Results Briefing: FY Ending Feb. 2021

13th April, 2021

AGENDA

Results Overview

1 FY Ending Feb. 2021
2 Vision

3 Full-year Consolidated Business Plan
for FY Ending Feb. 2022

4 Future Growth Strategy

5 Reference Data

1

Results Overview

4Full-year Business Highlights for FY Ending Feb. 2021

Net Sales

134.1
Billion Yen

YoY 78.8%
Plan Ratio 101.4%

Operating Income

Current Net Income

11.84

3.86

ー

Billion Yen

YoY Change －11.91 Billion Yen

Billion Yen
YoY 117%
YoY Change +1.68 Billion Yen

It was a year of many unexpected turns.
Although the company was unable to recover unachieved operating income in the 1st half ofthe fiscal year, they sold some assets while also promoting business reforms, becoming
profitable with the current net income, and specifically securing future strategic funds.
> In the 1st half of the fiscal year, there were many unexpected turns, such as 1,000 stores having to close for two months due to Covid-19, increased inventory
valuation loss and a logistics center that became dysfunctional.
> In the 2nd half of the fiscal year, the impact of increased profits in strong business areas combined with other efforts, such as purchasing restraint, inventory
compression and cost control, are leading to recovery, but these are not enough to cover for the loss in the 1st half.
> In order to secure future strategic funds as markets remain uncertain, the company sold off some assets to secure profit for the current net income.

5

2nd Half Result Highlights for FY Ending Feb. 2021

Factors that Improved Business Performance with
2nd Half Plan Ratio> Net Sales: Plan Ratio of 102.5%

Net Sales

77.8

Billion yen
YoY

88.2%

Plan Ratio 102.5%

Operating Income

1.37

－

Billion Yen
YoY Change－1.6 Billion Yen

Plan Variance +5.96 Billion Yen(1) Existence of businesses with robust growth strength in the midst of
Covid-19
Golf and street brands are strong(2) Company’s own e-commerce (EC) is strong
Breakthroughs by ETRE TOKYO and TACTICS, both acquired in theprevious period> Operating Income: Plan Variance +5.96 Billion Yen(1) Gross profit margin due to recovery of net sales: Plan ratio improvedby 1.3%(2) Inventory evaluation and haphazard discounting reduced by applying
purchasing restraint(3) Reduction of fixed costs by restructuring project (rent, labor costs, etc.)
・ SG&A expenses ratio: Plan ratio improved by 6.5%

Even amidst the COVID-19 pandemic in the 2nd half, strong brands gave
impetus to business.
Also, the structural reform project and measures for professional sales
have contributed to improved profitability.

0
2nd Half Operating Income
ー1.37 Billion Yen

1st Half Operating Income
ー10.47 Billion yen

Huge profit
improvement

6

Overview by Segment
Lifestyle changes during the Coronavirus crisis have led to significant sales growth ingolf, athleisure and street brands. Conversely, demand for occasion brands and visits
to actual stores mostly in central Tokyo slumped.

18.37

22.11

2nd
half

Billion Yen

StreetFY Ending Feb. 2021

Athleisure

FY Ending Feb. 2020

FY

34.89

36.13

Billion Yen

Billion Yen

45.98

35.73

Billion Yen

Billion Yen

88.62

62.89

Billion Yen

Billion Yen

etc.
Select2nd
half

Occasion

FY
etc.

Billion Yen

Percentage / Change+3.74
Billion Yen+20.4％+1.24
Billion Yen

3.6％

10.25

ー

Billion Yen-22.3％

25.73－

Billion Yen
ー29.1％

Sales by Channel for FY Ending Feb. 2021
*1 Non-department store: Fashion building, station building, street store, outlet, etc.
*2 Others: Wholesale and other apparel businesses, non-apparel business in group companies, etc.
*3 Results of Efuego Corp, which operates EC sites centering on TACTICS in the USA, are to be consolidated
from Q2 of 2021 onward. Results are recorded in overseas net sales.

Outcomes were clear for physical stores and EC.
Due to the closure and withdrawal of physical stores, non department stores were in a very difficult
situation, with sales of minus 29.28 billion yen and a growth rate of negative 34%.
EC business continues to be strong, especially on our own website. Net sales exceeded 40 billion yen,with a positive 4.34 billion yen and a growth rate of 12%.

Domestic retail

7

Department
store
Nondepartment
store*1EC

FY Ending Feb. 2020

FY Ending Feb. 2021

21.39 Billion Yen

12.48 Billion Yen(Composition ratio:12.6%)

Increase or Decrease

8.91

－

(Composition ratio:9.3%)

Billion Yen

56.75 Billion Yenー(Composition ratio:42.3%)

Billion Yen(In-house EC ratio ofDomestic retail : 25.2%)

40.68
Billion Yen(In-house EC ratio of+4.34

Domestic retail : 37.0%)

Billion Yen

17.81 Billion Yen

15.50 Billion Yenー(Composition ratio:11.6%)

Billion Yen

8.67 Billion Yen+1.7

86.03 Billion Yen(Composition ratio:50.6%)

36.34 Billion Yen

Domestic andothers*2(Composition ratio:10.5%)

Overseas*38.50 Billion Yen(Composition ratio:5.0%)(Composition ratio:6.5%)

