by developing and selling new products basedon market trend analyses in China and other countries in Asia

Basic
Strategies

Strengthening supply
chain management

Reviewing strategies
for inefficientbusinesses(1) Optimizing production and material procurement processes in overseas business(2) Reducing manufacturing costs by reorganizing the supply system within the Group(3) Expanding the supply network outside the Company to strengthen the affordable market in
China and Asia

Withdrawal of LIVELY brand (IO)
After considering various possibilities for future business development, we determined that
it would be difficult to improve the performance of the business in the future, and decided
to withdraw

Withdrawing from the LIVELY business of Intimates Online, Inc., a U.S. subsidiary,and liquidating the company
Intimates Online, Inc. has developed its business since its acquisition in July 2019, using its own e-commerce as its primary sales channel and new digital
media, particularly social media, as a communication tool with its customers; however, sales fell short of the plan due to the entry of competitors into the digitalmarket and restrictions on targeted advertising due to increasing restrictions on the use of personal information. After considering various possibilities for futurebusiness development, we have determined that it will be difficult to improve the performance of this business in the future and have resolved to withdraw from
it. As a result of the withdrawal from this business, we will record a loss of approximately ¥7.3 billion, mainly consisting of impairment loss on goodwill related to
Wacoal International in the fiscal year ending March 31, 2024.
Sales

Acquisition prices

Operating income(Unit: thousands of dollars)(Unit: thousands of dollars)

15,000100,000

Businessplan figures
at the time ofacquisition

80,000039,321
34,235

FY202029,80629,366(10,000)(20,000)

41 ■ WACOAL HOLDINGSFY2021 FY2022

FY2023

FY2024(Estimate)

Earnout payments—

26,82526,82586,041

26,825

112,866

Company name

Representative(11,494)0—Address(6,000)(15,000)

11,967

Business
description
Capital(12,194)

Total

86,041

86,041

Summary of Intimates Online, Inc.

FY2024FY2023 (Estimate)(5,000)20,000

FY2020

FY2021 FY2022

FY2021

Acquisition prices

Total

5,000

60,00040,000Businessplan figures
at the time ofacquisition

10,000(Unit: thousands of dollars)

FY2020(12,885)(14,259)

In the medium-term management planannounced in June 2022, we plan toachieve the break even point in FY2024

Date ofestablishment
Date ofacquisition
Shareholders

Intimates Online, Inc.
136 Madison Avenue New York NY 10016 USA
Kristin DiCunzolo
Planning and sales of female innerwear
433 dollars
May 1, 2015
July 30, 2019
WACOAL INERNATIONAL CORP. (100% capital ratio)

2

3

1

4

Major Subsidiaries’ Initiatives
1

Wacoal America, Inc.
(Wacoal International Corp.)

We will review the plan based on the current external environment. While
working to grow the EC business, we will begin to review our cost structure toaddress the decrease in profit ratio due to increased costs.

●Accelerating the transition to an EC-focused business model
Achieving continuous growth in the EC business by developing new competitive compensation product groups and strengthening CRM centered on digital
fitting services●Reviewing cost structure
In order to address the pressure of costs, we will review retail prices, promote automation of distribution operations (automatic picking, etc.), reduce
procurement costs, and begin reviewing our business model to optimize our cost structure2

Wacoal Europe Ltd.

In addition to promoting brand strategies to meet the diverse values ofcustomers, we will also form and promote growth strategies in regions with roomfor growth, such as Germany and France.

●Accelerating the transition to an EC focused business model
Improving the efficiency of the Dutch warehouse, strengthening EC business outside the UK (development of Wacoal’s own EC, collaboration with othercompanies’ EC)●Increase sales in continental Europe
In addition to cultivating existing areas, we will strengthen sales activities in Germany and France, where there is significant room for growth
In addition to expanding our sales network, including EC and brick-and-mortar stores, we will also consider alliances and M&As with other companies toachieve growth with quality and speed

3

Wacoal China Co., Ltd.

Through a brand strategies (product functions, prices, and promotions) that
achieve EC growth, we aim to return to sales and at the same time embark on abusiness model reform to improve profitability.

●Developing products that meet customer needs(1) Strengthening our ability to respond to changes in customer purchasing behavior, needs, and product trends. Conducting purchase analysis in major EC
marketplaces, formulating and executing brand strategies (product functions, prices, promotions), and aiming for EC growth(2) Developing sports and athleisure products and expansion of high-end products●Improving management efficiency
Reviewing our cost structure to improve profitability
Withdrawing poorly-performing stores and reducing inventories

4

Other Countries in Asia

Cooperate among Asian subsidiaries under the Asian headquarters system. We
will implement measures that take advantage of the strengths of our own EC andother companies’ EC to achieve growth.

Expanding customer contact points and improving LTV(1) Other companies’ EC: Focusing on acquiring new customers by strategically strengthening cooperation with EC marketplaces(2) Wacoal own EC: We will enhance our own content, such as membership programs, and accelerate collaboration with brick-and-mortar stores
Strengthening business in India(1) In addition to the existing premium line, new affordable products will be developed to expand the customer base (24AW)(2) Implementation of product planning in India and improvement of domestic procurement ratio

INTEGRATED REPORT 2023

■ 42

Main Items in Revised Plan (Overseas Business) ■Global Initiatives

U.S.
Note: Results and targets arefor Wacoal America,
Inc. only. Includes
internal sales revenue.
FY2026 targets are
based on internalmanagement figures.

FY2023

FY2026 target

Sales Revenue

184.2 million

198.7 million

Business Profit

10.6 million

9.4 million

Business Profit
ratio

5.8%

4.7%

US dollars

US dollars

US dollars

US dollars

Mitch Kauffman
President & CEO
Wacoal America, Inc.

Current Situation and Issues Faced by Each Subsidiary

Specific Initiatives for Achieving the Revised Plan

Since the post COVID sales surge of FY 2021 Wacoal America has been
faced with a very different business environment which has challenged bothsales growth and profitability. Consumer trends of casual dressing and theprioritization of spending on experiences over things, along with inflation has
resulted in declining sales for apparel and Department Stores. Digital privacy
initiatives and higher advertising costs have slowed the rate of online sales
growth. Government mandated wage increases at our Wacoal Dominicana
factory along with higher freight and material costs continue to put pressure
on gross margins. Wage and benefit inflation in the U.S. have also driven
other expense growth. These challenges together have resulted in a
reduction in historical Operating Profit levels. During the period of themedium-term management plan (Revise), we intend to focus on addressingthese issues.

To address the sales and profitability challenges and achieve our plan goals,
a key strategy continues to be growing our DTC online business. Wacoal
Direct online is our fastest growing (107% of LY through H1 ’23) and mostprofitable business (19.7% Op. Inc through H1 ’23). During the period of themedium-term management plan (Revise), We will continue to invest in
infrastructure (CRM system, and Loyalty program) that will enable us torealize further growth of the DTC online business. In addition, to improve
profitability, we have taken wholesale and retail price increases this year andtook steps to reduce material costs. From now on, we are also diversifying
our production by placing more new programs with contractors that can offer
needed technical capabilities and/or better margins than we can achieve in
Wacoal Dominicana. Also, we will plan to optimize the cost structure by
optimizing staff in the Distribution Center and through a previously completed
restructure of the Sales Organization.

EuropeNote: Includes internal sales
revenue. Businessprofit includes branddepreciation expense.
FY2026 targets are
based on internalmanagement figures.

FY2023

FY2026 target

Sales Revenue

117.7 million

132.5 million

Business Profit

16.3 million

14.5 million

Business Profit
ratio

13.8%

10.9%

GB pounds

GB pounds

GB pounds

GB pounds

Geoff Embley
CEO
Wacoal Europe Ltd.

Current Situation and Issues Faced by Each Subsidiary

Specific Initiatives for Achieving the Revised Plan

Over the past year, most Western economies have experienced high inflation
rates, which has prompted central banks to raise interest rates.
Consequently, there has been a discernible reduction in consumer spending,with a notable shift toward risk aversion among retailers who are reluctant toinvest in inventory or commit to forward orders. The growth in e-commerce,
which witnessed an unprecedented rise during the COVID-19 pandemic, has
markedly decelerated with the relaxation of restrictions and the resurgence ofconsumers patronizing brick-and-mortar establishments. In addition,businesses within the e-commerce sector, are contending with escalating
digital advertising costs and the necessity to modify their operational models
in response to the impact of privacy initiatives on digital advertising.

To address these challenges related to market access and inventory
management, our strategic approach consists of three key initiatives. Firstly,
we aim to assert control over the route to market by expanding our
proprietary e-commerce platforms into new territories. Secondly, where
advantageous, we intend to adapt the traditional wholesale model tobroaden our reach to a larger audience. Additionally, we are willing to takecalculated risks on what we perceive as key performing styles. Thirdly, We
are also focused on reducing lead times for products, thereby enhancing thebusiness’s responsiveness to market changes. This, combined with more
stringent inventory collections, empowers us to deliver excellent service to
our customers. This strategic approach underscores our dedication toresilience and adaptability in navigating the ever-evolving landscape,reflecting our commitment to sustained growth and operational excellence.

43 ■ WACOAL HOLDINGS

China
Note: Includes internal sales
revenue. FY2026
targets are based oninternal management
figures. Sales bydepartment stores(store prices) are
included unchanged in
the totals.

FY2023

FY2026 target

Sales Revenue

525.4 million

660.0 million

Business Profit-34.9 million

44.0 million

Business Profit
ratio

renminbi

renminbi

renminbi

renminbi—

6.8%

Zhang Mao
Director and General Manager
Wacoal China Co., Ltd.

Current Situation and Issues Faced by Each Subsidiary

Specific Initiatives for Achieving the Revised Plan

The recovery of China’s economy after the lifting of the country’s zero-COVID
policy has been slow, and consumer spending has been sluggish. Our sales
have not even reached 70% of the pre-pandemic level, and we continue toface a challenging situation in terms of bottom line. Under thesecircumstances, we face three challenges. The first is to improve theefficiency of brick-and-mortar stores, where the bottom line is deteriorating
due to diminished customer traffic. The second is the restructuring of our
e-commerce business, which continues to underperform, despite the factthat the ratio of e-commerce to total retail sales in China has exceeded
50%. The third is to improve the efficiency of our organization andoperations and respond to changes in our business structure. In particular,
the e-commerce business is on the rise due to the diversification of
platforms, while our sales remain stuck at a low level. We will step up our
response to new platforms, raise visibility among young people, who are ourmain consumer group, and accelerate the development of products thatmeet their needs, while at the same time transforming our business structure
and returning to a growth trajectory.

In terms of brick-and-mortar stores, we will focus on increasing sales per
store by encouraging customers to return to the store by improving CRM.
Additionally, we will strive to increase the number of customers by improving
the loyalty program and increasing convenience, such as by standardizing
membership measures with our own e-commerce site. In terms of
unprofitable stores, we plan to improve business efficiency by optimizing thenumber of employees per store, while also restructuring. In the e-commercebusiness, we plan to increase the number of new customers among young
people by raising our visibility and renewing the brand image throughimproved sales promotion measures while opening stores on new platforms.
In addition, we will develop competitive products and strive to cultivate hit
products in conjunction with intensive promotions. Through these measures,
we will bring our e-commerce ratio up to the 30% level during the period of
the revised Medium-Term Management Plan. With regard to the issue of
profitability, we intend to improve our operating profit margin by expanding
sales through the above measures and reducing costs and SG&A ratio.

Asia
Note: Results and targets arefor Wacoal India only.
Includes internal sales
revenue. FY2026
targets are based oninternal management
figures.

FY2023

FY2026 target

Sales Revenue

402.3 million

733.1 million

Business Profit-91.1 million-89.0 million

Business Profit
ratio

Indian rupees

Indian rupees

Indian rupees—

Indian rupees—

Takehiko Yonekawa
CEO
Responsible for Asia Sales Headquarters
Wacoal Singapore Private Limited

Current Situation and Issues Faced by Each Subsidiary

Specific Initiatives for Achieving the Revised Plan

Our subsidiaries in Asia recovered well after the pandemic was brought
under control, but the situation remains challenging due to the subsequent
surge in inflation and the slowdown in China’s economic growth. In responseto rapid fluctuations in sales, it is becoming more difficult to secure profits
than before due to the increasing difficulty of inventory management andlarger SG&A expenses, such as labor costs and increased costs for store
and office rent. We are also seeing changes in customer buying channels
and product trends. As in Japan, e-commerce usage is increasing in Asian
countries, and demand for conventional highly molded or fitted innerwear has
decreased due to changes in values after the pandemic, and moreconsumers are seeking products with comfort in mind. This trend was also
evident in our analysis of the characteristics of the best-selling products ofmajor e-commerce marketplaces in China and Asia conducted in May 2023.
Delays in responding to changes in customers have become a common
issue for our subsidiaries in Asia.

In order to strengthen our sales structure and improve business efficiency in
Asia, we established a headquarters to oversee sales in Asia in April 2022.
The target is five companies in Singapore, Hong Kong, Malaysia, thePhilippines, and Vietnam. Under this new structure, we are also promoting
information sharing and coordination of measures among each company
while maintaining a basic policy of locally-led management. In order to
respond to the growing e-commerce market, we have developed a common
platform for our own e-commerce and have started rolling it out in eachcountry. In the future, we plan to strengthen cooperation withbrick-and-mortar stores centered on CRM. We will also conduct promotions
in cooperation with other companies' e-commerce companies in Asian
countries to raise brand visibility and acquire new customers. With regard to
the value we provide, which is an issue, we will develop products that meet
consumer needs based on “comfort of wear,” “affinity with fashion trends,”and “solutions tailored to the climate of Southeast Asia.” In addition, we will
share measures related to inventory and expense management in an effort toimprove the growth and profitability of our operations in Asia as a whole.

INTEGRATED REPORT 2023

■ 44

Major Items of the Revised Medium-Term Management Plan (Financial Strategy) ■A Message from the Director in Charge of Finance

We will transform our business model toimprove earnings and capital efficiency,transition into a stronger profit structure,
and achieve sustainable growth.

Akira Miyagi

45 ■ WACOAL HOLDINGS

Representative Director, Vice President, Executive Officer and CFO
Wacoal Holdings Corp.



