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 returningto an approach from the customer’s point of viewKeisuke KawanishiRepresentative Director, President and CEOWacoal Corp.

What We Want to Achieve through Corporate TransformationTo date, Wacoal has undertaken a variety of initiatives toservices from the customer’s point of view and not missrecover its business performance, but, unfortunately, theyopportunities to cater to them. We will implementhave not been able to produce results. We recognize that thecustomer-driven brand management and communicationreason behind this is that we have not properly faced changesmeasures to ensure that our customers correctly understandin our customers’ needs; in other words, we have lacked athe value we provide. In order to become a company that cancustomer perspective. Through our own inspections, we haveput these goals into practice, we will implement SCM reformsconfirmed 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 wideimplement measures for improvement with quickvariety 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 managementreestablish a series of processes that will lead to the nextfoundation supporting Wacoal’s business model, but thestage of growth by allocating the cash we receive asaccuracy of management declined as each operation becamecompensation for our efforts to invest in human resourcesmore efficient and the division of labor was promoted. Inand growth.

addition, we have confirmed that we have not been able tomanufacturing and sales capabilities to respond to customerhot-selling products and the promotion of their developmentneeds. 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 renewedThis means that our supply chain management (SCM) has notgrowth. 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 useneeds 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 ofbecause we operate as a vertically integrated organization,changes in customer needs and the distribution environmentthe 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 thatlong-term sales stagnation and excessive inventories.

are optimal for the entire company. By supporting the growthThrough this corporate transformation, our goal is toRevision of our Medium-Term Management PlanSince assuming office as President and CEO in April 2023, Istrategy, which we have set as our growth strategy, we willhave been working with internal and external members toevolve 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 managementsales 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 willmission 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 onstrategy are realized. We have also revised our business profitthis decision. In the revised medium-term management plantarget downward. However, we will place priority on changingperiod, I am determined to reform our business model withour business structure to one that can secure a certain levelstrong 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 severethe effects of cost structure reforms. First, we will workexternal 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 HOLDINGSFortunately, we have a large customer base and thefully share with our clients the inventory management ofof each and every employee, we hope to turn this diversitybecome a company, organization, and group of employeesinto 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 FutureWacoal of the PastValueproposition• 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 provideproducts and services that empower each customer’s individuality based on thevalues of diverse customerBrandstrategies• 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 willcultivate attractive brands with clear value• Making the innerwear market itself attractiveCustomerstrategies• Customer directory management through in-storebeauty advisors (BA)• Completing the integration of the customer datainfrastructure 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 customerthrough personalized customer experiences and improving LTVSupply chainmanagement(SCM)• Due to the product planning and development leadtime (LT), which takes more than one year toproduct development, a gap between demandand production planning tends to occurCoststructure• High cost structureDecisionmaking• Various coordination tasks hinder prompt decision making• The responsibility for management strategy is not clear• Partial optimization (lack of progress that requirescoordination)Revisedmedium-termmanagementplan• 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 optimizationINTEGRATED 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 ReformIn order to move Wacoal in this direction, I would like to talkshorten planning and development LT.

opinions and customer service knowledge of beauty advisorsand we will continue to improve the accuracy of(BA), which are our hitherto untapped strengths, to improvecommunication to meet diversifying customer preferencesthe value of the customer experience. In addition, 3Dand appropriately convey the value that we offer. In the fiscalmeasurement services and apps will be used in combinationyear ending March 31, 2024, we are renaming “SCANBE”we will promote, (2) What kind of value creation company weexisting uniform product lineup and delivery style of newto provide a consistent and highly satisfying customerand reviewing the service content. We will evolve thiswill evolve into, and (3) How we will promote a positiveproducts, and promote reform to a system that reliablyexperience both in physical stores and online. The productservice beyond the benefit of “knowing your size in 5change in mindset to realize our goals.

delivers the best-selling products to the store shelves. Wereviews that we have already begun, in which beauty advisorsseconds” to help customers find the best solution for theirhave already begun trial operations at several volume retailers,introduce products online, have been extremely successful,individual needs.