29.28

2.31

Billion Yen

In-channel Growth Rate

41.7％

ー

34.0％

ー

+12.0%

12.9%

ー

+2.0%

8

EC Sales Results for FY Ending Feb. 2021

Domestically, strengthening was undertaken mainly
in-house.
Overseas, sales for MARGARET HOWELL, HUF and
TACTICS were strong, leading to increases, with YoY
sales reaching 118.3% (+6.8 billion yen)
In-house EC ratio is also strong at 43.9%.
Unit:Million Yen
FY Ending

FY EndingFeb. 2020Feb. 2021

36,337

40,681

112.0

21.4

30.3

+9.0pt11,442

17,872156.2

In-house EC ratio(％)

31.5

43.9

+12.4pt

Overseas E-Commerce

787

3,238

411.5

37,12443,919

118.3

21.8

32.8

+11.0pt

Domestic E-Commerce
Domestic E-Commerce ratio(％)
In-house EC

E-Commerce TOTAL
E-Commerce TOTAL ratio(%)

Y/Y (%)

In-house EC
Brands with high engagement made breakthroughs,
with in-house EC showing a strong trend at 156.2%
Brands that from the outset have a well-established trusting relationshipwith customers flourished greatly thanks to EC strengthening due to
Covid-19. The company’s retail staff started online customer services forfour brands (Laline, PEARLY GATES, ADORE and MARGARETHOWELL), with average conversion rate (CVR) reaching a lofty
performance of 18.4%.
Indeed, ETRE TOKYO, a direct to consumer (D2C) brand added to thecompany’s portfolio through M&A, also gained in strength.

Overseas EC
EC sales increased in overseas business
Acquired in an M&A deal in June of last year, TACTICS (consolidation
period June-December 2020) has contributed 2.15 billion yen in total. Of
that, EC sales occupy approximately 90% of the business structure, withthe brand setting a new record high and performing strongly, while YoY
reached 411.5%, a significant increase in sales.

9

About Differences from the Disclosure Plan

After the declaration of the state of emergency, the company posted a big loss in the 1st
half of the fiscal year, so while indicating a revised plan, they organized a profit
improvement project. And, as a result, the 2nd half saw improvements of 2 billion yen profit
related to sales recovery, 2.6 billion yen reduction in SG&A expenses and 1.4 billion yen
profit related to the sell off of business.
0❹❷1.3% improvement from disclosed plandue to purchase adjustment and sale
restraint❶

FY plan whenQ2 ended

17.8

ーSale of SPIC and DUN’ A DIX settled
by end of period.
Improved store costs and inventory
valuation.

FY results

1.52

+

Billion Yen

Athleisure and street
brands strong.
2nd half sales 102.5% of
disclosed plan

1.41

+

1.09

Billion Yen

5.96 Billion Yen

+

1.01

0.93

BillionYen

Billion Yen

Disclosed
plan oroperatingincomeGross profit
increased due toimproved sales in
2nd half

Billion Yen

Structure improvement project (TIP24)
implemented, reducing fixed costs throughrent negotiations, etc., and controlling
labor, strategic and sales promotion costs.

❸
Headquarters and functional
companies reduced labor andstrategic costs

Gross profit increase
due to improvementin gross profit margin
in 2nd half

Headquarters
and SG&A
expenses
reduced

Improvement to plan❺

Billion Yen

+
+

11.8

ー
Billion Yen

Costs reduced
due to sell offof business

Reduced SG&A
expenses forbusiness
divisionsOperating
Incomeresult10

Impact Items up to Current Net Income

The company posted 8.64 billion yen as an extraordinary loss for partial loss due toimpact of COVID-19, impairment loss, company reorganization costs, personnel
adjustments and restructuring costs. Conversely, we recorded extraordinary income of
24.8 billion yen, including 24 billion yen in gain on sales of real estate.
(1) Sale of fixed assets 24.02 billion yen(2) Sale of investment securities 0.36 billion yen(3) Employment adjustment subsidy 0.44 billion yen(Graph unit: 100 million yen)

* Employment adjustment subsidy is partially offset within
personnel expenses.

ー

86.4

Loss due to
Covid-19

248.5(1) Dividend income of 1.06 billion yen(2) Real estate income of 1.29 billion yen

19.9

ー

38.6

0

(1) Interest expense(2) Real estate costs

118.4

ー

210 million yen
87 million yen(1) Impairment loss*(2) Company consolidation loss(3) Voluntary retirement cost(4) Temporary leave loss

15.1

▲

30.0

3.06 billion yen
1.19 billion yen
1.16 billion yen
2.41 billion yen* Store loss of 2.86 billion yen, System 0.12 billion yen, Goodwill 0.06 billion yen

Operating Income

Non-operating
IncomeNon-operating
Expenses

Ordinary income ー10.36 billion yen

Extraordinary
IncomeExtraordinary
Loss

Pre-tax profit

5.86 billion yen

Corporate Tax
Adjustment

Current Net
IncomeCurrent net income 3.86 billion yen

11

About Consolidated Statement of Income

Even though the company has suffered thelargest operating income deficit ever, they
have been able to make strategic investments
ready for the future.

■ Net Sales
The company closed approximately 1,000 actual stores at
the time of the first COVID-19 emergency declaration, an
immense impact from the virus, with YoY at 78.8%.