Review of Fiscal 2023 and the Medium-Term Management Plan
Fiscal 2023 shed light on the weakness of the Group’s supply

inventories to increase significantly over the past two years. In

chain management in response to changes in customer

addition to overly optimistic market forecasts, there wereneeds and purchasing behavior. In some regions such as

inadequacies in management and supervisory functions,

Europe, we were able to maintain our growth trajectory due towhich limited the effectiveness of strategy, and many issues

strong sales of our core brands, but in Japan, China, and theremain to be addressed in order to enhance profitability.
We take seriously the fact that the results of fiscal 2023,

United States, results were significantly lower than initiallyplanned due to the effects of COVID-19, sluggish growth in

the first year of the medium-term management plan, fellcustomer traffic at our retail stores, and restraints on

significantly short, and determined that it will be impossible topurchases by business partners. In addition, due to the large

achieve the targets if we do not change the way we manage

impairment loss recorded in our U.S. operations, we recorded

the Company. For this reason, we decided to conduct aa loss for the first time since our founding. As previously

comprehensive review of our strategy. The revisedannounced, we expect to post a loss for fiscal 2024 due tomedium-term management plan was formulated with a strong

weaker sales, the impact of structural reforms, and an

intention to accept the reality that we are disconnected from

impairment loss recorded due to our exit from the U.S. We

our customers and the market, and to transition to a structure

fully understand that our shareholders and other stakeholders

that can generate large amounts of cash even in the face ofare deeply disappointed about the losses that we havedrastic changes in the external environment. In the revised

incurred for two consecutive fiscal years.

medium-term management plan, in light of the severe external

The reason we fell short of the plan was the Group’s

environment, we have pushed back our goals by one year

inability to respond to changes in the external environment.

from fiscal 2025 to fiscal 2026, and revised our initial sales

Not only was our response to changes in consumer needs ingoal downward to ¥203.0 billion. On the other hand, we planterms of products and sales delayed, but our profit and loss

to improve capital efficiency by strengthening our ability toplanning was overly optimistic, resulting in delays in measures

respond to changes in customers and profitability bysuch as cost reductions. In addition, inventory controls failed

reforming our business model and implementing our growth

to function effectively in response to sudden sales fluctuations

strategy, aiming for ROE of 7%.

and production delays in recent years, causing the Group’s

Quantitative Targets for Wacoal in the Revised Medium-Term Management Plan
Initial goal
FY2025

Revised target+1 year

FY2026

No change
FY2031(VISION 2030)

Sales revenue¥220 billion¥203 billion¥270 billion

Business profit¥16.5 billion¥13 billion¥27 billion

Business profit margin

7.5%

6.4%

More than 10%

ROE

6%

7%

More than 10%

ROIC

—

6 to 7%More than 10%

EPS¥200 or higher¥200 or higher

—

+1 %

INTEGRATED REPORT 2023

■ 46

Major Items of the Revised Medium-Term Management Plan (Financial Strategy) ■A Message from the Director in Charge of Finance

Restoring Basic Earnings Power through Business Model Reform
To restore Wacoal’s profitability—a top priority for the

including 22 directly managed stores and 10 stores inGroup—we intend to proceed with both cost structure

department stores, for the fiscal year under review, and wereforms and supply chain management reforms.

are currently negotiating terms for the remaining 150 or soWith regard to cost structure reforms, we have been

stores. The total cost reduction effect of these measures is

working to control various costs, including workforce plan

estimated to be approximately ¥7 billion by fiscal 2026, andmanagement. As a result of carefully reassessing the outlook

we plan to improve the profit margin by 3 to 4 points andfor future sales revenues in light of the current severe business

SG&A expenses by 4 to 5 points compared to fiscal 2023.

situation, however, we have determined that further reform of

In addition, we will consider plans to deal withthe cost structure is necessary in order to transition to a

unprofitable businesses and unprofitable subsidiaries. We

structure that can secure a certain level of profitability.

have already decided to exit the LIVELY business of IntimatesSpecifically, as part of “brand selection and concentration,”

Online, Inc. in the U.S. and liquidate the company. For other

we expect to reduce production lines by 40% and the number

businesses, we will examine the future approach withoutof products by 10% by fiscal 2025, resulting in costcreating sanctuaries, and decide on an action plan for

reductions of ¥1.9 billion. In addition, we believe that “lower

business continuity, sale, and withdrawal. During the period of

manufacturing costs,” “lower production and material costs,”

the revised medium-term management plan, we will steadilyand “improved store profit/loss” will occur as a result of theimplement these cost structure reforms and transition to areview of the supply chain, and we expect a total effect ofstronger earnings structure that will enable us to continue toapproximately ¥2 billion. In particular, with regard to “improved

invest in growth toward the realization of our VISION 2030.

store profit/loss,” we plan to withdraw a total of 32 stores,

Introduced ROIC Management to Strengthen Our Business Management Foundation
The fact that we receive many comments from investors andoperating company and each division that is more conscious

other external stakeholders shows that they want us toof profitability and capital efficiency than ever before, we

correct our losing habits, correctly evaluate the value of ourintend to generate cash by promoting disciplined businessbrands, and boldly take on the challenge of growth. In fact,

operations and continuously allocate these funds to human

our business performance has been downtrodden for a long

resources and growth investments to achieve sustainable

time, and we have been unable to achieve not only the goals

enhancement of corporate. In preparation for the start ofset out in the medium-term management plan but also the

ROIC management in April 2024, we will hold briefings on theinitial plan for each fiscal year. Capital efficiency has also

introduction of ROIC for the presidents and corporate officer

remained low. This was due to inadequacies in managementof operating companies in Japan and overseas during fiscal

and supervisory functions.

2024, and then proceed with the establishment of an ROICIn the revised medium-term management plan, we deeply

tree for Wacoal Corp. In addition to using ROIC as anreflected on this point and decided to introduce ROIC

indicator for managing financial targets, we also plan to use it

management to improve capital efficiency. In addition toas a means of accurately measuring results, and in the future,transitioning to management at the Wacoal Holdings, each

we plan to link it to executive compensation.

47 ■ WACOAL HOLDINGSPromoting Asset Reduction to Increase Capital Efficiency
We regard the return of profits to stakeholders as one

Medium-Term Management Plan, to restore our coremanagement’s tasks, and place emphasis on ROE.

profitability and strengthen our financial position.

Currently, we recognize that our cost of equity is in the 6%

In order to improve asset and capital efficiency, we haverange, and the ROE level of 7% set in the revised

adopted a basic policy of selling assets that do not contributemedium-term management plan is a figure that we should

to the enhancement of corporate value. At the time of sale,achieve at a minimum. Therefore, during the period of thewe will search for investment opportunities that will contributerevised medium-term management plan, we intend toto business growth and make investment decisions from theimprove profitability through growth strategies and cost

perspective of ROIC. First, with regard to the reduction of

structure reforms, as well as promote asset reduction suchcross-shareholdings, we plan to sell approximately ¥30 billion

as lowering inventories, reducing cross-shareholdings, andworth of the agreed upon shareholdings, and reduce them torestructuring real estate holdings. We will achieve ROE ofless than 10% of net assets by fiscal 2026. In addition, we will

10% in VISION 2030 by improving the elements of net

also verify our real estate holdings in accordance with our

income margin, total asset turnover, and financial leverage,

basic policy and respond accordingly.

which represent ROE, even during the period of the next
Implemented items

Reducing
inventories
Reducing crossshareholdings
Streamlining realestate holdings

Specific activities

Goals

●

Reducing inventories through business model reforms (supply chain
management reform and cost structure reform)● Appropriate disposal of inventory resulting from the withdrawal andconsolidation of unprofitable brands

Wacoal:Inventory turnover ratio in FY2026: 2.5 turns●

Gradually selling the shareholdings that we have agreed to sell

During FY2024 to FY2026 we will sell approx.
¥30 billion of cross-shareholdings (Reducing
less than 10% of net assets by FY2026)●

As for real estate that does not contribute to enhancing corporate
value, we will proceed with consideration based on the basic policyof selling

While carefully examining the feasibility andvalidity, we will gradually respond (starting thephase from FY2024)

Growth Investments Focused on Capital Efficiency
The cash allocation plan for the period of the revised

which necessitates the determination of the technologies andmedium-term management plan can be found on page 26.

systems that will contribute to the transformation of ourOf the cash generated, net income is expected to bebusiness model. As for investments in existing businesses, weapproximately ¥10 billion due to the impact of one-off

expect to invest in strengthening our own e-commerce, but

expenses associated with structural reforms. As mentioned

we believe that it is necessary to conduct detailed verification

earlier, as a result of our efforts to reduce assets and useof individual investments, run the PDCA cycle at high speed,

debt, we expect the total amount of cash generated over theand make appropriate corrections based on what we havethree-year period to be around ¥110 billion.

learned. In terms of new investments, we will seek to expand

On the other hand, in terms of cash used, we will

our business footprint in Europe and invest in growth in thecontinue to flexibly repurchase shares to improve capitalfields of beauty and health, as well as sports. We aim to

efficiency, and we plan to pay dividends of approximately

improve the asset efficiency of the entire Group by searching¥15 billion to shareholders. With regard to growth investments

for investment opportunities that contribute to growth andin existing and new businesses, in addition to the drastic

making investment decisions from the perspective of capitalchanges in customer needs and the purchasing environment,

efficiency, and striving to maximize the effects.

information and communication technology is rapidly evolving,

INTEGRATED REPORT 2023

■ 48

Major Items of the Revised Medium-Term Management Plan (Financial Strategy) ■A Message from the Director in Charge of Finance

Responsibilities as CFO
Based on the philosophy of “empowering people with the

In the process of formulating the revised medium-term

confidence that comes from looking and feeling their best” ofmanagement plan, we held a number of discussions with an

our customers, we have aimed to make the lives of all people

unwavering determination to never undertake painful reforms

around the world better through the development andagain. In order to restore solid profit growth, going forward,

provision of innerwear that satisfies both the body and thewe will check the effectiveness of our strategies at the Board

mind. However, we were unable to abandon theof Directors and the Group Strategy Committee while

manufacturer’s belief that “Wacoal’s products are good

cooperating with external directors to regularly monitor

products, so if we make them, they should sell,” and we

profitability, and make prompt management decisions

continued to make overly optimistic predictions that once theaccording to business conditions. In addition, we will revitalize

pandemic is under control, our business performance will gointernal communication and encourage the creation of new

back to normal, which has created the current difficult

corporate value through collaboration between departments.

situation. I myself solemnly accept that we will not be able to

The situation surrounding the Group is becoming increasingly

overcome this situation and will record losses for the second

severe. In order to steadily put the Group back on a path ofconsecutive fiscal year. I believe that the key to growing again

growth, we will return to the customer's perspective andis for all employees to recognize the fact that they are in theundertake business revitalization with a fresh mindset.

current earnings situation as a result of this disconnect from
customers and the market.

49 ■ WACOAL HOLDINGS

Introducing ROIC management
It has been decided to introduce ROIC management at the Group to improve capital efficiency and achieve a muscular corporate
structure. ROIC will not only be used to manage company-wide financial targets, but also as a performance management tool toaccurately measure results, quantitatively linking onsite improvement activities with the improvements in profitability and capitalefficiency expected by investors and other stakeholders.
In fiscal 2024, Wacoal Corp. launched a project to create an ROIC tree, and starting in fiscal 2025, the company will operate its
businesses using ROIC. Furthermore, the company plans to link this to the compensation of officers starting in fiscal 2026 in order
to increase the certainty of achieving targets and effectiveness of related strategies.

Purpose of Introducing ROIC Management
Strengthening business management functions

Use witha corporate
perspective

Financial assessment of target
achievement status▶ Managing financial targets across theCompany▶ Optimizing the business portfolio▶ Managing new investment profitability

Achievinga return
exceedingcapital costs

Ensuring strategy effectiveness

Use witha business
operation
perspective▶ Managing capital returns by theoperating company▶ Improving capital returns using the
ROIC tree▶ Linking with PDCA management andperformance evaluations

Cash the Groupgenerates (return)

Inventors/banks’
expected returnSource of growthProfit as percentage
of capital (ROIC)

Inventors/banks’ expected
yield (WACC)

Corporate value(ROIC spread)

Wacoal Group about 6%

Growth investments (reinvestments) and return to multi-stakeholders

Introducing the Process of ROIC Management to Business Departments
KPIs

Inculcation Process

Target Companies
FY2024FY2026

HD

Consider introducing ROIC
Conducting simulations tograsp ROIC values

Starting ROIC management

Linking to compensation

Wacoal (Japan)

Sharing ROIC management
introduction policy
ROIC study meetings
Incorporating into businessactivities (ROIC tree building)Starting ROIC management

Linking to compensationof officers
Linking to compensation

Domestic andoverseassubsidiaries

Sharing ROIC management
introduction policy

ROIC study meetings
Incorporating into businessactivities (ROIC tree building)Starting ROIC management
Linking to compensation

FY2026ROIC
6 to 7%

FY2025INTEGRATED REPORT 2023

■ 50

Initiatives to Reinforce Human Capital
Consistent with its founding principle of mutual trust, the Wacoal Group manages employees’ health and safety, trains
personnel, and is receptive to diversity in human resources and values in each workplace, thereby deepening mutual trustwith employees and developing workplace systems conducive to the creation of environments where the talents ofindividual employees can be fully realized.
We have built value chains that comprise proprietary networks, which span all stages from fundamental research,
product planning, and development through to materials procurement, production, and sales. In these value chains, humanresources are the Group’s most important management resource. For this reason, we believe that creating an appealing
corporate culture that is employee friendly and offers job satisfaction will lead to sustained growth.

Wacoal Corp.’s Human Capital Strategy(Basic policy)

Further promote career autonomy and foster a corporate culture that allows employees to feel fulﬁllment in their work, and aim to become “a company thatshares its success with all employees” by bringing out the individuality and strengths of each employee

VISION 2030

Revised Medium-Term Management Plan

Targets of the revised medium-term management plan
Running the organization by a select few =Individual growth xStrengthening organizational capabilities x
Fostering an appealing culture
To improve proﬁtability as soon as
possible, we will implement humanresource development, organizational
development, and corporate culture reform
for medium-to long-term growth along withmanaging personnel planning.

1
Acquisitionof talent2
SupportgrowthRevised medium-term
management plan

Initiatives
to maximize
human capital

VISION 2030
3
Strengthen
management
capabilities

What we look for in our employees:“Autonomous and innovative
employees”● Employees who respect and can embody

4
Promotionof DE&I

5
Achievementof well-being

our management philosophy.
● Employees who can rethink existing

concepts and current frameworks andinnovate with enthusiasm.
● Employees who can proactively enhancetheir own abilities and take on thechallenges of new possibilities.
● Employees who can build good teamwork
and contribute to organizational goals.
● Employees who can practice healthy andsound lifestyles.

• Improvement in compensation that reflects work value and results• Investment in increasing the value of human resources

Priority issues

1

Recruit, train and promote employees whowill be responsible for the company’s growth.

● The company will recruit and develop a personnel portfolio based on

the changes in the business portfolio and business model.
● Expand opportunities and time for autonomous career development

and support individual growth.

2

Improve management capabilities to linkindividuals’ strengths to organizational results.

3

Foster an organizational culture of highengagement and psychological safety.

● Strengthen appropriate appointment and placement based on the

succession plan.
● Improve management and organizational capabilities through fosteringa healthy feedback culture.
● Promote DE&I and foster a culture with a high level of psychological safety

51 ■ WACOAL HOLDINGS

in which diverse individuals can play an active role in a fair environment.
● Implement a personnel and remuneration system that is fair and in linewith the times, and clarify the criteria and processes for promotion andappointment.

ESG
Interview

Empowering individual employees and reforming culture to create a rewarding place in which
employees can use their individuality and strengths

Shinsuke Fukazawa
Corporate Ofﬁcer Head of
HR Dept. of Wacoal Corp.