about three points: (1) What kind of business model reformAs mentioned above, we consider the fact that our SCMTo optimize the in-store product lineup, we will review theis 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 thatimproving sales. Based on the results of these trials, we willneeds to be resolved. We will work quickly to shorten the leadbegin operations at other stores of clients who havetime (LT) from manufacturing to sales, which currently takescooperated with us in the trial in the fiscal year ending March14 months, to enable the rapid development of products that31, 2024, and will also begin trials at other clients. By quicklyIn formulating this revised medium-term management plan,match trends, and to optimize the lineup of productsexpanding the range of target stores, we will strive to reducewe have renewed our determination to evolve into aintend to steer the company back toward growth bydemanded by customers while reducing overall inventory.

sales opportunity losses. In addition, we believe thatcompany that responds to the diversifying values of ourrebuilding the organization and operating from theWhile this SCM reform has the aspect of cost structuredemand-linked production, an initiative to change from thecustomers, and have defined the value we will provide ascustomer’s point of view. We intend to promoteoptimization, it is also a growth strategy because it directlyconventional batch production method to a production“empowering the individuality of each and every customer.”communication within the company and strive to create anleads to profit growth through smooth development andmethod that matches the demand situation at stores, will leadWe recognize that Wacoal’s strength is not in providingorganization that can respond to diverse customers with adeployment of products that meet customer needs, accurateto an improvement in the sufficiency ratio of hot-sellinguniform value, but in offering products and services thatsense of speed. As mentioned earlier, our potential in termsadditional production of hot-selling products, and inventoryproducts. Shortening the planning and development LT is anrespond to diversity and can be tailored to a variety ofof brand and customer service has not declined. We intendcontrol as a result. In the future, we plan to enhance our abilityinitiative to shorten the LT from development to delivery bycustomers. The only way to achieve our goals is toto strengthen our investment in human capital during theto respond to customer needs in three specific steps byutilizing existing patterns and reviewing business processesrepeatedly take on challenges and improve our ability torevised medium-term management plan period, therebybuilding a demand-driven SCM system that also makes usesuch as planning and development meetings. We intend torespond to change through a high-speed PDCA cycle. Whathelping each employee to maximize their diverse values andof digital technology. First, we will optimize the composition ofimprove sales activities by speeding up the launch of productsI strongly expect of our employees from now on is this abilityindividuality. Although I have assumed the position ofproducts in stores, second, we will shift to productionthat meet customer needs.

to respond to change. It is necessary to be keenly awarePresident 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 companyto be willing to take on the challenge of change. Wacoal,and strive to achieve the revised medium-term managementwhich 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. Wethe customer information it has accumulated over the years.

sincerely ask for the continued support of our stakeholders.

methods that match the demand situation, and third, we willWhat Kind of Value Creation Company We Will Evolve IntoHow We Will Promote a Positive Change in Mindset to Realize Our GoalsFrom the customer’s point of view, value-added productsthis area, but Wacoal is not able to offer sufficient proposals.

However, we have been in a prolonged slump because wemust be expensive, and those that are not must be pricedNaturally, needs and values differ by segment, so the profithave somehow lost our customer-orientation. It is not ancommensurately or customers will not choose them. Westructure is not uniform. We need to carefully examine what iseasy task, but unless we get rid of the culture of maintainingbelieve it is important to carefully communicate and properlyrequired in each segment, decide which brands should playthe status quo, we will not be able to escape from thedemonstrate to customers why products are priced the waywhat role in the entire company, and in some cases, since thelong-term stagnation.

they are. In our recent business performance, sales ofcurrent brands are not enough to cover the needs, considerproducts in the high price range have been strong, while salesdeploying 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 bycomfort, and health, including body data obtained from ourcustomers. As with SCM, the theme of the revised3D measurement services, personalized services utilizingmedium-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 ourIn formulating our brand portfolio, we have determinedthat we do not have sufficient response within the frameworksports 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 dataAffordable, Young people, and Seniors. We believe that whenand ID-POS (customer purchase record data), we intend towe apply our current brands, there is a market opportunity inuse digital technology to analyze data such as customer33 ■ WACOAL HOLDINGSIn this revised medium-term management plan, weINTEGRATED REPORT 2023■ 34