■ Purchasing and Inventory

Unit:Million Yen
FY Ending Feb. 2020
Results

Composition
Rate (%)

FY Ending Feb. 2021
Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

170,068100.0

134,078

100.0-35,989

78.8

Gross Profit

89,382

52.6

63,84647.6-25,536

71.4

SG&A Expenses

89,31252.5

75,68956.5-13,62284.7

83,86349.3

71,15053.1-12,713

84.8

Goodwill Amortization

1,024

0.6

762

0.6

-261

74.5

Depreciation and Amortization

4,424

2.6

3,776

2.8

-647

85.4

Operating Income

70

0.0

-11,843-8.8-11,913-

Ordinary Income

1,851

1.1

-10,359-7.7-12,210-Extraordinary Income

6,289

3.7

24,85918.5

18,569395.2

Extraordinary Loss

4,281

2.5

8,644

6.4

4,363

201.9

Profit Before Taxes

3,859

2.3

5,855

4.4

1,995

151.7

Profit Attributable to Owners of Parent

2,181

1.3

3,861

2.9

1,679

177.0

EBITDA ※

5,518

3.2

-7,304-5.4-12,822-

SG&A Expenses(excl. Goodwill Amortization, Depreciation and Amortization)*EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

In the 1st half, the company struggled to curb purchasing
and exhaust inventory, recording a large loss on productvaluation. In the 2nd half, inventory at the end of the period
recovered to 84.9% from the previous period due tothorough review of ordering terms, restraint of purchases
and acceleration of inventory liquidation.

■ Income
Operating Income was -10.4 billion yen in 1st half, but in
2nd half, due to impact of increased profits of strong
businesses, such as HUF, PEARLY GATES, UNDEFEATED,TACTICS (acquired in M&A of previous period) and ETRETOKYO, as well as purchase restraint, inventory reduction,
expense restraint, and withdrawal cost compression,business is recovering. As a result, operating income
reached -11.8 billion yen, as opposed to the full-year
operating income of the disclosed plan of -17.8 billion yen.
Full-year current net income reached 3.8 billion yen thanks
to the company stabilizing the management base amidst
the impact of COVID-19 and having the foresight to sell realestate for strategic investment in the future.

12

About Consolidated Balance Sheet

While market trends remain tough, thefinancial structure of the company is stillrobust and sound.

■ About Assets

Unit:Million Yen
FY Ending Feb. 2020

Results
Current Assets

Composition
Rate (%)

Cumulative Q3RD 2021

FY Ending Feb. 2021

Ending Feb.
Results

Composition
Rate (%)

Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)

Q4/Q3

Q4/Q3 (%)

Change70,48144.0

70,67845.8

82,71453.0

12,234117.4

12,036117.0(of Cash and Deposits)

30,94319.3

28,131

18.2

49,871

32.0

18,928161.2

21,740177.3(of which, Inventory)

21,67913.5

23,823

15.4

18,40011.8-3,28084.9-5,424

77.2

89,84856.0

83,74554.2

73,37347.0-16,475

81.7-10,371

87.6(of Investment Securities)

26,121

16.3

26,37517.1

28,873

18.5

2,752

110.5

2,498

109.5

(of Investment Real estate)

16,642

10.4

16,430

10.6

4,980

3.2

-11,662

29.9-11,450

30.3

34,62921.6

48,72331.6

35,970

23.0

1,341

103.9

-12,753

73.8

92

0.1

14,817

9.6

152

0.1

60

164.8

-14,665

1.0

8,894

5.5

8,915

5.8

8,915

5.7

21

100.2

0

100.0

30,24818.9

25,296

16.4

22,68814.5-7,56075.0-2,60889.7

24,562

15.3

18,60412.0

16,082

10.3-8,48065.5-2,522

86.4

Total Net Assets

95,45259.5

80,40452.1

97,430

62.4

1,979

102.1

17,026

121.2

TOTAL Assets

160,329100.0

154,423100.0

156,088

100.0-4,241

97.4

1,665

101.1

Noncurrent Assets

Current Liabilities(of Short term Loans payable)(of Long-term loans payable within one year)

Noncurrent Liabilities(of Long term Loans payable)

Cash and deposits
An increase of 18.9 billion yen from previous year
means that for the time being the company will secure
visible funds, making firm investments once market
growth balance can be determined after the COVID-19
pandemic ends.
Inventory
Inventory reduced by 3.28 billion yen thanks tocurb on inventory, which has led to improved asset
efficiency.

■ About liability
loans
Short-term loans of 14.67 billion yen repaid in Q4.
COVID-19 special borrowing limit of 35 billion yen
is being maintained.

■ About Indicators
Things impacted by COVID-19
Debt-to-equity (D/E) ratio is 0.26 fold, but financial
soundness is being maintained at a capital
adequacy ratio of 62.6%.

13

Summary of Previous Period

A year dictated by COVID-19.
Learning from this emergency, the company spent the year
building the cornerstones of survival, whatever happens.
Breakeven point
reduction
Creating brands that customers will
support even in the Covid-19
pandemic

Preparing for future
investment• Halted business in unprofitable brands. Withdrew stores and cut labor costs.
• The company have integrated into one to eliminate waste and focus on creativity.
• Focused on memorable creativity, unwavering in the erratic markets of today.
• Raised awareness to take on new challenges that go beyond the company’s conventionalboundaries.
• Started supply chain management (SCM) reform to maximize digital capabilities.
• Sold 3 fixed assets to meet new demand for funds.

And…
To create an even stronger corporate structure, the company realized
the necessity of fully carrying out new reforms.

2

VISION

Striving to be thehappiest fashion company
in the world.
Becoming a company that createshappiness for our shareholders,customers, society and employees.

16

Mid-period Reform Project TIP24 Composition

For TIP24 to work, the company needs
to change approaches and customs
that have stood unaltered for 30 years.