In the revised medium-term management plan, we deﬁned the value the company provides as “empowering
customers’ ability to be themselves.” In order to support the “beauty, comfort, and health of each individual
customer” as needs grow more diverse, it is necessary to empower employees who possess diverse values andindividuality, draw out the capabilities of each employee as much as possible, and transform that into the powerof the organization. Therefore, we will build a system that generates growth through business model reform andgrowth strategy, and increase investments in human capital that is responsible for sustainable growth.
As for acquiring talent and developing human resources, we plan to not only reinforce measures so that
individual employees can acquire the skills they need to grow but also aggressively invest in acquiring talent.
To implement structural reform and growth strategy, it is necessary to make decisions that optimize the whole
company and change our perceptions so that each employee sees this as theirs and can act autonomously.
Therefore, we will not only expand the responsibility and authority of the heads of departments and section chiefs
and accelerate decision-making and actions by revising the organizational structure but also make changes sothat we can offer ﬂexible compensation that reﬂects work value and results. We will link these activities toimproved organizational results. Furthermore, we will foster an organizational culture that makes it possible foreach individual to use their strengths within an environment that offers high psychological safety, which includes
creating opportunities to learn about unconscious bias, in order to maximize the use of human resource diversity.

Initiatives to Maximize Human Capital
Hiring Status at Wacoal Corp. (career-track positions)

1 Acquisition of talent
The Group believes that valuing a culture of boldness and daring to take onchallenges, and diversity that creates new value by bringing in new ideas,
is the source of our competitiveness, and we are focusing on recruitmentof new graduates as well as lateral hires (including recent graduates andcareer recruits). At Wacoal Corp., we plan to continue to use lateral hires
for approximately 30% to 50% of the total number of career-track
positions, including management candidates, global, EC and DX
specialists and other personnel.

Fiscal Year Fiscal Year Fiscal Year Fiscal Year
ended
ended
ended
ended
March 2020 March 2021 March 2022 March 2023

Question
Male

2

4

1

Female

6

6

1

6

Total

8

10

2

10

Male

10

13

7

6

New graduates (people) Female

13

16

16

10

Lateral hires (people)

Total
Lateral hire ratio

4

23

29

23

16

26%

26%

8%

38%

2 Support growth (human resource development, reskilling, career development)
Aiming to transform into a company where individuality and strengths of each employee are fully realized, the Group provides various training
programs to support the growth of each employee by providing learning opportunities and career advancement support.
■ Human Resources Development
At Wacoal Corp., we believe that our development as a company is dependent upon efforts to enhance the qualiﬁcations of each employee and his/her
support. Based on this belief and with the aim of fostering personnel who can put our management philosophy into practice, we support career and personal
development by providing training programs that support the development of employees’ careers and professional skills, as well as self-development support
programs to promote employees’ self-study.
New Personnel Development System details
https://www.wacoalholdings.jp/en/sustainability/resource/development/■ Reskilling
At Wacoal Corp., we are working to develop human resources
through reskilling (relearning) to ensure that our employees havethe skills necessary for business growth and new business. During
the ﬁscal year ending March 31, 2024, we have launched theoperation of an online learning tool as a part of initiatives to raise
the level of IT literacy to improve labor productivity of ofﬁce work.
■ Career Development
At Wacoal Corp., we are working to develop human resources
capable of generating innovation by expanding the “Internal Job
Challenge” program, which allows employees to personally
request transfers, and “Outside Career Challenge” program, whichallows employees to gain experiences that are not available within
the company through secondment to companies andorganizations outside the Group, to increase opportunities for
employees to develop their careers on their own initiative.

TOPICS

Meet My Career Program

Wacoal Corp. has introduced the “Meet My Career Program,” which aims tohave employees develop their career independently and actively by
expanding the diverse systems and structures for career development and toenhance job satisfaction and revitalize organizations by promoting career
autonomy. Through this program, in addition to conventional
self-assessment, career interviews, training/self-development, and transfers,
we systematically provide opportunities for employees to proactively develop
possibilities and their careers, such as job challenges and internal
recruitment, outside career challenges, long-term leave, and side-work. With
this, we aim to accelerate therealization of diverse careerdevelopment for people byencouraging employees toactively implement a variety ofways to work, and at the sametime, by providing employees
Meet My First Career, a ﬁscal 2024 event for matchingwith opportunities to acquire
new career-track recruits and departments where theymight work
new skills, and reﬁne them.

INTEGRATED REPORT 2023

■ 52

3 Strengthen management capabilities
Profitability has been declining at Wacoal Corp., our core operating company, due to sluggish sales and a cost structure with a high fixed cost ratio.
We will implement the business strategies set forth in in our revised medium-term management plan to return to top line growth and improve
profitability. In order to enhance management effectiveness, it is an extremely important issue to strengthen management capabilities to makeaccurate and fast decision-makings and contribute to organizational achievements. We will, once again, work to cultivate, develop and appoint
management human resources based on the succession plan. We also recognize that it is essential to foster a healthy feedback culture from theperspective of strengthening organizational capabilities. We will promote efforts to secure and develop management human resources who canrealize our vision, implement our strategies, and motivate members to link individuals’ strengths to organizational results.

■ Development of Management Personnel
During the period of the revised medium-term management plan, we plan
to provide new trainings for the senior management as part of measures todisseminate the Group’s management philosophy, and for all management
positions, to promote diversity as a source of innovation and to acquirebasic knowledge of psychological safety, which is a foundation oforganizational development, and unconscious bias.

■ Review of Evaluation System
At Wacoal Corp., while increasing the diversity of human resources, we arebuilding a more productive organization with a small number of highly
skilled employees. In addition, we are reviewing, as needed, our systems
and operations for “fair evaluation and treatment” and “appointment ofleaders who can continue to enhance the attractiveness of anorganization” which form the basis for such efforts. By fostering a cultureof feedback and enhancing the level of acceptance of evaluation results,
we aim to strengthen our organizational capabilities.

4 Promotion of DE&I
The Group is building a sound corporate culture and a strong management structure by pursuing a system that enhances the job satisfaction of each
employee, while at the same time by ensuring the quantitative and qualitative appropriateness of human resources. Under the management
philosophy of “mutual trust,” we aim to create a work environment that is receptive to diverse human resources and values, deepens relationships of
mutual trust and that allows each employee to perform to the best of their ability. We will continue to expand the diverse career paths and work
options, and will implement initiatives related to human resources that will allow us to take advantage of the diversity of employees in organizational
decision-making for a rapidly changing market, such as by promoting an introduction of a new personnel evaluation system.

■ Empowerment of Women
As many of our employees at Wacoal Corp. and customers are female,Wacoal Corp. considers the empowerment of women’s involvement andactivities as an important management goal in order to reflect more diverse
viewpoints in its management decision-making. Therefore, Wacoal Corp.
has established a workplace environment that is appropriate and in linewith women’s unique life stages, promotes more flexible work styles, andhas instituted a system for promotion and advancement based on ability
and performance, regardless of gender or age. In February 2021, Wacoal
Corp. received the “Eruboshi Certification” from the Ministry of Health,Labour and Welfare of Japan, having been recognized as a company thathas made effective efforts to advance women’s participation.
■ Promotion of Women in Managerial Position
Wacoal Corp. has formulated a general employer action plan based on the
Act on the Promotion of Women’s Active Engagement in Professional Life,
under which we aim to increase the percentage of women in managerial
position (section manager and higher level) to 30% or higher by the end of
fiscal year ending March 31, 2025. The percentage of women in
managerial position (section manager and higher level) as of April 1, 2023
was 29%.
We will continue to identify human resources with a high aptitude forleadership from an early stage, regardless of gender, and further promote
the provision of training opportunities to candidates for managerial
positions. We will also develop talents capable of being in charge ofmanagerial and executive positions by supporting the autonomous growthof employees, encouraging them to gain experience in a variety ofbusinesses and positions, and continuously working to foster careerawareness.

■ Differences in Wages between Male and Female Employees
The differences in wages between male and female employees, one of theindicators for empowerment of women, at Wacoal Corp. is 52.9% (full-time
employees 53.9%, part-time and fixed-term employees 58.1%,
career-track positions 79.2% and management positions 91.2%). At
Wacoal Corp., there is no wage differential between male and female
employees in the same role. For this reason, the difference is due to (i) the
ratio of men in the managerial positions making up approximately 70% of
all managerial positions, (ii) the ratio of female employees in career-track
positions, especially in the hiring of new graduates, having been increasing
year by year, resulting in a high ratio of female employees among
employees who have been with the company for 10 years or less (10 years
or less since joining the company: 110 employees, 51.9%; over 10 years
since joining the company: 71 employees, 15.9%), and (iii) the fact that ahigher proportion of employees in sales related job groups compared tocareer-track positions.
We will increase the ratio of women in new graduates and lateral hires
in career-track positions, promote women based on their abilities
regardless of age and gender, and also increase the ratio of women in the
managerial positions and executive positions in order to close thedifferences in wages between male and female employees.

Differences in wages between male and female employees incurrent fiscal year (%)*
Name ofCompany

Wacoal Corp.

Of which,
Of which, are full-time employee status by position
are part-time/All
fixed-term
Employees All Full-time
contract
Management Career-track
Sales
Employees
employees
52.9

53.9

91.2

79.2

*

58.1

* • The figures shown have been calculated pursuant to the provisions of the Act on
the Promotion of Women’s Active Engagement in Professional Life(Act No. 64 of 2015)• Part-time/fixed-term contract employees include contract employees and postretirement rehires.
• An asterisk “*” indicates that comparison cannot be made due to the absence of
applicable male employees.

53 ■ WACOAL HOLDINGSESG■ Promotion of Foreign Nationals to Managerial Positions
The Group, as a corporate group operating in countries and regions
around the world, appoints local personnel to the positions ofrepresentative (president) and key managerial positions in each of ouroverseas entities, including the U.S., Europe and China. We will continue
to hire diverse local human resources regardless of nationality and promote
them to key managerial positions in order to expand our business from thecustomer’s point of view and strengthen our competitive advantage in theoverseas markets.
■ Employment of People with Disabilities
The Group is improving the working environment and providing work
support by conducting training so that everyone is able to work
proactively, and we also conduct individual interviews to listen to worker
opinions. In February 2018, Wacoal I Next Corp. was founded to promote
the employment of people with disabilities and to create opportunities fortheir active participation. In December 2018, the company was certified asa special subsidiary under the Employment Promotion Act for Persons
with Disabilities.

■ Work-Life Balance
Wacoal Corp. is developing workplace environments that enable
employees to lead fulfilling lives and to make the best use of their skills. For
example, as part of our initiatives to help employees meet work andchild-rearing commitments, we are establishing programs and norms witha view to creating environments that are convenient and fulfilling to work in
not only for employees with child-rearing commitments but also forcoworkers who support them. Further, as a result of preparing an action
plan based on Japan’s Act on Advancement of Measures to Support
Raising Next-Generation Children and taking measures to implement theplan, in 2018 we received “Kurumin” certification for the third time and“Platinum Kurumin” certification. We plan to create a system that allows
employees to be flexible in the way they use their time so that they canincrease the diversity of their individual experiences and skills and create
innovation at work, by actively having connection not only with work andfamily, but also with society.

5 Achievement of well-being
In order to achieve “to evolve and grow as ‘Wacoal Group of the World’ by providing both physical and emotional beauty and richness to individuals
through high sensitivity and premium quality” as addressed under our medium to long-term strategy framework “VISION 2030”, it is essential toincrease the satisfaction of our employees, who are key stakeholders, and to improve the productivity of the organization as a whole.
At Wacoal Corp., we believe that improving the job satisfaction and happiness of each employee is the driving force to achieve high productivity,
and we will implement initiatives to achieve well-being to improve employee engagement.

■ Promotion of Diverse Working Styles
We are promoting initiatives at Wacoal Corp. that seek to raise awarenessand change behavior on how to increase working productivity through a
combination of proactive use of remote work tailored to each department,
promotion of flexible hours, and operation of a limited work location
system. While promoting organizational reforms which emphasize on
performance and achievements, we are focusing on creating a corporate
culture that respects each individual as a business partner by recognizing
diverse opinions and values. While remote work has been adopted rapidly
as a measure to prevent the spread of COVID-19, we will continue toutilize remote work tailored to the characteristics of each department as “awork style to maximize the achievements and performance” even after thedowngrade of COVID-19 to a Class 5 disease (common infectious
disease). In addition, we continue to promote reforms in the way we work,
such as starting a “super flexible time” system from April 2023.

■ Health Management
Viewing the health of employees as an important asset for sustained
growth, Wacoal Corp strategically promotes the health management byworking together with the health insurance society and labor union as atrinity. Our goal under the newly formulated Wacoal GENKI Project 2025
for promoting health management is to improve the physical and mental
well-being of employees, leading to increased productivity and improved
employee engagement. We will continue to promote health maintenancethrough the ongoing implementation of various countermeasures toaddress lifestyle diseases, cancer, and mental health while further
developing a working environment that enables employees to makeself-initiated efforts to improve their health, thereby encouraging changes
in behavior and attitudes toward the subject of health improvement itself.
We are also stepping up our efforts to address health issues that are
specific to women. Furthermore, Wacoal Holdings Corp. has been
selected as an Excellent Enterprise of Health & Productivity Management(White 500) for seven years in a row since 2017.

Targets and Goals
Human Capital Issues basedon Management Strategies

Targets and Goals (KPI)

Initiatives to Maximize
Human Capital

Targets
Status of lateral hires (career-track positions)

Recruit, train and promote employees
who will be responsible for thecompany’s growth

Improving management capabilities
to connect individuals’ strengths toorganizational results

Foster an organizational culture ofhigh engagement and psychologicalsafety1

Acquisition of talent2Support growth(3

human resource
development, reskilling,career development

Goals
Achieve lateral hires of 30% - 50% in total
hires of career-track positions

Investment costs in development and training human resources
To formulate during fiscal year ending
Number of participants in programs and hours
March 31, 2024
invested in learning (as to working hours))

Number and percentage of employees reassignment
through internal recruitment and Job Challenge

To formulate during fiscal year ending
March 31, 2024

Degree of achievement of proactive career development

To obtain 60% or higher positive responses forquestions related to career achievement inengagement survey

Contribution of management that leads to sustainable growth

To obtain 60% or higher positive responses forquestions related to potentials and future
prospects in engagement survey

Foster a feedback culture

To obtain 60% or higher positive responses forquestions related to approval and praise,fair evaluation in engagement survey

Strengthen management
capabilities

KPI achievements under Wacoal GENKI project 2025

4

Promotion of DE&I

5

Achievement of wellbeing Employment of people with disabilities

https://www.wacoalholdings.jp/en/
sustainability/resource/wellbeing/
Statutory employment rate of 2.5% for fiscal 2025

INTEGRATED REPORT 2023

■ 54

Actions for the Environment
The Group believes that it bears a responsibility as a company to protect the global environment during the course of its
global business activities. We are expanding our disclosure of environmental information while promoting initiatives toaddress climate change and realize a sound material-cycle society.

Response to Climate Change
In order to move forward with measures to realize a carbon-free society and firmly ensure the reduction of greenhouse gas (GHG) emissions along the supply
chain, we began calculating GHG emissions for the entire supply chain (Scope 3) of the Wacoal Business (Domestic) in 2021. Moreover, in addition todisclosing reduction targets for Scope 1 and Scope 2 GHG emissions from our operating bases in Japan in pursuit of our 2030 nonfinancial goals, in June
2022 the Company disclosed reduction targets for the aforementioned Scope 3 GHG emissions of the Wacoal Business (Domestic).

