Results
Results

Briefing: Q3RD
of 2024 Ending

15th January 2024
Security code：3608(MarchFeb.

toNovember

2023)

AGENDA
1

Results Overview

2

About Business Situation by Channel

3

Brands Overview

4

Full-year Forecast

5

Initiatives in each area of TIP25

6

Initiatives for management that emphasizes human capital

7

Initiatives related to the SDGs

8

Reference Data

1

Results Overview

4

Q3RD Results of 2024 Ending Feb. : Executive summary[Summary of operations during the third quarter]■ Change in Market environment
Due to the reclassification of COVID-19 into Class 5 in May 2023, demand for outing recovered. With the subsequent lifting of the ban on group tours toJapan and depreciation of the yen, the number of visitors to Japan from overseas grew, recovering demand for inbound tourism substantially.
Although the overseas business environment remained unstable, economic and social activities in Japan moved toward normalization.

■ Business conditions
The recovery of the market supplied a favorable tailwind, boosting the number of customers who visited fashion buildings and street outlets in urban

areas.
The product policy for men’s brands bore fruit, and sufficient measures were taken for them in areas such as the bulk purchase of products that weremarketed over a long period of time, and therefore, the Company achieved steady growth without losing opportunities.
On the other hand, the Company was cautious about purchasing merchandise for ladies’ brands taking the previous circumstances into consideration,
and as a result, it failed to take actions that corresponded with the pace of market recovery. For this reason, it was unable to increase sales significantly.

■ Fallout from the loss of COVID-related special demand
The COVID-related special demand such as demand for golf in Japan and that for athletic leisure in the United States ran its course, and the market
began to decline.
Excessive inventories piled up because the placement of orders for the current term’s purchases and the delivery of wholesale products to clients had
been completed by the previous term. This significantly affected financial results partly because the Company had actively invested in the growth areas in
the previous years.

5Highlights of Results for Q3RD of Fiscal Year Ending in February 2024

In addition to the fallout from the loss of the COVID-related special demand, the initial marketing of autumn/winter merchandise did not advance as
initially planned because of the lingering summer heat and the warm winter, and as a result, the Company struggled.
The Company aimed at recovery starting from the second half of October but failed to achieve the quarterly plan.
Operating income was lower than initially planned for two reasons. One was that the Company reported greater valuation losses than initially planned
due to excessive inventories. The other was that profitability deteriorated as the Company gave priority to inventory clearance.

Q3RD Net Sales

Q3RD Operating Profit

Q3RD Net Income

41.57 Billion Yen

1.69 Billion Yen

1.81 Billion Yen

vs. Budget－4.61 billion yen
YoY Change －1.73 billion yen
YoY 96.0%

vs. Budget－1.94 billion yen
YoY Change －1.44 billion yen
YoY 53.9%

YoY Change
YoY－0.55 billion yen

76.7%

6 Highlights of Results for Q3RD of Fiscal Year Ending in February 2024

Q3RD

300

Gross Profit

250

56.0%

> Gross Profit

Gross Profit

UNIT: Billion yen

58.0%
55.1%

56.9%

56.2%

200

23.36

Billion Yen

YoY 94.8%
YoY Change －1.27 Billion Yen

150
100

50.0%

246

227

226

234

0
2021 Ending
21年2月期Feb.

2022 Ending
22年2月期Feb.

2023 Ending
23年2月期
Feb.

51.2%
200

2024 Ending
24年2月期Feb.

Gross Profit Margin
売上総利益率

49.8%

47.6%

49.6%

⇒ The struggle for sales growth and slowmoving inventories became a heavy burden
on the Company.
Gross profit became worse by 0.7 percentage
points compared to the previous term.

> SG&A Expenses

SG&A Expenses

250• Foreign exchange fluctuations and sharp risesin the prices of raw materials• Increase in price reductions due to growth inremaining inventories and increase in valuation
loss

40.0%

30.0%
2020 Ending
20年2月期
Feb.

UNIT:Billion yen

21.66

246

50

Gross Profit
売上総利益

Q3RD
SG&A Expenses

60.0%

52.1%

60.0%
50.0%

• Due to subsidies, personnel expenses forthe previous term decreased.
• Growth in sales promotion and advertisingexpenses

150

Billion Yen

YoY 100.8%
YoY Change －0.17 Billion Yen

100

225

204

187

215

217

40.0%

30.0%

50
0

20.0%
2020 Ending
20年2月期Feb.

2021 Ending
21年2月期Feb.

2022 Ending
22年2月期
Feb.

SG&A
販管費
Expenses

2023 Ending
23年2月期Feb.

2024 Ending
24年2月期
Feb.
SG&A Expenses
販管費率
Rate

⇒ During the previous term, personnel
expenses improved due to subsidies, and in
this quarter, the Company failed to manage
sales promotion and advertising expenses
efficiently. For these two reasons, selling,
general & administrative expenses
deteriorated by 2.5 percentage points
compared to the previous term.