TSI INNOVATION PROGRAM 2024
TIP24 differs fundamentally from transformations that involve conventional withdrawals (restructuring).
Instead, it is an innovation program that will change the “quality” of management and business.
Innovation in Creativity

Innovation in Profitability

Innovation towards
environment orientation◼ Creating new businesses, brands
and services through a fusion ofpeople (creativity) and digital(logic)◼ Improving quality of management
and productivity using digitaltransformation (DX)/data driven
methods◼ Making SCM reforms to flexibly
respond to change◼ Shifting to a business structurethat produces only the required
amount◼ Challenging to solve issues
through business

17

TSI INNOVATION PROGRAM 2024

We will keep changing.
Becoming a business entity that always survive.
“Survival = Generation of profit + Stakeholder happiness”

The happiest
fashioncompanyin the world

2023
Organizational integration
1st Phase completed

2022
2021

Growth and leap forward
Brands that can take on the world andspread into neighboring regions

2020

Investment in the future
Setup that nurtures personnel and business, EC,
digital shift and fresh investment

Painful innovation
Withdrawing from businesses, closing stores, reducing labor costs…

18

The Company's Invaluable Approach

Always thinking of new ways to do things“This means continual sketching of thenext scenario”

Enjoy change, make change ourally, and create a new sense of
ethics and value system.

Always rejecting the current situation“This means being relentless inbringing things to fruition”
Always able to admit failure“This means being aware of what is andisn’t feasible”

3

Full-year Consolidated
Business Plan for FY
Ending Feb. 2022

20 Profit and Loss Plan for FY Ending Feb. 2022

YoY of 113.7% for net sales of 152.4 billion yen (compared to 89.6% for the year before last)
SG&A expenses of 79.9 billion yen (composition ratio of 52.4%)
Considering that the impact of Covid-19 will linger to some extent, the company are planningfor operating income of 1.1 billion yen and current net income of 1.66 billion yen.

Net Sales
SG&A
Expenses
Operating
IncomeCurrent Net
IncomePlan for FY Ending Feb. 2022

FY Ending Feb. 2020

FY Ending Feb. 2021

170.06134.07

152.4

Billion Yen(YoY:103.1%)

Billion Yen

Billion Yen(YoY:78.8%)

89.31

75.68

Billion Yen

79.9

Billion Yen

Billion Yen

Billion Yen(Composition ratio:-4.0%)

1.1+12.94-%(Composition ratio: 52.5%) (Composition ratio:56.5%)

0.07
Billion Yen

11.84

ー

Billion Yen(YoY:113.7%)(Composition ratio: 52.4%)

Billion Yen(Profit margin: 0.0%)(Profit margin: -%)(Profit margin: 0.7%)

2.18

3.86

1.66

Billion Yen

Billion Yen

Billion Yen(Profit margin: 1.3%)(Profit margin:2.9%)(Profit margin: 1.1%)

Increase or Decrease+18.32Rate of Change+13.7％

Billion Yen

+4.21

+5.6％

Billion Yen

2.2ーBillion Yen

57.0%

ー

21

About Sales Amount Forecast (1st Half & 2nd Half)

In the 1st half of the fiscal year, as a conservative forecast that strongly
acknowledges the impact of COVID-19, the company forecasts an operating
income of -500 million yen, which is 87.1% of year on year before last sales.
Whereas, in the 2nd half, the outlook is for a steady recovery of the market,
so they are expecting sales to be in the black with operating income of 1.6
billion yen, which is 91.1% of year on year before last sales.
■ FY Ending Feb. 2022 Sales Trends(vs FY Ending Feb. 2020)

Net sales(Compared to FY Ending Feb. 2020)[%]

Operating Income[Units of 100 million yen]

100.0%

60❶ Initially planned budget

95.0%

90.0%

Q4
83.3%

50

40
➋ COVID-19 3rd & 4th waves
1st
half Interwoven into budget 2nd
half
上期
下期

85.0%

30

87.1%
87.1%

91.1%
91.9%

80.0%

❶

75.0%

➋ 1.6 Billion Yen

20

Operating income

❶

70.0%

10

0

➋ ‐500 Million Yen
Operating Income

65.0%

Acknowledging the advent of
3rd and 4th COVID-19 waves,the company revised Mar-Apr
sales forecast down by about
10%.
Sales forecastprior to 3rd
COVID-19 wave
YoY before last

91.9%
Full-year sales forecast(YoY before last)

89.6%(YoY：113.7%)
Full-year operating income
forecast-10

Q4 results

02/2021

for FY Ending Feb. 2021

1st half(03/2021-08/202)

08/2021

2nd half(09/2021-02/2022)

02/2022

1.1 Billion Yen

4

Future Growth Strategy

23[Innovation in Creativity] New Businesses and Brands

Bring together people, goods, capital, andinformation. Invest intensively in strategic
brands.

Priority brands for this period

Drastic transformation of not only merchandising
but also in creation itself

×

A concept of Fashion x Flower x Art for Spring 2021
A completely new digital curation EC media, hueLe Museum, launched!

24[Innovation in Creativity]
New Businesses and Services
High-profit stores spur on evolution

Push ahead with transformation to create
appealing stores.
Simultaneously boost the sales channel
shift to EC.
Amidst changing lifestyle trends, we will
redefine and overhaul the appeal required of
actual stores.
Further, we will thoroughly review rent, staff,
inventory volume, product content and statusof store losses to find ways to unceasingly
improve the profit structure.

Raise the appeal of existing stores,
and make every effort to open new
stores!
• Prime location strategy• Improving appeal via digital stores• Unified commerce
The real thrill of fashion is a great store in a good location with agreat selection of attention-grabbing products that fashionably
cool staff are confident about promoting – no more, no less!