Governance

The Group established the Sustainability Committee in April 2022 to promote sustainability management and achieve both solvingsocial issues and sustainable growth through our business activities. We have also established four subcommittees under the
Sustainability Committee in order to strengthen our response to important sustainability issues.
In order to reduce the environmental impact and environmental risk of Wacoal Group’s business activities and to promote
voluntary and active environmental preservation activities, the Subcommittee for Carbon-Neutral will deliberate on activity policies
and initiatives related to environmental issues, such as climate change measures and reducing the environmental load of backoffices, and strategic investment projects related to environmental preservation, and monitor progress.

Strategy

The Group conducted a scenario analysis on climate change during the fiscal year ended March 31, 2023. In the scenario
analysis, we examined countermeasures and identification of risks and opportunities for Wacoal Corp., which has the highest
percentage of overall sales in the Group, in two hypothetical scenarios in which the global temperature increased by 2°C and 4°C.
The scenario analysis showed that while a rise of 2°C had some positive impacts, such as gaining support from environmentallyconscious consumers, transition risks, such as the introduction of carbon taxes, could have a negative impact on business. In
addition, it was found that a rise of 4°C may lead to physical risks, such as storms, floods, and other extreme weather, that could
have a negative impact on business.

Risks:We believe that the major risks affecting the Group’s business, strategy, financial plans, etc. include, among 25 others, the intensification of extreme
weather, such as storms and floods, and increases in carbon pricing.
Opportunities: The Group is promoting environmentally friendly activities, such as building a manufacturing and sales system in which few products are discarded. In
the future, we will continue to promote business activities with a low environmental impact, aiming to achieve the “Environmental Goals for 2030”. As
environmental awareness is growing among consumers and society, we believe that business activities like these will be an opportunity to boost sales
for the Group.

Risk
management

With respect to risks related to sustainability issues of the Group, the Sustainability Committee and its subcommittees examine
the impact on the entire supply chain, including direct operations and certain upstream and downstream operations, from ashort-, medium-, and long-term perspective. The results are reported to the Board of Directors, the upper decision-making
body, which ultimately identifies and evaluates risks. Risks are also managed through monitoring and evaluation of achievementby the Sustainability Committee and each subcommittee.

Indicatorsand goals

The Group has set its own environmental goals for 2030 to promote efforts to solve increasingly serious climate change issues
and realize a carbon-free society.
Note: For overseas business operations, we will start by calculating our own emissions (Scope 1 and 2) and plan to disclose the targets by the end of
March 2025.

Environmental data

Results in the Fiscal 2022

https://www.wacoalholdings.jp/sustainability/environment/activities/#data

In fiscal 2022, greenhouse gas emissions in the supply chain of Wacoal Business (Domestic) decreased by approximately 12% compared to fiscal 2020 amid
cutbacks in the use of raw materials due to sluggish sales.
FY2022 Results
In-house emissions (Scope 1 and 2*)

Target: Domestic offices

Supply chain emissions (Scope 3)

Target: Wacoal Business (domestic)

Product disposal rate

Target: Wacoal Corp.

Rate of environment-friendly materials used

Target: Wacoal Corp.

55 ■ WACOAL HOLDINGS

Compared to FY2020(base year)

Target for 2030

6,105 t-3%

Neutral294,512 t-12％20% reduction

1.6%

―

0%

12%

―

50%

ESG

Recognition as a CDP 2022 Supplier Engagement Leader
CDP is an international nonprofit organization that conducts research and analyses on the initiatives of companies andorganizations around the world to address climate change and other environmental issues and discloses the results of theseassessments. The CDP’s Supplier Engagement Rating assesses how companies work effectively with suppliers to resolve theissue of climate change. The Group engaged in CDP’s climate change questionnaire and was selected as a “B list” company.

Initiatives in Fiscal 2024 andPlan for Fiscal 2025
Initiatives for Reducing Our own Greenhouse Gas Emissions
In order to reduce greenhouse gas emissions at our domestic business sites, in fiscal
2024, we investigated the CO₂ emission reduction potential of our headquarters anddistribution centers, and established detailed reduction programs. From fiscal 2025
onward, we plan to implement specific measures in line with our reduction roadmap.
In addition to Wacoal Distribution Corp. (Moriyama City, Shiga Prefecture) and theShin-Kyoto Building, Wacoal Manufacturing Japan Corp. has decided to introduce a
new solar power generation system at its Nagasaki Plant.
Wacoal Distribution Corp.

Initiatives for Reducing Greenhouse Gas Emissions in Our Supply Chain in Japan
Collaboration with suppliers is vital to reducing emissions in our supply chain. In fiscal 2024, we explained the Group’s environmental policy to suppliers andshared plans for our future initiatives, and conducted research activities to formulate reduction scenarios in collaboration with a third-party organization. Fromfiscal 2025 onwards, we plan to continue conducting research activities and refining our calculation methods.

Initiatives for Reducing Greenhouse Gas Emissions in Our Overseas Operations
In order to reduce greenhouse gas emissions in our overseas operations, we have determined that our own garment factories, which account for more than
80% of the total electricity consumption, are subject to boundaries and have calculated their greenhouse gas emissions. In fiscal 2025, we plan to formulate areduction program and consider medium- to long-term reduction targets.

Achieving a Resource-Circulating Society
At Wacoal, we are constantly developing and expanding our line of environment-friendly products and materials in order to address the needs of consumers
for more products that respect the environment and to contribute to the realization of a sustainable global environment. The Subcommittee for Resource
Circulation, which falls under the Sustainability Committee, deliberates on standards for environmentally friendly materials and monitors the progress of waste
reduction in production and procurement activities in order to promote the sustainable use of resources and materials in the supply chain and the reduction
and recycling of waste toward the realization of a resource-circulating society.

TOPICS

Development and introduction of recycled hangers reduces the use of virgin plastics by half

Wacoal Corp. jointly developed a circular recycled hanger made fromrecovered plastic hangers with Nippon Copack Inc., and has been using themsteadily for products sold mainly at chain stores since July 2023. We expect touse 13 million recycled hangers annually in the future.
In the past, after use as a display hanger at chain stores, we collected
hangers at the store’s point of sale (POS), and recycled them into solid fueland plastic products for apparel after collection. This newly developed
circular recycled hanger is made by combining recycled materials aftercollection and virgin plastic raw materials into a new hanger that is usedagain for product displays.
By using 50% recycled materials, this circular recycled hanger can reduce
the amount of virgin plastic raw materials used by around 75 tons per year.

Hanger manufacturing plant

Salesfloor (Wacoal)(Nippon Copack Inc.)

Collected at the
POS after use indisplays on thesalesfloor

Recycleshangers anddelivers themto Wacoal

Circular
Recycling
Remanufacturing plant(Nippon Copack Inc.)

Collected at the POS after
use in displays on thesalesfloor

INTEGRATED REPORT 2023

■ 56

Human Rights Initiatives
Ever since its inception as a corporate entity, the Wacoal Group has never rested in its mission to further business
management rooted in mutual trust and respect for humanity. Wacoal’s purpose is to contribute to the everyday health andaffluence of each and every one of our customers through the products and services that we supply, effectively setting oursights on the realization of a sustainable society. We recognize that all of our business activities must be grounded in thepremise of unrelenting respect for human rights. True to this stance, we pledge to fully grasp and support international
principles and standards, such as the United Nations “Guiding Principles on Business and Human Rights,” as the minimum
tenets and benchmarks to be maintained with regard to human rights.

Human Rights Policy

The Wacoal Group Human Rights Policy
https://www.wacoalholdings.jp/en/sustainability/rights/

We have established the Wacoal Group Human Rights Policy as a guideline for promoting group-wide efforts to respect human rights and fulfill corresponding
responsibilities. This Policy conforms to the United Nations “Guiding Principles on Business and Human Rights.”

Human Rights Structure
The Human Rights and Diversity & Inclusion Subcommittee, which was established under the Sustainability Committee responsible for planning ofsustainability activities and monitoring of progress, conducts education and awareness activities related to the protection of human rights and provides advice
and recommendations for the implementation of human rights due diligence to ensure the Group fulfills its responsibilities to respect human rights according to
its Human Rights Policy and that its operations are executed appropriately.

Action Policy
for the revised medium-term
management plan

• Identify human rights risks and formulate a system for conducting human rights due diligence• Formulate and implement policies to deal with the amended Act for Eliminating Discrimination against Persons with Disabilities
and LGBTQ+ customers• Formulate and disclose a roadmap for D&I promotion

Details of initiatives
during the fiscal year ended
March 31, 2023

• Conducted a simplified assessment of human rights issues in the supply chain• Conducted hearings with experts on the implementation of human rights due diligence, and considered and decided on specificactivities for fiscal 2024 and beyond• Conducted hearings with experts on the promotion of D&I

Activity plan for
the fiscal year ended
March 31, 2024

• Implement human rights risk assessments in collaboration with experts (identify human rights risks and select important themes)• Respond to reasonable accommodations required by the amended Act on the Elimination of Discrimination against Persons with
Disabilities and review policies for working with LGBTQ+ customers• Sort D&I issues at Wacoal Corp., visualize gaps, and determine priorities for initiatives

Identifying Human Rights Risks for Commencing Human Rights Due Diligence
In accordance with the CSR Procurement Guidelines, the Group has a process in place to identify negative impacts and risks to human rights in productprocurement and to formulate and implement appropriate countermeasures. However, we have not been able to identify human rights issues in the supply
chain other than the procurement process.
Therefore, in October 2023, we conducted a human rights risk assessment to identify potential
human rights risks in the Wacoal Group’s supply chain. As part of the assessment process, in addition
to desktop surveys, we hold cross-functional workshops with the participation of directors, corporate
officers, and management to discuss human rights risks in the process from procurement to sales
and consumption.
Looking ahead, we plan to start human rights due diligence after identifying human rights themesthat the Group should prioritize through consultation with a third-party organization.
Human Rights Due Diligence
Identify and assess negative
impacts on human rights
Commitment
based onhuman rights
policyHuman rights risk assessment
Human rights impact assessment

Provide information
to external parties

Prevent and mitigate
negative impacts
on human rights

Traced andevaluated effectivenessof response

Stakeholder engagement
Dispute resolution process

57 ■ WACOAL HOLDINGS

Improvements
and Relief

ESG

Fulfilling Social Responsibilities along Our Supply Chain
The Wacoal Group engages in responsible procurement with its business partners around the world with the aim of fulfilling
its social responsibilities throughout the entire supply chain. Realizing the importance of meeting the expectations ofsociety, establishing mutual trust, and working in unison, we believe that promoting CSR procurement together with ourcontract manufacturers will maximize the interests of all of our partners along the supply chain and contribute to thesustainable growth of all parties. As such, we will continue to engage proactively in this area going forward.

CSR Procurement Based on Mutual Trustand Cooperation

Basic Information Disclosed on Contract Manufacturers(as of June 2023)
Country/region

Supply chains for textiles and apparel begin with product planning and design in the countries andregions where the products will be sold. Almost all of our products are shipped to their respective
markets after processing through international networks in which the production or procurement of
raw materials and the sewing and manufacturing of finished products are carried out in China or
emerging countries in the ASEAN region. Established in October 2017, the “Wacoal Group CSR
Procurement Guidelines” declare that “in order to fulfill our social responsibilities, we must build close
partnerships with all suppliers involved in our product manufacturing activities, and together withthem we must comply with and respect society’s requirements with regard to not only quality, pricing,and delivery but also human rights, labor practices, the environment, and ethics.” Since February
2018, we have been conducting a management cycle that continuously amends and improves theguidelines in light of careful monitoring of compliance with the guidelines. Further, Wacoal has been
disclosing the basic information of contract manufacturers that endorse disclosure since May 2018.
List of factories entrusted with the manufacturing of products
https://www.wacoalholdings.jp/en/sustainability/csr/list/

No. of factories
Percentage of
operated by Wacoal or total factories
contract manufacturers
worldwide

Total

273

100.0%

China

129

47.2%

Japan

102

37.4%

Vietnam13

4.8%

Thailand7

2.6%

Cambodia4

1.5%

Indonesia

4

1.5%

The Philippines

3

1.1%

Taiwan

2

0.7%

India

2

0.7%

Tunisia

2

0.7%

Other

5

1.8%

Fiscal 2023 Initiatives and Fiscal 2024 Plan
Fiscal 2023 Initiatives• Verified the status of compliance with matters specified in the “Wacoal Group CSR Procurement Guidelines” via self-assessments
Conducted self-evaluation for contract manufacturers that started CSR procurement activities in the fiscal years ended March 2019, March 2021,
and March 2023
• Made preparations for expanding the scope of CSR procurement activities for raw material suppliers and dyeing factories
Conducted pilot on-site audits of raw material production plant subsidiaries and dyeing factories of the Group’s overseas subsidiaries in order toexpand the scope of coverage to raw material suppliers and dyeing factories in fiscal 2024
• Expanded the scope audits of contract manufacturers based on the certification results of external auditing institutions
Evaluated that audit content required by the Company can be ensured even at domestic sewing factories in order to expand the scope of CSR
procurement activities in light of the rationality and efficiency of audits

Fiscal 2024 Plans• Accurately monitor the status of compliance with matters specified in the “Wacoal Group CSR Procurement Guidelines” throughself-assessments and provide feedback on analyses and assessments• Strengthen monitoring of sewing factories that accept foreign technical intern trainees
Conduct questionnaires and on-site audits exclusively for foreign technical intern trainees• Expand the scope of CSR procurement activities for raw material suppliers and dyeing factories
Conduct self-assessments of major raw material production plants and dyeing factories under the Wacoal and Wing brands• Conduct on-site audits and implement audits
Resume on-site audits in Japan, partially resume on-site audits overseas, and promote implementation of audits

TOPICS

Relief and Support for Foreign Technical Intern Trainees

In November 2022, it was revealed that a supplier of sewing services to Wacoal Corp. was planning to file for bankruptcy due to a non-payment ofwages at a sewing factory from which Wacoal Corp. ordered the production of pajamas for mail-order catalogs through a primary contractor. As oneof the company’s buyers, Wacoal took the issue of non-payment of wages very seriously, determining that the 11 technical intern trainees who were
working at the contractor needed immediate relief and examining the details of the support. Subsequently, in December, we donated ¥5 million to theJapan-Vietnam Tomoiki Support Association, which assists Vietnamese technical intern trainees and international students. The donation was used tosupport the lives of technical intern trainees who worked at the company through the support association.
Wacoal recognizes that there is room for improvement in its previous CSR procurement initiatives. We are implementing initiatives to improve
effectiveness, such as conducting surveys of factories that accept foreign technical interns and strengthening on-site audits.

INTEGRATED REPORT 2023

■ 58

Interview with an External Director

In order to achieve the “total optimization” requiredof the Wacoal Group, I will provide valuable feedback
from an external perspective in an effort to enhance
the Company’s corporate value.

Koji Nitto

External Director

Issues Faced by Wacoal Group and the Role of External Directors—You were appointed an external director in

I felt a keen sense that the company needed to change.