7

Net Income Impact Items for Q3RD Results of 2024 Ending Feb.

Ordinary income, including ¥340 million in non-operating income/loss such as dividend income and real estate revenue,was ¥2.03 billion.
Net income for the first half of the term, including ¥520 million in extraordinary income/loss such as gains on sale of investment
securities and impairment losses as well as income taxes deferred, was ¥1.81 billion, and the profit ratio was 4.4%.
・ Gain on sales of investment securities 0.88 billion yen

・ Dividend income 0.06 billion yen
・ Real estate income 0.09 billion yen- 0.380.91

billion yen- 0.74billion yen- 0.06 billion yen

billion yen

0.41 billion yen
1.69 billion yen

・ Interest expenses 0.01 billion yen
・ Expenses on real estate 0.01 billion yen

・ Impairment loss 0.27 billion yen

1.81
billion yen

Operating profit
margin 4.1%

OperatingincomeNet profit margin
Ratio 4.4%

Non-operating
incomeNon-operating
expenses

Ordinary Income
2.03 Billion yen

Extraordinary
incomeExtraordinaryloss

Profit Before Taxes
2.56 Billion yen

Income taxes
deferred

Net income
attributable to ownersof parent

Net income
1.81 Billion yen

8About Balance Sheet> Cash and Deposits【 Comparison with the previous term 】
Cumulative Q3RD 2023
Ending Feb.
Composition
Rate (% )Results

1ST Half 2024 Ending
Feb.
Composition
Rate (% )Results

Results

Composition
Rate (% )Y/YChange80,80555.4%

67,56650.9%

74,49953.4%-6,306(of Cash and Deposits)

32,13922.0%

24,66018.6%

23,111

16.6%(of which, Inventory)

28,28019.4%

27,79220.9%

32,75323.5%

65,155

44.6%

65,11349.1%

65,091(of Investment Securities)

28,122

19.3%

27,79220.9%(of Investment Real estate)

4,713

3.2%

4,695

145,961

100.0%

32,05922.0%

Current Assets

Non-current Assets

Total Assets
Current Liabilities

Affected by increases in inventory assets and therepayment of Long-term borrowings totaling , cash
and deposits decreased by ¥9 billion.

Cumulative Q3RD 2024 Ending Feb.

Y/Y (%)

Q2/Q3
ChangeQ2/Q3 (%)

92.2%

6,933

-9,02871.9%-1,549

93.7%

4,473

115.8%

4,961

117.9%

46.6%

-64

99.9%

-22

100.0%

27,944

20.0%

-178

99.4%

152

100.5%

3.5%

4,688

3.4%

-25

99.5%

-7

99.9%

132,679

100.0%

139,591

100.0%-6,370

95.6%

6,911

105.2%

23,96318.1%

32,34223.2%

283

100.9%

8,379

135.0%

110.3%

17

0.0%

-

0.0%

5,045

3.6%

5,028

29676.5%

5,045

0.0%

4,987

3.4%

4,203

3.2%

3,853

2.8%

-1,134

77.3%

-350

91.7%

12,177

8.3%

9,435

7.1%

8,807

6.3%

-3,370

72.3%

-628

93.3%

6,478

4.4%

3,047

2.3%

2,562

1.8%

-3,916

39.5%

-485

84.1%

Total Liabilities

44,23630.3%

33,39925.2%

41,14929.5%-3,087

93.0%

7,751

123.2%

Total Net Assets

101,724

69.7%

99,28074.8%

98,441

70.5%-3,283

96.8%

-839

99.2%

-5,388-3.7%-4,537-3.4%-5,604

-4.0%

-216

104.0%-1,067123.5%

145,961

100.0%

132,679

100.0%

139,591

100.0%-6,370

95.6%

6,912

105.2%(of Short-term borrowings)(of Current portion of long-term borrowings)

Non-current Liabilities(of Long-term borrowings)(of Treasury Stock(-))
Total Liabilities and Net Assets> Inventory【 Comparison with the previous term 】
In the businesses that performed well, bulk
purchasing was implemented to reduce costs. In
some businesses, meanwhile, inventories moved
slowly because sales slowed down due to thelingering summer heat and the warm winter.
Inventory assets were 115.8% of the previous
term’s level, growing by ¥4.4 billion from theprevious term.

> Treasury stock【 Comparison with the previous term 】
As part of its efforts to implement capital policy
and take measures for shareholder returns, thecompany continued to acquire treasury stock. The
value of the treasury stock increased by ¥1.06
billion.

２

About Business Situation by Channel

10Sale Trends by Channel for Q3RD Results of 2024 Ending Feb.