Low-profit stores spur on the sales channel shift to EC
Use EC to communicate the appeal of brands.
Use EC to back up ability to earn.
• Shift customers over to EC• Make decision on withdrawing fromstores based on EC sales growth• Boost efforts to redirect customers fromstores to EC

25[Innovation in Creativity] New Businesses and Brands

Acquiring customers in new economic zone.
Expand the business of D2C conglomerates.
Looking to expand D2C business, the company acquired
ETRE TOKYO in FY02/2021, and it is contributing to groupresults from its initial year.

JUNNA (@junna total followers 180,000)
ETRA TOKYO Creative Directory
In all areas of fashion, but particularly apparel,
ETRE TOKYO is an influencer with a loyal fan basein the F2 generation (females between 35 and 49).

And, to further expand D2C business, the company will
introduce the new brand “MECRE” in this period.
Beginning to plan for other new brands
Boosting efforts to become a D2C conglomerate, the company
will not only pursue fashion business but also cosmetics, food& drink products, sports and other such business.

MAI (@im_5868 total followers 144,000)
MECRE creative director is not only getting noticed
as a next-generation influencer for apparel but also
cosmetics among the F1 generation (females
between 20 and 34).

26

[Innovation in Creativity] Enhancement of New Experiences, Services, and OMO Mechanisms

Create new experiences and innovative interaction withcustomers by making use of digital and sales staff capabilities.
Increase opportunities for sales staff to play active roles.
In addition to the appeal of products, use the appeal of people to turn customers into fans.

Unified Commerce Strategy (Store visit reservation via app)

Staff Commerce Strategy (Renewal of MIX. Tokyo)

As the 1st phase, the company will start introducing a setup where
customers can book in-store fittings from EC sites.
New devices, such as check-in stands (a next-generation
customer service solution), will be introduced in Q1.

Renew this as a specialized site for sales staff and coordinatingof clothes & accessories.
Increase opportunities for sales staff to also play active roles inonline situations, while at the same time commencing reforms
in the evaluation system.

28[Innovation in Profitability] Data Management and Advanced Supply Chain
Raise managing speed in order to respond to erratic markets.
Take initiatives to advance SCM via digitalization.
The company will constantly visualize the budgetary and achievement differences in people, things and money, in order toaccelerate activities for strategies and modifications. Also, they will tackle next-generation SCM in such a way that all
employees can share and utilize data and focus on high-value creative work.

Real-time Management

Speed Up Production & Logistics

Systemize indicators and forms throughout the company.
Enable quick and precise decision-making to establish a
corporate structure resilient in the face of change.

Management
DX

Forecast Market Demand
Forecast Sales Amount

Production
reformUniformly manage complex supply chain dataand improve accuracy of market launches using
just a small number of people.

Management
Layer

Marketing by Channel

Suitable
Products

Produce Samples in 3D

Utilize PLM system
Multidimensional Management Analysis
Retail Price Setting

Suitable
Quantity

Maximize Creative
Work & Income

Operating
Layer

Produce designs faster and in greater quantities.

Combine all the necessary data for the product, torealize a business scheme that is more efficient andis better equipped to respond.

Cost Price Structuring

Suitable
Price

Yield Controlling

PeopleThingsMoney

Bring Sophistication and Speed to Production
Use productivity theory to improve merchandizer accuracy by adopting
the ability to revise overall design in order to robustly cope withalterations to plans that emerge due to unforeseen circumstances.

Gross
Purchases
Product
Freshness
Sale
Restrictions

Inventory Turnover Rate

Suitable
PeriodProduct Evaluation
Cash Conversion Cycle

OnsiteLayer

Interlocking with
Production Sites (Plants)
Minimize costs and downtime by
selecting plant that can cope with work inquestion.

* Collaborating with TSI Sewing Yonezawa,
Miyazaki Plant and 3rd Party

Product Presentation using 3D CAD- Evolution of Manufacturing -Revising Speed and Expense of Introduction into Product Market

MANASTASH prototype Sample

ETRE TOKYO prototype Sample

30[Innovation towards Environmental Orientation]
Solving Social Issues Through Business❶ Pursue a sustainable manufacturing & sales model

Redesign the social value of theapparel industry✓Commercialize customized
services and product upcycles✓Change to environmentally friendly
materials for secondary materials
and shopping bags

❷ Solve issues through design✓Create new lifestyle value using
local resources and co-creation

Established TSI Sustainable Project Team
Reinvent the company to be one that can tackle social goals- starting with SDGs - and be the needed solution facet for social issues.

✓Create new worthwhile work byoffering designs to different
industries❸ Create culture and value Through design✓Create new culture throughinvestment in contemporary art business✓Launch new EC site where fashion,
flower and art coexist

[Innovation towards Environmental Orientation]
Solving Social Issues Through Business

31

Pursue sustainable manufacturing & sales model and recycling business for clothes
Tackle social goals through business as well as work to reduce the massive waste generated in the
fashion industry and tackle environmental issues.