June 2023. What are your thoughts since taking up

I decided to take on the job because I thought that myyour position?

knowledge would be useful to the Wacoal Group. Above all,In April 2023, I was asked to become an external director

I wanted to help turn around the company because it isafter a request was made to increase the number of external

headquartered in Kyoto, similar to OMRON Corporation,

directors. Honestly, I was surprised by this development. Even

where I worked previously.

before I took office, I was aware that Wacoal was struggling in

After starting my role, as I began to understand theterms of performance. Yet, I didn’t expect the situation to beinternal situation and the expectations of external

this severe because Wacoal is one of Kyoto’s leading

stakeholders, the opinions and suggestions of investors wereblue-chip companies. While talking with the management,

quite natural based on my perspective of having held positions

59 ■ WACOAL HOLDINGS

Governancein finance and as CFO in my previous job. I knew deep downthat it was now or never for Wacoal to transform itself.

However, the role of monitoring and supervision as anexternal director is only one function behind the enhancementof corporate value. When I thought about the current situation—What issues does the Wacoal Group face?

at Wacoal, the significance of being invited to serve as an

Wacoal is a powerful brand that leads the innerwear market in

external director at this time, and the expectations of Wacoal,

Japan. There are many talented people at the company, who

I have made it a point to communicate closely with thework hard and make high-quality products with confidence inmanagement team and focus on everything I can do totheir manufacturing. Therefore, there is a strong tendency toenhance Wacoal’s corporate value and restore its

carry on with the status quo, almost to a fault. Although it

performance. This does not mean that I’m on the businesstried new things in the past, the company was unable toexecution side. As an external director, I hope to provide

transform its core parts. However, the needs of the world are

maximum support to the management team in formulatingchanging. We find ourselves in an era where certain

highly effective management strategies and implementing

companies are now competing against one another, eventhem with a sense of urgency.

though we thought this would never be the case. If the

Change requires ensuring that management philosophy

assumptions of the business environment have changed,

and goals are shared within the company, and that executives

Wacoal’s approach to doing business must also change.

and employees are on the same page as they work together

Wacoal has upheld the notion that its “manufacturing isto achieve them. Considering the current situation of theunique,” and the fact that it did not pursue reforms has led to

Wacoal Group, it was necessary to clarify the direction of thethe current difficulties in performance.

medium-term management plan and formulate a detailed

In 2022, the Wacoal Group systematically defined its

action plan with a high degree of effectiveness. In this regard,

management philosophy and formulated the medium- to

I provided quite strong input from an external perspective.

long-term management strategy framework called VISION

Other directors have endorsed my contributions. The revised

2030. This framework is put together very well. Yet, I feel thatmedium-term management plan was formulated by internal

what the company aims for in 2030 and what it will do to

directors and corporate officer with the support of an external

achieve it is not shared internally, leading to a disconnect with

consultant. External directors were also deeply involved in theindividual work. Given the severity of the external environment,

process of formulating important agenda items.

the company has not been able to produce results, so it
appears as if the company is actually only working on cost
cutting from a short-term perspective. Without a strategy that
motivates employees to work hard and is supported byshareholders, it is impossible to aim for medium- to long-term
growth and sustainable corporate management. In that sense,
I thought the plan lacked connection.

—With this current situation in mind, how were you
and other external officers involved in the process forformulating the revised medium-term management plan?
At my previous job, the basic stance of governance was that
directors were responsible for monitoring and supervision,and that business execution was entrusted to internal
directors who also served as executives. For example, when
formulating strategies and measures, external directors
naturally gave their opinions, but they were not involved in
actual business execution. From the executive’s point of view,
the Board of Directors existed to rubber stamp their projects.
An ideal style of governance is one where such oversight,
supervision, and execution are separated and supported by arelationship of trust.

INTEGRATED REPORT 2023

■ 60

Interview with an External Director

Strengthening Connections to Enhance Corporate Value—ROIC management, which was introduced as part ofcustomers in a timely manner. “Supply chain management

the company’s revised medium-term management planreform” is the first agenda item in the revised medium-termis one of your specializations. Were there any issues

management plan. This is proof that the executive teamassociated with its introduction at Wacoal Holdings Corp.?

understands the importance of cooperating and connecting

ROIC management balances “earnings power” and “thewith the perspective of total optimization. The other thing is topower to create value,” which helps strengthen each function

be aware of the sense of urgency and take action.

of the company. However, it is up to each and every employee
to make this possible. ROIC management cannot be achieved—In terms of total optimization, the company clarified

unless the corporate officer and related members look in theits plan for asset reduction.

same direction across departments and understand and

ROIC management is about how to efficiently manage theagree on what needs to be done. The most important thing tomoney you receive and achieve high yields. From thatbe competitive as an organization is to be aware ofperspective, if there are assets that do not contribute to the“connections.” When introducing ROIC, I insisted on this point

bottom line or corporate value, the company’s overallvery strongly. Things are inherently connected by a causal

performance will appear to decline, which should be avoided.

relationship. Internally, however, the reality is that there is a

Wacoal Holdings Corp. should continue to generate profits by

mixture of clear causal relationships and opaque relationships.

providing products and services in the innerwear market andFor example, if the company wants to reduce inventory while

the fashion industry. There is no need to have assets that dosecuring sales, the sales department can only accomplish so

not contribute to this core business.

much alone. In order to optimize the product mix in stores,

In order to revamp management, it is essential to clarify

improve the supply ratio, and build out a production system toand promote the basic policy of asset reduction and to utilize

prevent excess inventory, the production and planningthe funds obtained from this policy to invest in employees, as

departments must also discuss matters together. By being

they are responsible for the revised medium-term

thoroughly aware of how business and departments aremanagement plan. Or the funds should be returned toconnected, Wacoal Holdings Corp. can determine what isshareholders and invested in businesses.

needed and what is not necessary to achieve its goals.
I’ve said that Wacoal Holdings Corp. has a corporate—Wacoal Group is making progress with structural

culture in which each individual is serious and works hard. On

reforms. What changes are being made to the Board

the flip side, though, this also means that Wacoal is aof Directors?

company that has an extremely strong tendency to toward

President and CEO Yajima and Vice President Miyagi believe

departmental or partial optimization. What the Wacoal Group

that outside knowledge is extremely important for the Wacoal

needs now is the concept of total optimization. Departments

Group today. They want board members to be free to express

and individuals must work together as a team to fulfill their

their opinions. The two of them continue to hear tough talk,individual roles and move flexibly toward a shared goal.

with some painful points and unprecedented proposals. The

Fortunately, however, each of Wacoal’s divisions has a highBoard of Directors is serious about the situation and able tolevel of competence, so the company can maximize its

have a deep discussion on each agenda item. There is nopotential by reviewing and connecting existing ways ofsense of distance between internal and external directors.

thinking, methods, and priorities.
In the process of formulating the revised medium-term

This stance has had a positive impact on everyone on theexecutive side. Participants in board meetings take a positive

management plan, I repeatedly explained three things. First,

view of our opinions and proposals and work together tothe importance of understanding that supply chain

exchange opinions on reforms for the Wacoal Group.

management can be fatal if it fails in even one place. Second,

Discussions and information exchanges between external

in order to fully realize its potential, the supply chain must be

directors and executives actively take place away from board

connected end-to-end from procurement to customers.

meetings. In the future, I would like to further engage both toFinally, no matter how much new product development or

push back on execution, while monitoring and supervising,brand development the company may accomplish, it iswhich will help to speed up reforms.

meaningless unless the company can deliver products to

61 ■ WACOAL HOLDINGS

Governance—With the transformation of its corporate structure

I have told the executive management team that I want themunder a new management system, how do you view theto create opportunities to talk about difficulties, dreams andWacoal Group going forward?

hopes for the future. The long-term slump in businessIn reviewing the medium-term management plan, the Board of

performance may have opened up a gap between

Directors held considerable discussions on the basic

management and employees. Yet, communication to deepen

approach to formulating the plan. As a result, we came to themutual understanding is something that must be done even if

conclusion that the Wacoal Group would incorporate

it takes time and money.

everything that needed to be done without compromise. The

If it sees results in the future, the company will be able to

final product was the revised medium-term management plan.

have a sense of reality and expectations regarding theIn particular, the plan is backed by supply chain management

achievement of its goals and the goals set forth in the VISION

reform and brand strategy. I would like to speed up the2030. That is, the company should be highly motivated. In

process a little more. Although the external environment isthat sense, the revised medium-term management plan is analso uncertain, I would like to see the company exceed theespecially important period. In addition, ROIC management

figures set in the revised medium-term management plan atand improvement of capital efficiency are only a means to

the very least. Therein, the motivation of workers becomesenhance corporate value. Achieving an early recovery into aimportant. Employees need to move in the same direction

corporate entity capable of generating cash, appropriately

and move forward with a sense of unity as a company, but

returning the generated cash to stakeholders, and redirecting

this depends on whether all employees can incorporate thethis cash to growth investments for the next stage of growthrevised medium-term management plan revision into theirwill lead to the realization of the Wacoal Group’s corporate

own work and take action. However, just showing the target

philosophy. Utilizing my own knowledge, I will continue tonumber will only cause pressure. This will not motivate

provide strong input and supply a variety of supports that

employees. In order to make the power that comes fromcontribute to Wacoal’s growth and enhancement of

employees’ love for Wacoal into the strength of the company,

corporate value.

ProfileKoji Nitto
After graduating from the Department of Instrumentation Engineering, Faculty of
Science and Technology at Keio University in March 1983, Koji Nitto graduated from
Doshisha Business School in March 2006. Nitto joined Tateisi Electronics Co.
(currently, OMRON Corporation) in April 1983. He was appointed an executive officer
of OMRON Healthcare, Inc. in April 2008. He was appointed as Director, Senior
Managing Executive Officer, and Senior General Manager of the Global Strategy HQ,OMRON Corporation in June 2014. Nitto became Director, Senior Managing
Executive Officer, Chief Financial Officer (CFO), Global Strategy HQ, OMRONCorporation in April 2017 (stepping down in March 2023 and retiring in June 2023).
He was appointed as an external Director of Wacoal Holdings Corp. in June 2023. He
has also served as a Director of the Japan Association for Chief Financial Officers, andDirector of the Center for iPS Cell Research and Application, Kyoto University.

INTEGRATED REPORT 2023

■ 62

Management Team As of June 30, 2023
Directors
Representative Director, President and CEO (Group CEO)Akira Miyagi

Mar. 1984 Joined the Company
Jun. 2004 Director and President, Wacoal International Hong Kong Co., Ltd.
Apr. 2007 Leader of Sales Group, International Headquarters, Wacoal Corp.
Sep. 2008 Director and Deputy General Manager, Wacoal China Co., Ltd.
Apr. 2009 Director and General Manager, Wacoal China Co., Ltd
Apr. 2011 Corporate Officer, Wacoal Corp.
Apr. 2015 Corporate Officer and General manager of Technology &Production Division, Wacoal Corp.
Apr. 2016 Director, Corporate Officer and General Manager ofTechnology & Production Division, Wacoal Corp.
Apr. 2018 Director, Managing Corporate Officer and General Manager ofWholesale Division, Wacoal Corp.
Apr. 2021 Director, Managing Corporate Officer and General Manager of
Global Division, Wacoal Corp.
Apr. 2022 Director and Executive Corporate Officer, Wacoal Corp.
General manager of Global Division of the Company
Jun. 2022 Director, Executive Corporate Officer and Head of Global
Operations Div. of the Company
Apr. 2023 Director, Executive Corporate Officer in charge of Business of
the Company
May. 2023 Director, Executive Corporate Officer in charge of Business andHead of Global Operations Div. of the Company
Jun. 2023 Representative Director, President and CEO (Group CEO) and
General Manager, Global Headquarters of the Company(current position)

Mar. 1984 Joined the Company
Oct. 2007 Manager of Business Management and Administration of
Wacoal Brand Operation Division of Wacoal Corp.
Apr. 2011 Director and Deputy General Manager of Wacoal China Co., Ltd.
Apr. 2014 General Manager of Corporate Planning of the Company
Apr. 2017 Corporate Officer of Wacoal Corp.
Jun. 2018 Director and General Manager of Corporate Planning of theCompany
Jun. 2019 Managing Director and General Manager of Corporate
Planning of the Company
Apr. 2020 Director and Managing Corporate Officer in charge of Group
Finance of the Company
Jun. 2021 Director and Managing Corporate Officer in charge of Group
Business Management of the Company
Jun. 2022 Director, Vice President, Executive Officer and CFO in charge ofGroup Business Management of the Company
Dec. 2022 Representative Director, Vice President and Executive Officer
and CFO of the Company (current position)

External Director (Independent)

External Director (Independent)

Shigeru Saito

Tsunehiko Iwai

Nov. 1979 Joined TOSE CO., LTD.
General Manager of Development Department
Oct. 1985 Director of TOSE CO., LTD.
Feb. 1987 Representative Director and President of TOSE CO., LTD.
Sep. 2004 Representative Director and President, and CEO of TOSE
CO., LTD.
Dec. 2015 Representative Director and Chairman, and CEO of TOSE
CO., LTD. (current position)
Jun. 2017 Director of the Company (current position)

Apr. 1979 Joined Shiseido Co., Ltd.
Apr. 2002 General Manager of Product Commercialization, Planning
Department, Shiseido Co., Ltd.
Apr. 2008 Corporate Officer, General Manager of Technical Department,
Shiseido Co., Ltd.
Jun. 2014 Director, Corporate Executive Officer in charge of Research &Development, Production and Technical Affairs, ShiseidoCo., Ltd.
Jan. 2016 Representative Director, Executive Vice President, Chief
Technology & Innovation Officer, Shiseido Co., Ltd.
Mar. 2018 Senior Advisor, Shiseido Co., Ltd
Jun. 2018 Director of the Company (current position)
Apr. 2022 External Director, Cross Plus Inc. (current position)

External Director

External Director

Chizuru Yamauchi

Hisae Sato

Apr. 1975 Joined Nippon Life Insurance Company
Mar. 2009 Head of Kagayaki Promotion Office, Nippon Life Insurance
Company
Mar. 2014 General Manager, Service Planning Dept., Nippon Life
Insurance Company
Mar. 2015 Executive Officer, General Manager, CSR Promotion Dept. incharge of diversity promotion, Nippon Life Insurance Company
Mar. 2019 Managing Executive Officer, General manager of Health &Productivity Management Promotion Division, Nippon Life
Insurance Company
Jul. 2019 Director and Managing Executive Officer, General manager of
Health & Productivity Management Promotion Division, incharge of Olympic & Paralympic Games Promotion Dept.,
Public Affairs Dept., CSR Promotion Dept., HealthManagement Dept., Nippon Life Insurance Company
May. 2021 Chair, Diversity and Inclusion Sub Committee, Labor Policy
Committee, Kansai Economic Federation
Mar. 2022 Director, Nippon Life Insurance Company
Jul. 2022 Advisor, Nippon Life Insurance Company (current position)
Jun. 2023 Director of the Company (current position)