The number of customers who visited real stores rose as demand for outing and inbound tourism grew. Sales for non-department stores were 102.9% of theprevious term’s level.
On the other hand, sales for department stores, EC, and overseas businesses faced difficulties due to the fallout from the loss of COVID-related special demand
and withdrawals from business.
• Real stores: While sales for street outlets and fashion buildings continued to expand, benefiting from the recovery of the traffic of people, those for department stores leveled
off as demand for golf ran its course. Sales for real stores were 101.2％ of the previous term’s level.
• Overseas business: The overall street industry in the U.S. remained sluggish. In particular, sales for HUF stagnated as its clients refrained from ordering merchandise due toDomestic

increased inventories.

Department
StoresCommercial
Facilities(*1)
E-Commerce

Domestic Others(*2)
Overseas

New profit standards

Old profit standards

New profit standards

Q3RD2022 Ending Feb.

Q3RD
2023Ending Feb.

Q3RD
2024 Ending Feb.

YoY (%)

4.22 Billion Yen

5.64 Billion Yen

5.40 Billion Yen(Composition Rate ：10.8%)(Composition Rate ：13.0%)(Composition Rate ：13.0%)

95.7％

17.59 Billion Yen

18.55 Billion Yen

19.09 Billion Yen(Composition Rate ：42.8%)(Composition Rate ：45.9%)

10.31 Billion Yen

8.97 Billion Yen(Composition Rate ： 44.9%)

9.60

Billion Yen(Domestic E-Commerce ratio ：30.6%)(Domestic E-Commerce ratio ：29.9%)（ Domestic E-Commerce ratio ：26.8%）

Billion Yen(Composition Rate ：12.2%)

4.77 Billion Yen

4.53 Billion Yen(Composition Rate ：11.0%)(Composition Rate ：10.9%)

2.94 Billion Yen

4.02 Billion Yen

3.56 Billion Yen

4.79(Composition Rate ：7.5%)(Composition Rate ：9.3%)(Composition Rate ：8.6%)*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.

102.9％
87.0％
95.2%
88.4%

11

E-commerce in Q3RD Results of 2024 Ending Feb.
In the third quarter alone, with EC sales at ¥9.88 billion, or 87.5% of the previous term’s level, the Company failed to expand sales
in this sector, leaving certain issues unsolved.
The Company will review its sales strategy and digital marketing methods again with the aim of expanding sales again while
maintaining profitability.
Domestic EC: In TSI’s EC, popular products were in short supply as real stores attracted more customers and inventories were consequently concentrated, andthis reduced EC sales substantially. Partly because of the fallout from the loss of COVID-related special demand and withdrawals from business*1, the overall
domestic EC sales were 87.0% of the previous term’s level.
Overseas EC: Affected by discount sales which prevailed due to excessive inventories in America’s street industry, overseas EC sales slowed down, remaining at
92.4% of the previous term’s level.
Old profit
standards

Unit : Billion Yen

New profit standards

Plan across the brands

Q3RD 2022
Ending Feb.

Q3RD 2023
Ending Feb.

Q3RD 2024
Ending Feb.

Compared to year
before last (%)

In-House E-Commerce

4.33

4.51

3.59

82.8%

79.6%

(ratio(%))(45.2%)(43.7%)(40.0%)(-5.1pt)(-3.7pt)

Domestic E-Commerce

9.60

10.31

8.97

93.4%

87.0%

(ratio(%))*(30.6%)(29.9%)(26.8%)(-3.8pt)(-3.1pt)

Overseas E-Commerce

0.76

0.97

0.90

117.7%

92.4%(ratio(%))*(26.1%)(24.3%)(25.4%)(-0.7pt)(+1.1pt)

E-Commerce TOTAL

10.37

11.29

9.88

95.2%

87.5%

(ratio(%))*(30.2%)(29.3%)(26.7%)(-3.5pt)(-2.6pt)

Y/Y(%)*1 The amount of EC sales shrank due to the effects of withdrawal from the ”BOSCH” business and the termination of agency contracts
for “SUNSPEL” and “UNDEFEATED” (¥0.61 billion)*2 Domestic E‐Commerce ratio excluding domestic and other sales (wholesale, company sales, etc.)

In this plan, at TSI’s EC site “MIX.Tokyo,” three athletes
wore fashionable clothes different from those which theyusually did, presenting a new aspect of their fashion life. The
Company will continue to carry out plans to convey thepower and joy of fashion to customers.

３

Brands Overview

Individual Overview of Major Brands in Q3RD Results of 2024 Ending Feb.

13

Due to the effects of the lingering summer heat and the warm winter, most of the major brands
struggled, but among them, sales for MARGARET HOWELL, AVIREX, and STUSSY continued to bestrong.
Other than the major brands, brands focusing on street outlets (such as ROYAL FLASH and Schott)benefited from growing inbound tourism and the recovery of the traffic of people, continuing to grow.
Unit:Million Yen■ Top 10 brands in sales

Q3RD 2022
Q3RD 2023 Ending Feb. Q3RD 2024 Ending Feb.
Ending Feb.