⚫ Develop mechanisms to minimize waste•

Built up a customized
service utilizing thefactory in Yonezawa•

With the ReSew Shop as abase, the company
launched a repair &remake business⚫ Initiatives for decarbonized management
TSI’s commitment to environmental issues
Quantitative achievements in previous period••

200,000 products recycled/reused
Completion of changeover to environmentally friendly materials for
shopping bags

Quantitative achievements inthis period••

Changeover to environmentallyfriendly secondary materials (LOX,
etc.)
Changeover to reusable coathangers (100% changeover
expected in this period)32 [Innovation towards Environmental Orientation]

Solving Social Issues Through Business⚫ Lifestyle value
Create a playground where diverse cultures areborn by combining diverse regional assets with
TSI’s design & conceptual capabilities

Contribute to solving social
issues through the power ofdesignRegional revitalization x Design
Workstyle reform x Design

Planning to sign a comprehensive partnershipagreement with Kamikawa Town in Hokkaido
for the creation of culture
It’s all about knowing that fairs & festivals around the globe are fun

Regional resources × design and the conceptual capabilities to go half a stepahead = Creation of new playground⚫ Workstyle value
A project where the company once again review fashion & design prowess to find the uplifting feeling anddiverse power originally imparted by clothes, so that the appeal and vitality of workers can be brought into
being
Nishitetsu Air Service

Uniform Renewal Project

Collaboration of Nexus (a company that runs
Memorytree Nursery School) and nano universe

Uniform x New design = Solving issues relating to job satisfaction and workstyle33

About Future Financial Strategy

Strategically invest in digital methods and new businesses while focusing on management
stability.
In the current uncertain market environment, for the time being, the company will secure cash on hand and determine thebalance between the end of COVID-19 and growth, to guide them in investments that reflate existing business, vitalize new
business, digitize the company, streamline financial income and strengthen capital.

1. Improvement of Investment Efficiency and Optimal Capital Policy
Investment in new business

2 Billion Yen■ Generate new business (R&D
■ Alliances, etc. ■ M&A

Reinvestment in profitable assets

4 Billion Yen■ Reinvest in partially valid real estate■ Efficient securities

Investment for growth of existing business 5 Billion Yen•

Actual store investment (new, moved, remodeled)• EC growth strategy investment• Investment for efficiency in logistics

System investment• DX-driven productivity reform investment• Other system investment

1 Billion Yen
3.5 Billion Yen
500 Million Yen

5 Billion Yen■ Open stores in strong segments (golf, athleisure, cosmetics)■ Logistics infrastructure that can withstand EC expansion■ Further increase EC sales amount■ Introduce tools to bring efficiency to business■ Strengthen functions to achieve unified commerce■ Newly build or renew EC sites

2 . Improvement of Asset Efficiency
Compressing fixed assets and inventory■ Sell off of policy investment stocks, etc.
■ Inventory turnover period - 0.15 months

34

Shareholder Return Policy
The company plans to pay a dividend of 5 yen per share,taking into consideration the business results for the
fiscal year under review and the future businessenvironment.
Treasury stock

6,000

160.0

配当性向
Dividend ratio (%)

自己株式取得額
acquired

140.0

4,985

5,000

4,236

Unit: Million Yen

140.0

120.0

4,008

4,000
100.0

3,382
74.4

3,000

2,000

80.0

55.5

51.6

60.0

1,334

40.0

777

1,000

20.0

4,000,000
05,968,200

6,000,000

5,000,000

2,000,000

2,000,000

0.0
FY Ending Feb. FY Ending Feb.
2016.2期
2017.2期
2016
2017

Date
30/6/20

0.0

FY Ending Feb. FY Ending Feb. FY Ending Feb. FY Ending Feb.
2018.2期
2019.2期
2020.2期
2021.2期
2020
2018
2019
2021

Number of shares
10,000,000

Regarding retained earnings, thecompany will utilize them tostrengthen their financial position andstrategically invest in building a strong
business infrastructure.

Content
Disposition by cancellation

0.0

The company will continue to flexibly
consider and implement theacquisition of treasury shares.

35

In conclusion

TSI will evolve its business to regain trust.
And we will prove to the market and our stakeholders that TSI isa company that can evolve.

#believe in the power of fashion

Descriptions about future within this document are based on the information that the company obtains on the date of this report andcertain assumptions deemed to be reasonable. Actual earnings may differ materially from various future factors.