Apr. 1985 Joined the Hokkaido Takushoku Bank, Limited
Sep. 1997 Joined Watson Wyatt K.K. (current Towers Watson Investment
Services K.K.)
Feb. 2004 Joined AIG Global Investment Corp., Japan (current PineBridge
Investments Japan Co., Ltd.) as Deputy General Manager ofInstitutional Business Development DivisionSep. 2005 Joined Nissan Motor Co., Ltd. as Shukan, Chief Investment
Officer, Treasury Department
Apr. 2008 Member of the Investment Committee, the Government
Pension Investment Fund of Japan
Jun. 2016 Councilor, International Christian University (current position)
Jun. 2017 Trustee, International Christian University
Apr. 2018 Member of Fund Management Committee of Local PublicService Mutual Aid Associations (current position)
Member of Fund Management Committee of Pension Fund
Association for Local Government Officials (current position)
Apr. 2021 Member of Working Group for Investment Policy of The
University Endowment Fund, Council for Science, Technology
and Innovation, Cabinet Office
Oct. 2021 Member of the JST* Investment Advisory Committee(current position)* JST: Japan Science and Technology Agency
Feb. 2022 Member of Expert Committee of Council for Science,
Technology and Innovation, Cabinet Office
Apr. 2022 Adjunct Member of Pension Actuarial Subcommittee of theSocial Security Council, Ministry of Health, Labor and Welfare(current position)
Jun. 2023 Director of the Company (current position)

External Director

Koji Nitto
Apr. 1983 Joined OMRON Corporation
Jun. 2011 Executive Officer, Senior General Manager, Global Resource
Management HQ, OMRON Corporation
Apr. 2013 Managing Executive Officer, Managing Director, Global
Resource Management HQ, Senior General Manager, Global
SCM and IT Innovation HQ, OMRON Corporation
Apr. 2014 Senior Managing Executive Officer, Global Strategy HQ,OMRON Corporation
Jun. 2014 Director, Senior Managing Executive Officer, Global Strategy
HQ, OMRON Corporation
Apr. 2017 Director, Senior Managing Executive Officer, Chief Financial
Officer (CFO), Global Strategy HQ, OMRON Corporation
Apr. 2023 Director, OMRON Corporation
Jun. 2023 Director of the Company (current position)

63 ■ WACOAL HOLDINGS

Representative Director, Vice President and Executive Officer and CFO

Masaaki YajimaGovernance

Audit & Supervisory Board Members
Audit & Supervisory Board Member

Audit & Supervisory Board Member

Shinichi Kitagawa

Katsuhiro Okamoto

Mar. 1985 Joined the Company
Apr. 2008 Director and General Manager of Accounting and
Administration Division of Studio Five Corp.
Apr. 2009 Director and General Manager of Business Control Division ofStudio Five Corp.
Apr. 2013 IR/Public Relations Officer of the Company
Apr. 2018 General Manager of Accounting Department of the Company
Jun. 2020 Audit & Supervisory Board Member of the Company(current position)
Jun. 2021 Audit & Supervisory Board Member of Wacoal Corp.
(current position)

Mar. 1986 Joined the Company
Apr. 2010 Materials Control Manager of Technology/Production Divisionof Wacoal Corp.
May 2012 Representative Director and President of Hokuriku Wacoal
Sewing Corp.
Apr. 2014 Representative Director and President of Kyusyu Wacoal
Manufacturing Corp.
Apr. 2016 General Manager of Innerwear Merchandising Supervisory
Division, Wacoal-Brand Operations of Wacoal Corp.
Apr. 2018 Corporate Officer, General Manager of Wacoal-Brand
Innerwear Products Supervisory Division, Wholesale Division of
Wacoal Corp.
Jun. 2021 Audit & Supervisory Board Member of Wacoal Corp.
(current position)
Jun. 2021 Audit & Supervisory Board Member of the Company(current position)

External Audit & Supervisory Board Member

External Audit & Supervisory Board Member

Mitsuhiro Hamamoto

Hitoshi Suzuki

Oct. 2000 Admitted to the Bar
Oct. 2000 Joined the Law Office of Tadashi Yamada
Oct. 2004 Joined the Kikkawa Law Office
Apr. 2008 Partner of the Kikkawa Law OfficeJun. 2017 Audit & Supervisory Board Member of the Company(current position)
Feb. 2019 Managing Partner of Hamamoto Law Office (current position)

Apr. 1977 Joined The Mitsubishi Bank, Ltd. (current “MUFG Bank, Ltd.”)
May. 2002 General Manager, Treasury Planning Office, The Bank ofTokyo-Mitsubishi, Ltd. (BTM) (current “MUFG Bank, Ltd.”)
Jun. 2005 Executive Officer and General Manager, Treasury Planning
Office, BTM
Jun. 2008 Managing Director, Chief Executive, Global Markets Unit,
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU)(current “MUFG Bank, Ltd.”)
May. 2011 Senior Managing Director, Chief Executive, Global Markets
Unit, BTMU
Jun. 2012 Deputy President, BTMU
Jun. 2014 Corporate Auditor, BTMU
Jun. 2016 Director, Audit and Supervisory Committee Member, BTMU
Jun. 2017 Advisor, BTMU
Jul. 2017 Member of the Policy Board, Bank of Japan
Sep. 2022 Advisor, Mitsubishi UFJ Research and Consulting Co., Ltd.
(current position)
Jun. 2023 Audit & Supervisory Board Member of the Company(current position)

External Audit and Supervisory Board Member

Motoko Tanaka
Oct. 1989 Joined Tohmatsu Awoki & Sanwa (current “Deloitte Touche
Tohmatsu LLC”)
Mar. 1993 Registered as Certified Public Accountant
Oct. 1995 Deloitte & Touche LLP, New YorkJul. 2003 Partner of Deloitte Touche Tohmatsu LLC
Jul. 2020 Managing Partner of Tanaka CPA Office (current position)
Jun. 2022 Outside Director and Audit & Supervisory Committee Memberof TOWA Corporation (current position)
Jun. 2023 Audit & Supervisory Board Member of the Company(current position)

Significant concurrent positions
https://www.wacoalholdings.jp/ir/public_item/soukai/files/soukai_01_230602.pdf

Skills Matrix for Directors and Audit & Supervisory Board Members
Name

Independence
Male(for external
Female officer only)

Expertise and experience beneficial to the Company*
Company
management(experienceand insight)

Legal andcompliance

Investment/
Financial/
Capital market

Finance andaccounting

Sustainability Human resourceand diversity and organizational
development
and inclusion

Globalawareness

Digitaltransformation

MarketingTechnology andproduction
quality control

Masaaki Yajima
Akira Miyagi
Shigeru Saito
Directors

Tsunehiko Iwai
Chizuru Yamauchi
Hisae Sato
Koji Nitto
Shinichi Kitagawa

Katsuhiro Okamoto
Audit &
Supervisory Mitsuhiro Hamamoto
Board
Members
Hitoshi Suzuki
Motoko Tanaka* The above overview does not represent the entirety of directors’ and Audit & Supervisory Board members’ expertise and experience.

INTEGRATED REPORT 2023

■ 64

Corporate GovernanceThe basic policy and purpose of the Wacoal Group’s corporate governance is to continuously enhance corporate value
by increasing transparency and ensuring the fairness and independence of corporate management in order to build
mutual trust in relationships with every stakeholder, including shareholders, customers, employees, business partners,
and local communities.
Corporate Governance Guidelines
https://www.wacoalholdings.jp/en/group/files/governance_guidelineen.pdf

Corporate Governance Structure
We, as a holding company, have adopted the company with Audit & Supervisory Board system in accordance with the Companies Act for the purpose of
ensuring the corporate governance of group companies, and have both the Board of Directors and the Audit & Supervisory Board monitor and audit the
management and operation of the Company. In addition, we have voluntarily established the Nomination of Directors Advisory Committee and Remunerationof Directors Advisory Committee, the majority of which are composed of independent external directors, as the advisory bodies to the Board of Directors.

Summary of the Corporate Governance System and the Reasons for Its Adoption

Overview of the Corporate Governance Structure(as of June 28, 2023)

The Company has adopted a governance system based on a Board of Directors,
comprising directors who are conversant with businesses and external directors withdiverse professional backgrounds, and an Audit & Supervisory Board, including external
Audit & Supervisory Board members. This governance system enables the holding
company to effectively supervise and audit the execution of operations at Group companies
and to realize and maintain high-quality business management. In addition, the Nominationof Directors Advisory Committee and the Remuneration of Directors Advisory Committee
have been established as advisory bodies to the Board of Directors. The fairness,
independence and objectivity are enhanced by having a majority of both of theseCommittees composed of independent external directors and by having an independent
external director serve as the Chair of each of these Committees.
The Board of Directors comprises seven directors, five of whom are external directors
and two of whom are woman, who carry out management decision-making and supervisionfrom an objective perspective. They aim to reinforce supervisory functions and enhance
decision-making. To clarify management responsibility, directors are appointed for one year.
Thus, we have built a business management system that enables rapid responses tochanges in business conditions. Comprising five Audit & Supervisory Board members, threeof whom are external members, the Audit & Supervisory Board aims to strengthen theirsupervision and auditing of business management.

Audit & Supervisory
Board system

FormatNumber of directors

7

Of whom, external directors

5

Term of directors

1 yearNumber of Audit & Supervisory
Board members
Of whom, external Audit & Supervisory
Board members

538

Number of independent officers
Participation of external directors indetermination of remuneration

Yes

Organizations to assist in decision-making

Nomination of Directors
Advisory Committee andRemuneration of Directors
Advisory Committee
Group Management Meeting,Management Issues
Review Meeting, andQuarterly Achievements
Review Meeting

Key committees

Results-linked remuneration

Yes

Corporate Governance Initiatives
2005
TopicsRepresentative
Director andPresident

2010

2005 Establishment of apure holding company

2015

2020

2013 Wacoal stopped listing ADRs on the U.S. NASDAQ
market and de-registered with the SEC.

2018 Hironobu Yasuhara

Yoshikata Tsukamoto

2022 Revised the ratio of base compensationand stock compensation2005 Increased the number of2010 Increased the number ofexternal directors by two
external directors bymembers and the number
one memberof external Audit &Supervisory Board
members by one member

2023 Increased the numberof external directors
by two members

External directors: 2
External Audit &Supervisory Board
members: 3

External directors: 5
External Audit & Supervisory
Board members: 3

External directors: 3; External Audit & Supervisory Board members: 3(For the period of 2013-2014 only, there were 2 external directors and3 external Audit & Supervisory Board members)

2018 Establishment of the Remuneration of Directors Advisory
Committee and the Nomination of Directors Advisory
Committee

2007 Establishment of theRemuneration of Directors
Advisory Committee
Establishmentof committees

65 ■ WACOAL HOLDINGS

2023 Masaaki Yajima

2021 Introduction of Compensation Framework in
the Form of Transfer-Restricted Stock

Compensation/
Evaluation

Number of
independent
external officers

2022 Changed the structure of the Group
Philosophy for the first time since ourfounding and defined our new
Mission in modern society

2015
Establishment of the
Independent External
Auditors & Directors
Meeting2017 Establishment of the Corporate Ethics andRisk Management Committee by integrating
the Risk Management Committee andCorporate Ethics Committee

2022 Establishment of the
Sustainability Committee

GovernanceCorporate Governance Structure
General Meeting of Shareholders
Election / RemovalElection / Removal
Consultation
Reportingof findings

3 Remuneration of Directors

Consultation

Advisory Committee
Chairman: External director 7 directors(of whom 5 are external directors)
4 Independent External Auditors & Directors Meeting

5 Audit & Supervisory
Board members(of whom 3 are external Audit &Supervisory Board members)

1 Board of Directors*

7 directors(of whom 5 are external directors)

Reportingof findings

Cooperation

Secretariat Office for Audit &Supervisory Board

Assessment

Supervision(Business execution)

Election /RemovalReport to

Audit

Representative Director, President and CEO

7 Corporate Ethics and Risk Management Committee

Key Committees

Quarterly
Achievements
Review Meeting*

Give audit
instructions toReport to

8 Sustainability Committee

Audit Office

Cooperation

Corporate Ethics
Hotline6 Group Management Meeting*Management
Issues Review
Meeting

5 Audit & Supervisory Board

Audit

Advisory Committee
Chairman: External director 7 directors(of whom 5 are external directors)

Accounting Auditors

2 Nomination of Directors

Election /RemovalSubcommitteeforCompliance

Quality
Assurance
Council

Subcommittee
for BCP and
Disaster
ControlMeasuresAccounting
audit
Subcommittee
for Information
Security

Subcommittee
for Carbon
NeutralSubcommittee
for Resource
Circulation

Give audit instructions to

Subcommittee
for CSR
Procurement

Subcommittee
for Human
Rights, D&IInternal
audit

Report to

Operating department / Group company* Both internal and external Audit & Supervisory Board members attend meetings for the purpose of auditing the performance of duties by directors

Overview and Composition of the Board of Directors, Advisory Committees, and Other Meetings
Name

Description

Number ofmeetings convened
in FY2023

17

1

Board of Directors

Our Board of Directors is entrusted by shareholders and makes the best decisions based on fair judgment. In
addition, our Board of Directors exercises its supervisory function for the execution of its business and aims tomaximize corporate value. Our Board of Directors conducts a review of our medium- to long-term management
strategy and social issues, as well as decision-making regarding material matters as stipulated in applicablelaws and regulations or in our Articles of Incorporation. The Company will formulate basic policies onsustainability issues, and monitor the allocation of management resources and the implementation of businessportfolio strategies to contribute to sustainable growth.

2

Nomination of Directors
Advisory Committee

This Committee discusses and provides recommendations to our Board of Directors on matters related toevaluation, election, dismissal, and promotion of directors, and on matters regarding establishment andrevisions of rules and bylaws of directors. Attendance and approval of all committee members is required topass resolutions.

83

Remuneration of Directors
Advisory Committee

This Committee discusses and provides recommendations to our Board of Directors on matters regarding
performance review and remuneration of directors, and matters regarding remuneration system of directors.
Attendance and approval of all committee members is required to pass resolutions.

74

Independent External
Auditors & Directors Meeting

The meeting attendees, mainly composed of our independent external officers, exchange and share opinions
regarding corporate governance and our Board of Directors. The meeting attendees analyze and evaluate theeffectiveness of our Board of Directors, identify issues, compile improvement measures, and provide
recommendations to our Board of Directors.

2

5

Audit & Supervisory Board

The Audit & Supervisory Board is entrusted by shareholders to discuss or resolve important matters relating to
the audit and establish a high-quality corporate governance system that responds to social trust. The Board
builds a system to enhance the effectiveness of audit by each Audit & Supervisory Board member.

18

6Group Management Meeting

The Meeting considers matters concerning the management strategy of the Group and important management
issues. The Meeting also conducts preliminary deliberations on important matters mainly related to businessexecution, prior to resolutions by the Board of Directors, from the viewpoint of legality, objectivity and rationality.

23

Corporate Ethics and Risk
Management Committee

The Committee identifies risks related to the overall management of the Group, and build and strengthen ourrisk management system. This Committee prescribes the “Risk Management Basic Rules” subject to theapproval of the Board of Directors. The Committee clarifies the responsibilities by risk category pursuant tothese rules, and formulates a risk management system that thoroughly and/or comprehensively controls
potential risk within the Group. This Committee promotes risk-mitigation initiatives, identifies risks, monitors theimplementation of countermeasures, and reports the operation status of our risk management system to theBoard of Directors a regular basis.