Y/Y

Composition
Rate (% )Composition
Rate (% )Sales (%)

Sales

Sales

Sales

1.

PEARLY GATES

4,668

5,060

11.7

4,106

9.9

81.2

2.

MARGARET HOWELL

3,016

3,521

8.1

3,670

8.8

104.2

3.

NANO universe

4,853

4,143

9.6

3,859

9.3

93.1

4.

NATURAL BEAUTY BASIC

2,897

3,056

7.1

3,010

7.2

98.5

5.

HUF

1,891

3,058

7.1

2,657

6.4

86.9

6.

AVIREX

1,767

2,043

4.7

2,246

5.4

109.9

7.

STUSSY

1,280

1,295

3.0

1,424

3.4

110.0

8.

new balance golf

1,051

1,331

3.1

1,232

3.0

92.5

9.

human woman

900

1,218

2.8

1,120

2.7

91.9

10.

Jack Bunny!!

926

1,031

2.4

965

2.3

93.5

23,25425,761

59.5

24,293

58.4

94.3

TOP10

・PEARLY GATES YoY：81.2%
The market normalized as demand for golf ran its course.
Sales continued to grow, reaching 125.0% of the pre-COVID
level (term ended February 2020), but went below those for theprevious year.
The brand is going to reduce purchasing and continue inventory
clearance, including overseas sales.

・ HUF

YoY：86.9％

Domestic real stores achieved two-digit sales growth, at 118.9%of the previous term’s level, but the brand struggled as sales forthe overall street industry in the U.S. remained sluggish.
As a result, the overall sales for HUF went below those for theprevious year.

・AVIREX

YoY：109.9％

In addition to expanding sales for regular items, collaborations
with MLB and Disney were well received, maintaining strong
sales. Its store opened at the Komatsu Base aviation festival andthe Inazuma Festival 2023 also ended as they gained publicfavor.

・STUSSY

YoY：110.0％

The number of stores decreased, but the existing stores madeup for more than the loss of sales for closed stores, improving
sales per store significantly.

４

About Full-year Forecast

15 Recent situation (cumulative results for the third quarter)

Cumulative Q3RDNet Sales

114.85
vs. Budget
YoY Change

Billion Yen

Cumulative Q3RD
Operating Profit

2.22

Changes in sales during the term ending February 2024
(compared to the initial budget)
Third quarter

Billion Yen

105.0%

100.0%－6.33 billion yen

vs. Budget－2.41 billion yen－0.54 billion yen

YoY Change－1.50 billion yen
95.0%

The Company aimed at recovery during the second half ofthe year and thereafter but was forced to struggle◼

◼

The recovery measures announced at the end of the first half of the year fell through.
⇒ The Company failed to expand EC sales.
⇒ The Company expected to recover sales in the autumn/winter sales campaign but
was not able to reduce its inventories.
⇒ The Company’s actions such as expanding the purchasing of merchandise forbrands that performed well were too late.
The initiatives for executing budgets and implementing the medium-term plan both did
not make much progress.
⇒ During the second term, the Company expected that it could put its performanceback on track within the current term.
⇒ Financial results became even worse during the third quarter, and the Company
will take further steps for drastic reforms. (described later)

90.0%

85.0%

Affected by domestic wholesale sales
reported months later and decreases
in overseas wholesale sales

80.0%

Recovery to aconsiderably highlevel of sales was
not achieved

75.0%

2023.3 2023.4 2023.5 2023.6 2023.7 2023.8 2023.9 2023.1 2023.11

Results

Recovery plan

16

Revision of forecasts of financial results for the entire term ending February 2024

Following the consolidated cumulative financial results for the third quarter, we hereby announce that we
decided to revise the forecasts of consolidated financial results for the entire term ending February 2024,
which were published on April 12, 2023, as follows:
Forecasts for the entire
term ending February 2024

Unit
Billion Yen

Composition
Rate
（％）

Adjusted Forecast

Unit
Billion Yen

Composition
Increase /decrease amountRate
Billion Yen（％）

Rate ofchange（％）

162.00100.0

154.40

100.0

－7.60

－4.6

Operating Income

4.70

2.9

1.40

0.9

－3.30

－70.2

Ordinary Income

5.50

3.4

3.00

1.9

－2.50

－45.4

Profit Attributable to
Owners of Parent

3.50

2.2

2.80

1.8

－0.70

－20.0

Net income per share

41.54 Yen

Net Sales

34.06 Yen

The golf market, which had driven the performance of the Company until last year, and the growth of the street casualmarket in the United States settled down, and in addition, excessive inventories due to focused brands’ failure to achievesales goals prompted the Company to reduce prices more often and increased valuation losses, and this deteriorated
profitability, leading to the revision of the forecasts for the whole year.