5

Reference Data

38

Highlights of Full-year Results for FY Ending Feb. 2021

Changes in monthly net sales■ YoY All Stores
Q1ST：Cumulative 50.6%

121.5%

124.8%

Q2ND：Cumulative 88.7%

Q3RD：Cumulative 93.1%
124.5%

123.1%
116.6%

Q4TH：Cumulative 83.3%
123.0%
109.2%

101.7%

102.9%

97.9%

93.5%

82.8%

84.3%

Cumul
累計
ative

eコマース
EC

114.8%

105.1%

99.5%

Real
実店舗
store

84.8%

83.1%

88.0%

87.2%

94.5%
67.0%

66.6%
84.9%
57.9%

74.9%

73.9%

79.0%

74.0%

79.0%

75.2%

43.3%
54.7%

33.7%

9.9%

Full year: Cumulative 75.9%, Actual stores 64.1%, EC 112.7%

20.9%

3月
3

4月
4

5月
5

6月
6

7月
7

8月
8

9月
9

10月
10

11月
11

12月
12

1月
1

2月
2

Real
store
実店舗

57.9%

9.9%

20.9%

84.9%

74.9%

73.9%

74.0%

94.5%

79.0%

75.2%

54.7%

79.0%

EC
eコマース

99.5%

121.5%

124.8%

123.1%

105.1%

116.6%

114.8%

124.5%

102.9%

123.0%

97.9%

109.2%

Cumulative
累計

66.6%

33.7%

43.3%

93.5%

82.8%

84.3%

83.1%

101.7%

84.8%

87.2%

67.0%

88.0%

39

Highlights of Full-year Results for FY Ending Feb. 2021

Domestic Monthly Sales Information

Q1• From April, some 1,000 stores nationwide closed• From March to April, delivery delays for China-made products• Logistics warehouses come under strain after state of
emergency declared in April• 29 days of leave compensation (100% compensation) granted toall employees
Q2• From June, stores reestablished themselves, but the situation
remained critical, especially in Tokyo metropolitan area, due toshortened business hours and stay-at-home consumers.
• Suburban stores and outlet malls did well.
• Strengthened digital customer service tools, such as “Hero©”.
Q3• It became apparent that there are even strong brands in the
midst of the pandemic, such as athleisure & street, capable ofincreasing sales and profits.
• Although sales dropped, profits increased YoY thanks toinventory and discount controls.
Q4• Late 2020 COVID-19 3rd wave significantly reduced the numberof customers.
• Promoted autumn and winter inventory stock• Spring products started to move from February.
FY 2020 Ending Feb.
All Stores：101.3%
Existing Stores ：95.6%

FY 2021 Ending Feb.
All Stores： 75.9%
Existing Stores：82.2%

40Highlights of Full-year Results for FY Ending Feb. 2021

Net Sales
Per Channel

FY Ending Feb. 2020

FY Ending Feb. 2021

Results

Composition

Results(Million yen)

Rate (%)(Million yen)

Y/Y (%)

Composition

Composition Rate

Rate (%)

Y/Y Change

Department Stores

21,393

12.6

12,481

58.3

9.3

-3.3

Commercial Facilities(*1)

86,02850.6

56,745

66.0

42.3

-8.3

In-house EC

11,442

6.7

17,871

156.2

13.3

6.6

3rd Party

24,89414.6

22,809

91.6

17.0

2.4

E-Commerce

36,336

21.4

40,681

112.0

30.3

9.0

Others(*2)

17,80910.5

15,504

87.1

11.6

1.1

Domestic

161,568

95.0

125,412

77.6

93.5

-1.5

E-Commerce

787

0.5

3,238

411.3

2.4

2.0

Overseas(*3)

8,499

5.0

8,666

102.0

6.5

1.5

E-Commerce TOTAL

37,12421.8

43,919

118.3

32.8

10.9

TOTAL

170,068100.0

134,078

78.8

100.0

-

*1 Fashion buildings, shopping centers, railroad station buildings, individual stores, outlet shops etc. except for department stores.
*2 Apparel businesses such as wholesale, intercompany sales and non-apparel businesses of the group companies.
*3 Results of Efuego Corp. which operates EC sites centering on Tactics.com in the U.S. is to be consolidated from the second

quarter of 2021 and onward. The results are recorded in overseas sales.

41

Highlights of Full-year Results for FY Ending Feb. 2021

ブランドの概況（通期）

Unit:Million Yen

Brands Overview

FY Ending Feb. 2020

Sales

Y/Y

FY Ending Feb. 2021

Composition

Gross Profit

Rate (%)

Ratio (%)

Sales

Composition

Gross Profit

Rate (%)

Ratio (%)

Sales (%)

Gross Profit
Ratio (pt)1.

nano・universe

27,18516.0

43.7

19,879

14.8

43.5

73.1

-0.2

2.

PEARLY GATES

12,805

7.5

50.2

12,502

9.3

52.4

97.6

+2.1

3.

NATURAL BEAUTY BASIC

15,191

8.9

57.5

10,677

8.0

49.3

70.3

-8.2

4.

MARGARET HOWELL

14,034

8.3

58.0

8,675

6.5

51.5

61.8

-6.5

5.

AVIREX

8,495

5.0

60.7

5,893

4.4

60.0

69.4

-0.7

6.

STUSSY

5,263

3.1

70.3

4,756

3.5

62.4

90.4

-7.9

7.

UNDEFEATED

4,791

2.8

43.3

4,432

3.3

37.5

92.5

-5.8

8.

HUF

4,678

2.8

46.0

4,180

3.1

46.1

89.4

+0.1

9.

ROSE BUD

5,949

3.5

48.5

3,804

2.8

41.2

64.0

-7.3

10.

PROPORTION BODY DRESSING

3,967

2.3

55.6

3,269

2.4

55.9

82.4

+0.3

TOP10

102,362

60.2

52.1

78,072

58.2

49.4

76.3

-2.7

Other Brands

65,51738.5

53.7

55,448

41.4

45.5

84.6

-8.2

Continuing Brands

167,880

98.7

52.7

133,521

99.6

47.8

79.5

-5.0

2,188

1.3

40.0

557

0.4

15.2

25.5

-24.8

170,068

100.0

52.6

134,078

100.0

47.6

78.8

-5.0

Closed Brands
TOTAL

42

Highlights of Q4 Results for FY Ending Feb. 2021

Consolidated Financial
Highlights -Profit and Loss(December to February)

Unit:Million Yen
Q4TH 2020 Ending Feb.
Results

Composition
Rate (%)