6

Sustainability Committee

In order to accelerate our initiatives to achieve balancing “to resolve social issues” and “sustainable growth”
through our business, this Committee formulates specific measures, monitors progress, and evaluates thestatus of achievement based on our basic policy on sustainability issues including climate change, global
environmental issues and human rights issues. The Board of Directors monitors the allocation of management
resources and the implementation of strategies related to the business portfolios to ensure that the initiatives of
the Sustainable Committee contribute to sustainable growth.

7

7

8

INTEGRATED REPORT 2023

■ 66

External Directors and External Audit &Supervisory Board Members

Criteria to Ensure the Independence of Outside Officers
https://www.wacoalholdings.jp/group/files/governance_outsidedirectors_en.pdf

We have elected those persons having extensive knowledge and experience as executives and persons having insight into investment and financial capital
markets, to our external directors, and each of such persons takes a role in improving the appropriateness of the decision made by the Board of Directors bygiving objective and independent advice based on their long careers in each business area and extensive professional knowledge. Also, we have elected
those persons who have experiences as business administrators in financial industry, and extensive knowledge from his experience as a member of the Policy
Board of the Bank of Japan, independent attorneys at law or independent certified public accountants having a considerable degree of finance andaccounting knowledge, to our external Audit & Supervisory Board members. Each external Audit & Supervisory Board member conducts a strict audit on thelegality of directors’ decision making and performance of their businesses from a technical perspective by maintaining high levels of independence.

Reasons for Election of External Directors and External Audit & Supervisory Board Members
Reason for election

Expected field of expertiseand knowledge

Attendance at Board of
Directors’ meetings(fiscal year ended
March 31, 2023)

Shigeru Saito

It is anticipated that Shigeru Saito will enhance management supervisory functions
by providing input from various perspectives based on his extensive knowledge andexperience as a representative director and chairman of another company.

Company management, global
awareness, and digitaltransformation

17/17

Tsunehiko Iwai

In addition to his extensive knowledge and experience as a business manager,
Tsunehiko Iwai can also be expected to contribute to management using his
specialist knowledge relating to research, production, and various fields oftechnology.

Company management, legal,
compliance, sustainability,
diversity and inclusion,
marketing, technology, andproduction quality control

17/17

Chizuru Yamauchi

In addition to extensive knowledge and experience as an executive, Chizuru
Yamauchi has expertise in diversity and inclusion. We expect she will provide advice
that contributes to human resource strategies, such as women’s empowerment andpersonnel development, while further enhancing the supervisory function of ourcorporate management.

Company management,sustainability, diversity & inclusion—

Hisae Sato

In addition to knowledge and insight related to investment and financial capital
markets, Hisae Sato has experience overseeing pension assets on a global level.
We expect she will help improve the Company’s corporate value and further
enhance the supervisory function of the Board of Directors.

Investment/financial/capital
market, finance/accounting,sustainability, diversity &inclusion—

Koji Nitto

Koji Nitto has extensive experience as a manager who can incorporate finance into
management strategies. We expect he will help improve the Company’s corporate
value and further enhance the supervisory function of the Board of Directors.

Company management,
investment/financial/capital
market, finance/accounting,global awareness—

External Directors

External Audit &Supervisory Board members

Reason for election

Attendance at Board of Directors’ meetings andAudit & Supervisory Board meetings(fiscal year ended March 31, 2023)
Board of Directors’ meetings

Audit & Supervisory
Board meetings

Mitsuhiro Hamamoto

Mitsuhiro Hamamoto’s experience and specialized knowledge as an attorney makehim an appropriate external Audit & Supervisory Board member.

17/17

18/18

Hitoshi Suzuki

As a manager with many years of experience in the financial industry, we expect
Hitoshi Suzuki will apply his knowledge and experience to our auditing system.

——

Motoko Tanaka

As a certified public accountant, we expect Motoko Tanaka will apply her specialized
knowledge and experience in accounting and finance to our auditing system.

——

Strengthening of the Functions of the Audit & Supervisory Board and Its Members
The Audit & Supervisory Board comprises two internal full-time Audit & Supervisory Board members and three external Audit & Supervisory Board members.
In addition, one full-time staff member is assigned as the secretariat of the Audit & Supervisory Board to assist the Audit & Supervisory Board members in theirduties as needed. The Audit & Supervisory Board makes decisions on the preparation of the audit report, selection and dismissal of full-time Audit &Supervisory Board members, audit policies, methods of investigation of businesses and financial conditions, and other matters related to the execution ofduties by Audit & Supervisory Board members, in accordance with the Companies Act, and also makes decisions on matters related to the election, dismissal
or non-reappointment of accounting auditors, consent to compensation, etc., of accounting auditors, consent to the appointment of Audit & Supervisory
Board members, and other matters related to the resolution of the Audit & Supervisory Board. In addition, the Audit & Supervisory Board exchanges
information and opinions on matters related to audits, including prior consideration of the agenda of Board of Directors meetings and sharing of the agenda ofimportant meetings attended by full-time Audit & Supervisory Board members, exchanges opinions with representative directors, and interviews with executive
directors and directors of important subsidiary Wacoal Corp. on the status of execution of their duties.
At meetings of the Audit & Supervisory Board, external Audit & Supervisory Board members communicate and coordinate extensively with full-time Audit &Supervisory Board members. For example, the latter provide the former with reports on the status of audits of operations and the details of discussions atimportant meetings. External Audit & Supervisory Board members also receive various types of reports from the accounting auditor and departments engaged
in internal control as well as audit internal control systems, including the appropriateness of financial reporting. With a view to heightening the effectiveness ofaudits, external Audit & Supervisory Board members engage in a range of other activities. For example, they attend important meetings other than those of theBoard of Directors in light of discussions of the Audit & Supervisory Board and visit subsidiaries to conduct audits and investigative interviews.
67 ■ WACOAL HOLDINGS

GovernanceInternal Control
Pursuant to the “Internal Audit Regulations,” our Audit Office, the internal audit division, which is directly under the control of the Representative Director andPresident, audits the legality and appropriateness of the execution of operations at the Company and our domestic and overseas subsidiaries, and evaluates
the effectiveness of the internal controls. The number of staff of our internal audit department (Audit Office) was 7 as of March 31, 2023.
Our Audit & Supervisory Board members and internal audit department (Audit Office) have a regular meeting for reporting and confirmation once a month.
The main purpose of such meeting is to report the discussions at major meetings at which our Audit & Supervisory Board members attended, and plans andachievements by our Audit Office. We have implemented an audit system allowing the sharing of documents and information necessary for audit so that audit
working papers are mutually exchanged and confirmed by our Audit & Supervisory Board members and Audit Office, and the audit can be performed more
efficiently and effectively through alliance between our Audit & Supervisory Board members and Audit Office. Audit & Supervisory Board members andaccounting auditors hold regular reporting and review meetings. The contents included explanations of audit plan, report on results of audit pursuant toCompanies Act, report on quarterly review, and report on results of audit pursuant to Financial Instruments and Exchange Act and internal control audit.

Measures to Strengthen the Effectiveness of Corporate Governance
The Company conducts an annual evaluation on the effectiveness of the Board of Directors, and strives to continuously enhance the functions andeffectiveness of the Board of Directors. We work on the improvement measures for issues identified by the evaluation, and confirm the status of improvement
during the evaluation of the Board of Directors in the following fiscal year, while at the same time continuing to confirm the evaluation of the current issues.
Evaluation Process
Starting from the fiscal year ended March 31, 2022, we have changed to a method of analyzing and/or evaluating the effectiveness of the Board of Directors
using a third-party evaluation design (including, among other things, preparation of questionnaire survey, analysis, and comparison with other companies,
identifying issues, drafting action plans). With the aim of further improving the effectiveness of the Board of Directors from the viewpoints of “enhancing trustfrom stakeholders (creating social value)” and “improving organizational performance (enhancing corporate value)”, we conduct a questionnaire survey for all
directors and Audit & Supervisory Board member, and conduct interviews of external directors and external Audit & Supervisory Board members through athird party organization to gain a deeper understanding of their responses and awareness of the issues raised in their comments. We compile improvement
measures based on the analysis of such responses and issues. The improvement measures are discussed at the Independent External Auditors & Directors
Meeting and recommendations are provided to the Board of Directors.
The evaluation items of the questionnaire survey are as follows:
1. Roles and responsibilities of the Board
2. Composition of the Board
3. Quality of deliberations (agenda items and document contents), and
4. Constructive dialogue with stakeholders
The analysis and/or evaluation based on the questionnaire survey and interviews using the third-party evaluation design is conducted every other year. During
the interval year, we focus on initiatives to improve the issues identified from the questionnaire survey, while at the same time conducting evaluation throughmonitoring and sharing opinions at the Independent External Auditors & Directors Meeting.

Evaluation Results of Effectiveness and Progress on Initiatives for Improvement (Fiscal Year Ended March 31, 2023)
Based on the evaluation results, we plan to further strengthen the supervisory and advisory functions of the Board of Directors, while continuing to makeefforts for improvement and further utilizing the knowledge of external directors.

Evaluation Result (Issues and Concerns)

Progress/Plan of Initiatives for Improvement

Allocation of more time to the consideration of important businessmatters, such as medium to long-term strategies, and at the sametime, utilization of knowledge of external directors and promotion of
more active discussion at the meetings of the Board of Directors.

We have increased the number of agenda items other thandecision-making items related to business execution, such as
consideration of medium- to long-term business issues, reporting
and/or sharing important brand strategies or promotion strategies. We
also have moved forward with advance preparation and environmental
arrangement that led to active discussion.

Further improvement in the quality of deliberations based oncommunication with our employees and inspection of local businessoffices in order to understand the reality of business conditions as wellas risks and opportunities.

We have set up an opportunity for a planned visit and/or inspection
at stores, factories and business offices including overseas, as well
as opportunities for communicating with the Corporate Officers
and managers.

INTEGRATED REPORT 2023

■ 68

Executive Remuneration System
Under the Company’s system for the compensation of officers, compensation comprises basic compensation, which is fixed; bonuses linked to theCompany’s performance in each fiscal year; and share-based stock options, which provide medium- to long-term incentives. Given that they are not involvedin the execution of duties, independent outside directors and Audit & Supervisory Board members only receive fixed basic remuneration. Further, in July 2022
the Company revised the ratios of stock compensation to basic compensation so that stock compensation accounts for a larger percentage of thecompensation of officers as they rise in rank. The breakdown of rank-based percentages reflecting said change will be within the ranges shown below. Further,
this breakdown assumes calculation methods for performance-based bonuses that are in accordance with standard values.
Basic Remuneration

Performance-based bonuses

Restricted Stock

60 %–68%■ Roles and Activities of Remuneration of Directors Advisory Committee
As an advisory body to Board of Directors, the Remuneration of Directors
Advisory Committee discusses and resolves matters related to officers’
remuneration and system from an independent and objective perspective.
A majority of the members of the Remuneration of Directors Advisory
Committee, chaired by independent external director Mr. Tsunehiko Iwai,
are independent external directors. The Remuneration of Directors
Advisory Committee is also attended by the external Audit & Supervisory
Board member(s) as an observer to ensure transparency.
■ Roles and Agenda at the Board of Directors’ Meeting
Board of Directors discusses and resolves matters related to officers’
remuneration based on recommendations received from the Remunerationof Directors Advisory Committee.

18 %14%–22%

August 10, 2022: Review of the system for the compensation of officers
September 29, 2022: Method of Calculating of executive bonus
February 24, 2023: Compensation (monthly compensation) for FY2024
March 29, 2023: Performance-based Bonus for FY2023
April 28, 2023: Performance-based Bonus for FY2023

May 12, 2022: Review of total transfer-restricted stock
May 12, 2023: Performance-linked bonus for FY2023
May 31, 2023: Remuneration (monthly remuneration) for FY2024■ Basic Remuneration
The basic remuneration is based on the so-called single rate remuneration system, in which the same remuneration is paid for the same position. The
Company annually verifies the adequacy of the level of remuneration, which has been set according to the business results and scale of the Company and isbased on comparison with other companies within the same industry or of the same scale through the investigation results on remuneration prepared by an
external agency.
■ Performance-Based Bonuses
The total amount of the performance-based bonus is based on achievement as a percentage of the consolidated operating income recorded for each fiscal
year, plus other performance factors (consolidated net sales, consolidated income before income taxes), to increase the degree of linkage between bonuses
and consolidated business performance. Performance-based bonus is paid once a year after approval at the general meeting of shareholders for the relevant
fiscal year.
■ Restricted Stock
The restricted stock are determined in consideration of the monthly amount of basic remuneration and the fair value of stock, which in turn are determined
pursuant to the recommendations of the Remuneration of Directors Advisory Committee, which is composed of members, majority of which are independent
external directors and will be allotted in the number determined and resolved at a Board of Directors meeting once a year. Allotted shares will be subject totransfer restriction during the period from the date allotted shares are granted until the date such director, Audit & Supervisory Board member or Corporate
Officer designated by the Company retires from their position. The transfer restrictions on all allotted shares will be removed upon the expiration of the transfer
restriction period if such eligible grantee has continuously held the position of director, Audit & Supervisory Board member or Corporate Officer until the date of
the first Ordinary General Meeting of Shareholders. The Company may repurchase all of the allotted shares bearing transfer restrictions as a result of a breachof restricted stock allotment agreement without consideration.
■ Reviewing the System for the Compensation of Officers with a View to Strengthening Its Effectiveness
The Remuneration of Directors Advisory Committee is engaged in an ongoing review of the entire system for the compensation of officers. Going forward, thecommittee will consider the following matters:● The mix of basic compensation, performance-based bonuses, and medium- to long-term incentives (review of monetary amounts and percentages)● The calculation method for performance-based bonuses (strengthening linkage with the numerical targets of the medium-term management plan)

Remunerations Paid to Officers in FY2023
Classification

Total amount of
remuneration, etc.
(¥ million)

Directors (excluding external directors)

Total amount of remuneration, etc., by type (¥ million)

Number of
eligible recipients

Basiccompensation

Performance-based
bonuses

Stockcompensation

Non-monetary
remuneration

216

172

–

44

44

5

Audit & Supervisory Board members(excluding external members)

40

40

–

–

–

2

External directors and external Audit &Supervisory Board members

50

50

–

–

–

6

69 ■ WACOAL HOLDINGS

Governance

Policy on Cross-Shareholdings and Standards for Exercising Voting Rights
From the viewpoint of improving asset efficiency, the Company intends to reduce its cross-shareholdings by approximately ¥30 billion during the revised
medium-term management plan period (from the fiscal year ending March 31, 2024 to the fiscal year ending March 31, 2026), and to reduce the ratio ofcross-shareholdings to net assets to 10% or less.
Furthermore, the Corporate Governance Guidelines stipulate that the purpose of the Company’s cross-shareholdings is to enhance enterprise value overthe medium to long term by maintaining and strengthening transactional relationships; establishing, maintaining, and strengthening cooperative andtransactional relationships with respect to business development; and maintaining stable financial transactions. The Company determines whether
cross-shareholdings are appropriate from a medium- to long-term perspective and whether the attendant benefits and risks of cross-shareholdingscommensurate with equity cost are verified, and the findings are periodically reported to the Board of Directors. Based on the verification findings, the Board of
Directors analyzes whether cross-shareholdings contribute to the enhancement of the Company’s corporate value over the medium to long term and decides
whether to continue or dispose of cross-shareholdings. Stocks that have lost value as holdings are gradually disposed of or reduced, taking into consideration
the situation of the counterparty company. The Board of Directors reviews the significance of each stock holding on a case-by-case basis. With respect to theexercise of voting rights for cross-shareholdings, we determine whether to approve or disapprove of proposals based on a comprehensive consideration ofwhether they contribute to the enhancement of the corporate value of the companies concerned and the Company, while fully respecting the management
policies of the companies in which we have invested.
Reference: Shareholdings of Wacoal Corp.