Current challenges and response policy

17

Current challenges
Basic profitability has not been improved
•
•
•
•
•

As an OMO company, TSI Holdings has brought certain
results, but its EC sales has fallen.
Store efficiency improvement measures remain at the level ofreorganizing nonperforming outlets.
The U.S. business remains sluggish.
It seems that the golf business has peaked out.
Inventory efficiency deteriorated, making the adverse effects of
discount sales and valuation losses evident.

Response policy
Review of the plan
The management plan with capital costs and stock prices taken into account,which is to be announced in April, should be updated. This includes updating
the numerical goals and reviewing business strategy and others based on therecognition of current challenges. This will be published as a rolling plan forthe medium-term management plan (TIP25).

▶ Examples of major points at issue
Improvement of profitability of existing businesses
・Making selling, general & administrative expenses more efficient byimproving the profit structure of stores and EC
・Improving gross profit by maintaining inventories at reasonable levels
and taking other measures for tighter manufacturing and sales control

Growth strategy

Commitment to investment policy and numerical goals•••

Lack of the ability to promote investment measures in growth
areas
Lack of speed to take measures to achieve greater efficiency
in the digital area
The introduction of several new brands is progressing, but
profitability has not been achieved yet.

・Restructuring aimed at achieving EC/OMO growth again
・Redefining growth areas and setting quantitative goals for investment
performanceStrengthening the operational foundation
・Strengthening and making effective use of human capital・Evolving profit management methods and KPIs
・Promoting reform projects making the most of external specialist
teams

18

Shareholder returns※2

The amount of dividend for the term ending February 2024 will remain at the same level as
previously forecast, at ¥15 per share.

1

配当金
Dividends
１株あたり配当金
15

15
0.8

Dividend payout ratio
配当性向(Consolidated)

44%

10

10

28%

0.6

42.9％

0.4

5

5

0.2

0
0

0

Dividend
Payout ratio

FY Ending Feb.
2021年2月期

FY Ending Feb.
2022年2月期

FY Ending Feb.
2023年2月期

2021

2022

2023

Plan for2024年2月期
FY
Ending Feb.
2024
予想

¥0
-

¥5
44%

¥10
28%

¥15
42.9%

５

Initiatives in each area of TIP25

20

TSI Holdings Group’s medium-term management plan “TIP25”
Announced on April 14, 2022 Medium-term management plan materials reposted

H e n c e , t o l e a p t o w a r d 2 0 2 5 , w e h a ve u p d a t e d T I P 2 4 ,t o t u r n i t i n t o t h e T S I I n n o va t i o n P r o g r a m 2 0 2 5 ( T I P 2 5 ) .

TIP25 formulation policy

1

2

3

Align the direction of
Capture changes in thesocial environment andmarket to express andembody our existence
and purposethe entire company withthe direction ofbusiness domains todevelop business in
new growth domains

Achieve sufficiency indigital engagement,
ESGs and high profit,
all areas that the stock
market holds dear

21

TIP25 4Div.(domains)
Announced on April 14, 2022 Medium-term management plan materials reposted

1

Wellness & LifestyleWellness & lifestyle

AthleisureOutdoor

L i fe s t y l eCreate fashionentertainmentthat has a positiveon the healthand happinessof consumers and,extension,

impactStreet & culture

StreetCultureSelectbysociety.

Fashion Capital3

Nurture street culture andcreate fashionentertainment that brings
positivity to society andDigital Generation

Digital generation

values of brands andGen-Z
Fa s h i o ncreate fashion

D2C/F2C

entertainment centered on

DigitalFa s h i o n

Refine the experiencehighly refined tastes.

2

the environment.

Fashion capital

L a d y ’s
Fa s h i o nStreet & Culture

Create fashionentertainment for thedigital native generation
via digital x fashion.

4

22

TIP25 4Div.(domains) / (Brand layout diagram)1

Wellness & LifestyleWellness & Lifestyle Div.
1.
2.
3.
4.
5.
6.
7.
8.
9.

PEARLY GATESPGGMASTER BUNNY EDITIONJack Bunny!!
St ANDREWS
PING
new balance golf
NBB WEEKENDMARGARET HOWELL

Street & Culture Div.
10.
11.
12.
13.
14.
15.
16.
17.
18.

MHL.
Dice&Dice
SEVEN BY SEVEN
quitanand wanderYLÈVE
THE LIBRARY
LalineUrth Caffé

Fashion Capital Div.
Apuweiser-riche
JUSGLITTY
Rirandture
Mystrada
CADUNÉ
Arpege story
NATURAL BEAUTY BASIC

1.
2.
3.
4.
5.
6.
7.
8.

3

Fashion Capital

1.
2.
3.
4.
5.
6.
7.