Q4TH 2021 Ending Feb.
Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

44,245100.0

36,858100.0-7,386

83.3

Gross Profit

20,85847.1

17,10546.4-3,752

82.0

SG&A Expenses

22,72851.4

20,67656.1-2,051

91.0

21,31548.2

19,45052.8-1,864

91.3

249

0.6

164

0.4

-85

65.8

1,163

2.6

1,061

2.9

-101

91.3

Operating Income-1,870-4.2-3,571-9.7-1,701-

Ordinary Income-1,461-3.3-3,346-9.1-1,885-Extraordinary Income

3,180

7.2

22,37360.7

19,193703.4

Extraordinary Loss

4,135

9.3

3,738

10.1

-397

90.4

Profit Before Taxes-2,416-5.5

15,28841.5

17,705-

Profit Attributable to Owners of Parent-2,639-6.0

14,98740.7

17,627

-

-457

-1.0

-2,345-6.4-1,887

512.7

SG&A Expenses(excl. Goodwill Amortization, Depreciation and Amortization)

Goodwill Amortization
Depreciation and Amortization

EBITDA ※*EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

43

Highlights of 2nd Half Results for FY Ending Feb. 2021

Consolidated Financial
Highlights -Profit and Loss(September to February)

Unit:Million Yen
Cumulative 2ND half2020 Ending Feb.
Results

Composition
Rate (%)

Cumulative 2ND half 2021 Ending Feb.

Results

Composition

Y/Y

Rate (%)

ChangeY/Y (%)Net Sales

88,220100.077,807100.0-10,41288.2

Gross Profit

45,473

51.5

39,67651.0-5,796

87.3

SG&A Expenses

45,23951.3

41,05052.8-4,18890.7

42,43748.1

36,56447.0-5,872

86.2

442

0.5

795

1.0

353

179.8

2,359

2.7

3,690

4.7

1,331

156.4

Operating Income

234

0.3

-1,374-1.8-1,608-

Ordinary Income

1,081

1.2

-716

-0.9

-1,798-Extraordinary Income

4,395

5.0

24,44031.4

20,044556.0

Extraordinary Loss

3,908

4.4

4,630

6.0

722

118.5

Profit Before Taxes

1,569

1.8

19,09324.5

17,5241216.9Profit Attributable to Owners of Parent

1,128

1.3

18,29523.5

17,166

1620.5

EBITDA ※

3,036

3.4

3,112

4.0

76

102.5

SG&A Expenses(excl. Goodwill Amortization, Depreciation and Amortization)

Goodwill Amortization
Depreciation and Amortization*EBITDA＝Operating Income + Goodwill Amortization + Depreciation and Amortization

44

Sales by Channel for FY Ending Feb. 2021

Changes in the number of stores and sales composition ratio by channelStores(of Stores)

Department Stores

E-Commerce

3,000
2,694

35

30.3

30

32.8

29.5

2,387

2,500

(%)

26.3
2,048

25

2,000

23.5

1,793

1,558
1,500

1,338
16.0

20.7

18…

20.8

1,229

21.4

18.6

15.3
1,164

1,000
7.2

10.1

20

1,074
12.6

15

924

11.8

9.3

10

8.9

500

5

0

0
FY Ending Feb.
2012

FY Ending Feb.
2013

FY Ending Feb.
2014

FY Ending Feb.
2015

FY Ending Feb.
2016

FY Ending Feb.
2017

FY Ending Feb.
2018

FY Ending Feb.
2019

FY Ending Feb.
2020

FY Ending Feb.
2021

*Sales composition by channel is not disclosed in FY Endling Feb. 2012

Domestic apparelstoresFrom about 2,700 stores immediately after business integration, the number of stores fell below 1,000
for the first time in FY02/2021 (previous period) due to restructuring to cope with changes in the market
environment.

Changes in sales
structure

Department store sales, which amounted to more than 30%, fell below 20% in FY02/2018 and less than
10% in the previous period, whereas EC net sales exceeded 20% in FY02/2019 and exceeded 30% in
the previous year.

45

Summary of Previous PeriodStore Distribution
FY Ending

Store

Store

FY EndingFeb. 2020 *1

Open

Close

Feb. 2021# of Stores

998

Change-23# of Stores

76

Change

-67

+85

-211

872

Domestic
-126
+9

-33

52

Overseas# of Stores

1,074

-24
+94

-244

924

Total
Change-90-150*1 Number indicated on "Change" rows are comparison with the end of 2019 Ending February.

46

Summary of Previous Period

Withdrawal of Business and Impact on Employment Coordination[Implementation Report]
Withdrawal
of stores

Reductionof staff

Withdrawal of 244
stores(Result)

Reduction of 747 staff*Including 351 from headquarters(Result)

Withdrawalof business

Withdrawal of 5 companies
and 7 businesses(Result)

47

Profit and Loss Plans for FY Ending Feb. 2022

Profit and Loss Plans for
1st Half & 2nd Half

Net Sales
SG&A
Expenses

Operating
IncomeCurrent Net
Income1st Half Plan

2nd Half Plan

71.3

81.1

Billion Yen

Billion Yen(YoY:126.7%)(YoY:104.2%)

38.5

41.4

Billion Yen

Billion Yen

79.90 Billion Yen(Composition ratio:54.0%)(Composition ratio:51.0%)(Composition ratio: 52.4%)

Full-year Plan

152.4 Billion Yen(YoY:113.7%)

ー0.5

1.6

Billion Yen

Billion Yen

1.1 Billion Yen(Profit margin: -%)(Profit margin: 2.0%)(Profit margin: 0.7%)

0.17

1.49

Billion Yen

Billion Yen(Profit margin: 0.2%)(Profit margin: 1.8%)

1.66 Billion Yen(Profit margin: 1.1%)

48

Disclaimer
Descriptions about future within this document are based on the information thatthe company obtains on the date of this report and certain assumptions deemed
to be reasonable. Actual earnings may differ materially from various future factors.