Number of stocks

FY2020

FY2021

FY2022

FY2023

84

73

63

59

Monetary amount (¥ billion)

42.2

50.1

46.0

44.0

As a percentage of total assets

15.2%

15.5%

15.2%

15.4%

Note: The shareholdings of Wacoal Corp. for which the largest monetary amount is recognized on the balance sheets in relation to investment in equity securities(the monetary amount of equity securities recognized) have been stated.

Compliance and Risk Management Structure
The Company’s Corporate Ethics and Risk Management Committee has the Representative Director, President and CEO acting as the administrative manager,
supervisor, and the director, vice president and managing corporate officer in charge of Group business management as its chairperson. The committee istasked with developing the compliance structure, examining compliance issues that could significantly affect the Wacoal Group, ensuring all employees
understand and internalize corporate ethics, and effectively promoting control of any management risks to the Wacoal Group.

Compliance Structure

Risk Management Structure

Subcommittee for Information Security

The Company has established the Wacoal
Code of Ethics and the Corporate Ethics:
Wacoal’s Code of Conduct to ensure that
directors and employees perform theirduties in compliance with laws,
regulations, and the articles ofincorporation and sound social norms.
Further, the Wacoal Code of Ethics andthe Corporate Ethics: Wacoal’s Code of
Conduct stipulates resolute refusal of
demands from antisocial forces. In
addition, the Company has established aninternal whistleblowing system and othersystems that enable directors andemployees to report on any misconduct
or inappropriate behavior.

Subject to the approval of the Board of
Directors, the Corporate Ethics andRisk Management Committee
stipulates basic regulations for risk
management. Pursuant to theseregulations, the committee clarifies the
responsibilities for each category of risk
and advances the construction of a risk
management system thatcomprehensively encompasses the
Wacoal Group’s overall risks. Further,
given the diversification of risks related
to information security and theirincreasing impact on business
operations, a Subcommittee forInformation Security has been
established in 2022.

To reduce information security risks in theGroup’s business activities, the Subcommittee
for Information Security collects information,
investigates current situations, and conducts
analysis in relation to information security as awhole, including cyberattacks that target
customers’ personal information and criticaltechnical information. Also, the subcommittee
deliberates on the formulation of the Group’s
action policies and specific countermeasures,the establishment and abolition of related
regulations, and the implementation ofstrategic investments and monitors progress.
The deliberated policies and activity details are
regularly reported to the Board of Directors
through the Corporate Ethics and Risk
Management Committee.

System for Promoting Risk Management

Representative Director,
President and CEO

Corporate Ethics andRisk Management Committee

Subcommittee for Compliance

Quality Assurance Council

Discusses and makes decisions on
the compliance management structure
and other significant matters

Promotes quality assurance activities
based on quality assurance regulations

Promotes the consideration of compliance issues that have a serious
impact on the Wacoal Group, enhancement of awareness andenlightenment on corporate ethics, and the effective control ofany management risks to the Wacoal Group.

Subcommittee for BCP and
Disaster Control Measures

Subcommittee for Information Security

Takes measures to prevent andrespond to accidents, disasters,
and other emergencies

Advances activities aimed at
reducing information security risks,such as information leaks

INTEGRATED REPORT 2023

■ 70

Engagement (Establishing Mutual Trust Through Dialogues)
We consider constructive dialogue regarding improving corporate value important for strengthening mutual trust with all
stakeholders. Therefore, in order to link medium- to long-term improvement in corporate value and the construction of ahighly effective management system, we actively undertake engagement activities that target stakeholders, including
shareholders and investors, and reflect their valuable opinions in our management strategy.

Basic Policy on Dialogue with
Shareholders and Other Stakeholders

Basic Policy on Information
Disclosure

As it is our opinion that actively holding constructive dialogue withshareholders and investors and reflecting the results of that dialogue inmanagement leads to medium- to long-term improvements in corporate
value and sustainable growth, we set policies related to these activities.

We see timely disclosure of accurate information as the foundation ofmutual trust in relationships with all stakeholders. We are also keenly
aware that disclosure is essential for accurate assessments of ourcorporate value. We actively disclose information while complying with all
related regulatory requirements.

Policy for dialogue with Shareholders / Investors
https://www.wacoalholdings.jp/en/sustainability/talk_with_stockholder/

Basic Policy on Information Disclosure
https://www.wacoalholdings.jp/en/ir/management/discloser/

Stakeholder Relations
At the Wacoal Group, we define corporate value as the integration of all value gained by customers, employees, shareholders, investors, and otherstakeholders. Through our communication with all stakeholders, we strive to maintain solid relationships and build deep mutual trust. Moreover, the detailsof our investor relations and ESG (environmental, social, and governance) activities are communicated through the efforts of the Corporate
Communications Department.

Communication Activities for Analysts and Institutional Investors (Results)
Activity

FY2021

FY2022

FY2023

Individual meetings with institutional investors and analysts

126 times

131 times

128 times

Results briefings (for analysts and institutional investors)

4 times

4 times

4 times

Business briefings (for analysts and institutional investors)

3 times

3 times

Twice

—

—

—

Once

Twice

Once

—

—

—

Once

Once

Once

4 times—

10 times

Factory tours (for analysts and institutional investors)
Conferences organized by securities companies
Overseas road shows
Briefings for individual investors
Individual meetings with external directors(for analysts and institutional investors)

Activity
Feedback on IR activities (for directors)
Briefings (for employees)

FY2021

FY2022

FY2023

Quarterly

Quarterly

Quarterly

Held briefings on
integrated report for
management personnel

Held of sustainability
seminars for employees(320 participants)

Held briefings on
integrated reportfor employees(389 participants)

FY2024 IR Activities
During fiscal 2024, we will hold quarterly results briefings, normal IR meetings, investor meetings by Representative Director, President and CEO Masaaki
Yajima (15 times), and small meetings on the revised medium-term management plan that Wacoal HD and Wacoal Corp. executives participated in. We alsoplan to hold small meetings that external directors will participate in at the end of fiscal 2024.

71 ■ WACOAL HOLDINGS

GovernanceFollow-up meetings regarding the revised medium-term management plan (small meetings)
Date: December 5, 2023
Location: TokyoAttendees : Masaaki Yajima, Representative Director, President and CEO; Akira Miyagi, Representative Director,
Vice President and Executive Officer and CFO; Keisuke Kawanishi, Representative Director,
President and CEO Wacoal Corp.; Mitsuru Sekiguchi, Director Corporate Officer Head of ProductDevelopment and Merchandising Div.; Katsuya Hirooka, Director Corporate Officer In charge of
Administrative Control; Atsuko Shinoduka, Director Corporate Officer Head of Marketing Div.
Participants : 11 participants from 10 companies

Investor’s opinions of the revised medium-term management plan

At a time when the Wacoal continues to be unable to achieve its plans, it is encouraging
to hear the new senior management team apologize for past management. I highly rate
its plans to temporarily put aside consideration of performance and put the Company ona growth path by increasing brand power, customer loyalty, and workforce capabilities
following firm cost structure reform. (Person in charge of exercising voting rights)

I think that it is important to gain the understanding of employees and spread that
understanding in order to implement the revised medium-term management plan.
Wacoal employees who are unaccustomed to change may have a negative view of thedetails of the revised medium-term management plan, even though they were thoroughly
examined. I hope that progress in implementing the plan is properly shared with
employees. I do not think that employees will consider the strategy as something thatinvolves them unless a healthy sense of crisis continues to be fostered. (Fund manager)

The elimination of mass retailer discounts will probably have a major impact on theJapanese business’s stagnant sales, but selling the proper volume at the proper
price is good for both sellers and buyers and is how it should be. I would like
Wacoal to uncompromisingly move forward because ensuring profit through anappropriate profit structure, not volume of sales, is important. (Sell-side analyst)

I am concerned that if the integration of brands and product numbers isundertaken only from a quantitative perspective, such as ABC analysis, there will
be insufficient product numbers required by customers. The company should
promote business focus and selection by also giving consideration to aspects
other than quantity, such as customer opinions and value provided. Furthermore,
it would be best to establish a system that supports such activities as productplanning by delegating decision-making to the frontline, which is closer tocustomers, and leveraging the knowledge of logistics and marketing possessedby members of management and the senior management team. (Fund manager)

In-house briefings and townhall meetings regarding revised medium-term management plan
Date

: Revised medium-term management plan briefings: November 20, 21, and 22, 2023 at five locations
Townhall meetings
Plan to hold ten meetings between the end of November 2023 and March 2024
Location: Kyoto, Tokyo, online
Attendees : Masaaki Yajima, Representative Director, President and CEO; Akira Miyagi, Representative Director,
Vice President and Executive Officer and CFO; Keisuke Kawanishi, Representative Director,
President and CEO Wacoal Corp.; Mitsuru Sekiguchi, Director Corporate Officer Head of ProductDevelopment and Merchandising Div.; Katsuya Hirooka, Director Corporate Officer In charge of
Administrative Control; Atsuko Shinoduka, Director Corporate Officer Head of Marketing Div.
* Participants depend on day of the meeting
Participants : Revised medium-term management plan briefings: about 1,400 participants; Townhall meetings:
about 200 participants (expected)

Employee opinion of revised medium-term management plan

Because I learned about the company’s plans from the revised medium-term
management plan, I thought that I would give the department general manager myopinion regarding how the department should move forward. (Employee in their fifties)

It is irritating that although there are visible problems on the frontline, it has been
impossible to undertake major company-wide optimization because there is a focus on
optimization of the organization and its parts. I would like to see opportunities forcommunication because I want to work with the senior management team to solve
problems. (Employee in their thirties)

I think that it is only natural to “set out company-wide policies, and then have eachdepartment break down the policies based on a common understanding andincorporate those ideas into its strategy and operations,” but I was surprised thatdepartment general managers and section chiefs commented that “plans lack concrete
details” and questioned “how department operations should be organized.” I think thatthey do not understand the meaning of possessing authority. (Employee in their twenties)

I would like management to talk about such issues as the overall direction,
bolstering employee motivation, and an atmosphere in which people move forwardwith unity. Although I understand that traditionally detailed decisions should be left
up to departments, I was disappointed that at the briefing, the responses to manyof the detailed questions were vague. (Employee in their thirties)

It is good that following the briefings, there were townhall meetings at which
participants could directly talk with the executive management team. This provided
an opportunity to consider the role of one’s own department as seen from theoverall company and based on the stated policy. (Employee in their thirties)

Although there are quite high psychological hurdles to general employees talking
with executives, the opportunity to communicate intentions and thoughts throughdirect discussions changed the impression of the revised medium-term
management plan to positive from negative. I think it is important that both sides
come together and understand each other. (Employee in their fifties)

INTEGRATED REPORT 2023

■ 72

Investor Information(As of March 31, 2023)

Stock Listing

Tokyo Stock Exchange

Shareholder Register

Fiscal Year-end

March 31

Agent for Common Stock 1-4-5, Marunouchi, Chiyoda-ku, Tokyo

Securities Code3591

Fiscal Year

From April 1 to March 31

American Depositary

Cusip No.: 930004304

Number of Shares

64,500,000

Receipts

Ratio (ADR:ORD): 1:5

Issued(Treasury Stock: 6,487,185)Market: OTCQX

Trading Unit

100 shares

Symbol: WACLY

Mitsubishi UFJ Trust and Banking Corporation,

100-8212, Japan

Depositary

The Bank of New York Mellon, 240 GreenwichSt., New York, NY 10286, U.S.A.
Tel: 1-201-680-6825
U.S. toll free: 888-269-2377 (888-BNY-ADRS)
https://www.adrbnymellon.com/

Number of Shareholders 19,648

Ownership and Distribution of Shares
Securities firms

Major Shareholders

28.17%
39.72%
14.18%
16.84%

Other Japanesecompanies
Foreign institutions
and individuals

73 ■ WACOAL HOLDINGS

Percentageof shares
outstanding (%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

5,509

9.50

Custody Bank of Japan, Ltd. (Trust Account)

3,720

6.41

Meiji Yasuda Life Insurance Company

3,050

5.26

MUFG Bank, Ltd.

2,986

5.15

The Bank of Kyoto, Ltd.

2,352

4.06

The Shiga Bank, Ltd.

1,751

3.02

Nippon Life Insurance Company

1,569

2.71

Mitsubishi UFJ Trust and Banking Corporation

1,525

2.63

Asahi Kasei Corporation

1,241

2.14

Custody Bank of Japan, Ltd.
(Re-trust of Sumitomo Mitsui Trust Bank,
Limited; Trust Account for the retirement
allowance for Toray Industries, Inc.)

1,205

2.08

Name

Individuals
and others

Financial
institutions

Number ofshares held(Thousand shares)

1.09%

Our Corporate Website

Wacoal Holdings Corp.’s Website

Sustainability

Investor Relations

https://www.wacoalholdings.jp/enhttps://www.wacoalholdings.jp/en/sustainability/

https://www.wacoalholdings.jp/en/ir/

VisionSustainability Policy

Investor Relations> Message> The WACOAL Way> Management Information> The WACOAL Way> Message> Financial Information /> “VISION 2030”> Basic Policies and Relations> Medium-Term Management Plan

with Stakeholders

Financial Highlights> Monthly Sales Data

> Corporate Governance> System for Promoting Sustainability> IR Library> Compliance> Material Issues> Dividend and Share Repurchase> Integrated Report> Shareholder Benefits> ESG DATA BOOK

> Stock Information

Wacoal’s Business> Wacoal’s Strengths> Value Creation Process> Stock Price Information

Focus Areas of Our Initiatives(ESG Issues)

IR News> CSR Procurement> IR News> Corporate Governance> IR Schedule> Compliance> Disclaimer> Risk Management> FAQs> Material Issues> Business Field

Company Profile> Wacoal Holdings Corp.

> Quality and Safety> Wacoal Corp.

> Human Capital> Wacoal Group> Environmental> Turning Point> Social Contribution> Human Rights> Engagement with Stakeholders> ISO 26000 Comparison Table

For financial information and financial highlights, please visit the Company’s website below.
https://www.wacoalholdings.jp/en/ir/finance/

INTEGRATED REPORT 2023

■ 74

Wacoal Holdings Corp.
29 Nakajima-cho, Kisshoin, Minami-ku, Kyoto 601-8530, Japan
https://www.wacoalholdings.jp/en/