2

Street & CultureSTÜSSY
HUF
UNION
BAIT
FIGURE
Forget-me-nots
AVIREX
Schott

9.
10.
11.
12.
13.
14.
15.
16.

B’2nd
BEAVERLHP
ROYAL FLASHGARDEN (吾亦紅)MANASTASH
Resew
NANO universe

4

Digital Generation
Digital Generation Div.

8.
9.
10.
11.
12.
13.

N.
PROPORTION BODY
DRESSING
ADORE
human woman
LE PHILPINKY&DIANNE

1.
2.
3.
4.
5.

ETRÉ TOKYOMECRE
CHAROL
FREE’S MART
bobe

6.
7.
8.
9.
10.

JILL STUARTJILL by JILL STUARTROSE BUD
hueLe Museum
STUMBLY23

Initiatives in each area of domains

Wellness & Lifestyle

Street & Culture

Creating attractive communities

Platform for play rooted in the street spirit¥36,618 million

Net sales

Yo Y c h a n g e¥36.61

100.3

Billion

％

32.4%
売上高
Ratio
to
total
構成比
sales

Making the most of the technology cultivated in the golf area in various ways

Net sales

Yo Y c h a n g e¥40.86

98.4

Billion

％

売上高
Ratio
to
構成比
total
sales

35.6%

L.H.P’s collaboration across the boundaries of categories
L.H.P collaborated with the organizers of anevent for a game that was extremely popular
mainly among youths. In the center plan “TOKYOesports COLLECTION,” performers who wore thecostume of Danke Schön, a brand offered by
L.H.P, adorned the runway.

PEARLY GATES is developing snow wear, whichmakes the most of the technology and design thathave been cultivated over the years in the golf area.
In January 2024, the brand concluded a wear contract
with Ms. Miyabi Onitsuka, a professional snowboarder.

PGG, a sports & lifestyle wear brand, also enteredinto an agreement with Ms. Onitsuka. It will support
her to lead a stylish and comfortable life even in nonathletic scenes.

¥40,866 million▲Ms. Miyabi Onitsuka, aprofessional snowboarderWith “play,” the concept of Div.,
as its keyword, the brand willcontinue to communicate thejoy and attraction of fashion
from new angles.

▲ A full array of gorgeous
guests, including entertainers
and artists, lined up in the
event

24

Initiatives in each area of domains

Fashion Capital

Digital Generation

Services that respond constantly to market trends

Continuously expanding content to win over the next

and changes

generation of customers¥26,585 million

Net sales

Yo Y c h a n g e¥26.58

102.5

Billion

％

23.6%
売上高to
Ratio
total
sales
構成比

¥8,916 million

Net sales

Yo Y c h a n g e

¥8.91

95.3

Billion％ADORE offers coats that use environmentally conscious new materials

bobe launches a new beauty brand

ADORE recently started to offer coats
made of the artificial protein fiber
material “Brewed Protein™” developedby Spiber Inc.

bobe launched a new beauty brand in collaboration with
MAI, a creative director at MECRE.
Under the concept “Momentum, curiosity, brilliance, andnarrative,” the brand developed new skincare and cosmetic
items that focused on fermentation.

▲ The photos show the processes of
producing Brewed Protein™ fibers

ADORE attempted to use new materials tocreate uncolored coats which symbolized thebrand. After the three years of development
efforts since 2020, it launched coats using
Brewed Protein™ fibers for the first time in theworld.

Since November, bobe has set up pop-up
booths at the Isetan Shinjuku, Hankyu
Umeda, and Nagoya Takashimaya
department stores. It will continue to offer
the products to a wider range of customers
as their recognition level rises.

8.0%
Ratio
売上高to
total
sales
構成比

▲ All these products pay attention to theenvironment as typified by the use of
upcycled raw materials as well as
materials from developing countries

25

Promoting DX to lead the next generation of businessIn an effort to make business processes more efficient and sophisticated, accelerate the pace of business, and achieve further
growth and development, TSI Holdings has tied up with several businesses to advance projects in multiple areas.

Becoming the first company in Japan to introduce
Alibaba Cloud smart logistic solutions

Starting the PoC verification process using SQ, a mission-critical system for major
retailers, which is provided by Stack Inc.

Aiming at innovation in DX and customer experience, the Company
decided to participate in the Alibaba Cloud DX Lab for strategic
alliance.

TSI Holdings started the PoC verification process using the SQ beta version, which was released by
Stack Inc.

In addition, based on the strategic alliance between the twocompanies, TSI Holdings introduced Alibaba Cloud’s warehousemanagement system into cross-dock warehouses in Shanghai andannexed ones in Japan as well as warehouses in Vietnam. Thisinitiative enables real-time confirmation of inventories.
While applying the system to several other logistic bases, theCompany will continue to build business processes and systems for
greater operational efficiency, which involves the use of AI for levelingoff workload and better inventory control by predicting the volume ofcargo.

In October 2022, the Company concluded a capital and business alliance contract with Stack in order torealize a next-generation OMO mission-critical platform based on a new concept which enabled it torespond flexibly and swiftly to changing customer services.
As part of this contract, this PoC
process involves verification of the
future applicability of SQ and thescope of its application in conjunction
with the introduction of Shopify bysome of the Company’s brands.

SQ

TERRA

Mission-critical SaaS system provided by Stack

TSI mission-critical system

SQ provides basic functions needed for business expansion,
analysis platforms, API, and other systems in a single package.
SQ is connected to Shopify and TERRA.
AnalysisPrincipal functions
offered by existing
mission-critical systems

Inventory

Native support
by SQ

Store front
Customer

Order

Merchandise▲ The conceptual diagram of the PoC process

Accounting

Finance26

Launching the testing of corporate product experience in the virtual space of
the Japan Metaverse Economic Zone “Ryugukoku®”
The Company participated in the Ryugukoku® project as a
fashion entertainment company to design new customer
experience.

Illustration of 3D costume provided by TSI

The world of Ryugukoku®, the RPG/Metaverse platform,
enables use of various real products provided bybusinesses in the image of play.
The Company offers 3D costume worn by avatars, aiming
to provide entertainment value brought by fashion.

The Company provides three-dimensional AVIREX, PEARLY GATES, Jack Bunny!!, NANO
universe, human woman, and JILL by JILL STUART clothes to be worn by avatars

27

Putting a provider of SaaS recruitment services specializing in apparelbusiness under the control of the TSI Holdings Group
Services

The Company plans to put READY TO FASHION Inc. (representative: Satoshi
Takano), which operates SaaS recruitment services specializing in apparelbusiness, under the control of the TSI Group in March 2024.
Company nameREADY TO FASHION. Inc.

Address

THE N3 502, 4-12 Aobadai 4-chome,
Meguro-ku, Tokyo

Social media for jobs in the fashion industry
Recruitment platform to seek jobs by registering
Instagram postings and skills
READY TO FASHION

Establishment

November 8, 2016

Representative

Representative director: Satoshi Takano

webMedia that carry news and information
on events and recruitment for young
people interested in the fashion industry
READY TO FASHION MAG
web

Business
description

Planning for and operation of social media
recruitment platforms as well as media andevents in the fashion industry

Real communities organized by more than
20 fashion circles existing in the Kanto andKansai regions

Business overview
fashion community 1.0
community

READY TO FASHION not only adopts the conventional style of registering those
who wish to change jobs but also easily brings vertical connections to businesses
by linking social media, owned media, apps, and real events. It also provides
horizontal connections to make it easy to offer jobs to those who wish to change
jobs. The company thus has established and operated approaches to recruitment
not found in the past.

Matching service to create “businessmeetings,” enabling users to connectloosely to people in the fashion industry
and those who wish to involve themselvesin the industry
fatch
ios app, web

28Providing comprehensive personnel solutions in the fashion industry
The TSI Holdings Group aims at creating opportunities
for diverse human resources to play an active role in the
fashion industry and enriching the lives of people whowork in the fashion industry and those who enjoy fashion.
By linking personnel support services provided by S-Groove, asubsidiary engaged in pay job placement and manpower dispatching
services, and READY TO FASHION's unique recruitment services, theTSI Holdings Group strives to expand its HR services, increase theprofitability of the two subsidiaries, and develop these services into oneof the pillars in the Group’s businesses.

Group

Past
300 companies

1,000 companies in total

Clients

Clients

RequestProvision

RequestS-GROOVE ×

S-GROOVE
Recruitment

Dispatch/agency
Recruitment

×

FutureApplication

Provision

READY TOFASHION

Dispatch, agency, andrecruitment
Recruitment

Application

Job seekers

Job seekers

20,000 persons

70,000 persons in total• Enabling the Group to provide comprehensive personnel solutions in the fashion industry• Aiming at winning new contracts and new customers from among businesses that deal with
S-Groove and READY TO FASHION• Expecting to improve the matching rate for job placement by increasing the number of job
seekers

６

Initiatives for management that emphasizes human capital

30

Human Capital

Initiatives for management that emphasizes human capital
TSI Holdings is providing support to improve the skills of employees and encourage their development.
The Company aims at developing independent human resources who support the future of TSI Holdings.

Designer development program

Providing opportunities for career development

Self-development support system

As part of its efforts to create corporate culture, theCompany is carrying out a program to develop
creators in-house.

As part of its efforts to establish an environment for learningand career development, the Company has introduced the
GLOBIS Manabi Hodai learning program for all persons inmanagerial positions and employees who wish to join it.

TSI Holdings has established a self-development
support system to stimulate and encourage
employees’ desire to develop themselves
independently. The Company supports part of theexpenses required to obtain or pass tests for any of
the 39 licenses, which can be effectively used forbusiness.

With a workshop for designers in all brands of theGroup as a start, the Company planned talkseminars as requested by many participants.
In each seminar, guests are invited from outside to
speak about the theme chosen.

By backing up independent learning by employees, theCompany aims at raising the level of employees’ basic
business knowledge and skills on a group-wide basis andmaking all information shared by all employees.

The aim is to secure and develop capable humanresources in the Group.

31

Human Capital

Initiatives for management that emphasizes human capital
TSI Holdings is striving to improve its systems to create a work environment that enables employees to work easily andcomfortably.
In response to diversifying work styles, the Company aims at raising the level of employee engagement.

Promoting the self career dock system
The Personnel Department actively encourages its
members to obtain a career consultant’s license, andso far, five of them have acquired the license. This
has enabled the department to implement the selfcareer dock system in-house.
Currently, the Company is striving to promote the selfcareer dock system focusing on sales
representatives who have three years of service or
more, and in the future, it plans to expand the system
so that it covers its entire organization.

Establishing a section to contact forcounseling

Encouraging employees to take child-careleave

As an increasing number of businesspersons havetended to become mentally ill in recent years, theCompany established an external section to contact
for counselling in order to provide sufficient care tothem as well as prevent, early detect, and treat
mental illnesses.

At TSI Holdings, the percentage of women taking childcare leave has reached 100%, indicating that theCompany essentially has an environment that enables
women to obtain such leave easily. The Company has
also launched an initiative to encourage men to obtainsuch leave, and during the past several years, thepercentage for men has doubled each year.

Specialist counselors meet requests of not only
employees but also their families for advice on
mental health.

The Company will strive to further increase thepercentage of employees taking such leave.

７

Initiatives related to the SDGs

33

SDGs

Concluding a capital and business alliance agreement with
SynCom Agritech
As part of its strategy for raw materials “Material Innovation,” TSI Holdings recently entered into a capital and businessalliance agreement with SynCom Agritech Co., Ltd., which cultivates organic cotton while paying attention to human rights
and the environment.

×

SynCom Agritech Co., Ltd.

Expected effects of the business alliance✔ Securing the priority right to be supplied with organic
cotton✔ Promoting the production of raw materials with lessenvironmental impacts✔ Realizing products for which traceability is guaranteed✔ Establishing a system to improve farmers’ income while
paying attention to human rights✔ Contributing to biodiversity in cotton-growing andneighboring areas

SDGs

34

As a member of society, TSI Holdings contributes to it throughbusiness activities
In order to achieve its purpose “Through the power of fashion entertainment, we will create empathy and social value aroundthe world,” TSI Holdings is contributing to society through business activities.
Case

01

Support for women who needsocial protection

As part of its efforts to empower women who
come to DV shelters or women protection
facilities for help, the Company has provided
some 200 clothes and sundry goods to eightsuch facilities nationwide through a corporation
called Ichigokotohoginomori.
The Company emphasized the power offashion for self-development by coordinating
clothes it provided.
It plans tocontinuously provide
such items twice a
year.

Case

02

Inviting children who live inchildren’s homes to amuseumCase

03

Receiving visitors to theworkplace

TSI Holdings invited children from children’s
homes, who were supported by
Ichigokotohoginomori, to the Mori Art Museum.

A group of junior high school students visitedthe head office and stores of TSI as part oftheir learning activities.

The Company has a corporate agreement with
the Mori Art Museum as part of its employee
welfare program. In this project, as part of its
initiative for “quality education for all” as statedin the SDGs, it provided the children with anopportunity for the high-quality

At various workplaces, they learned about awide range of jobs and work types mainly
through lectures, tours, and hands-on
experiences in business operations.

experience of seeing,
listening, feeling, andthinking” with thecooperation of the Art
Museum.

Nurture worldwide empathy and social value through thepower of fashion entertainment.

A company creating fashion entertainment８Reference Data

37 Highlights of Q3RD Results for FY Ending Feb. 2024
Unit:Million Yen

Overview

Q3RD 2023 Ending
Feb.

Q3RD 2024 Ending Feb.

(Revenue recognition standards)
Results

Composition
Rate (% )Results

Composition
Rate (% )Y/YChangeY/Y (%)Net Sales

43,318+100.041,578+100.0-1,73996.0

Gross Profit

24,631+56.9

23,360+56.2-1,270

94.8

SG&A Expenses

21,493+49.6

21,669

+52.1

176

100.8

20,683+47.7

20,707

+49.8

23

100.1

Goodwill Amortization

127

+0.3

125

+0.3

-1

98.6

Depreciation and Amortization

682

+1.6

836

+2.0

154

122.6

Operating Income

3,137

+7.2

1,690

+4.1

-1,446

53.9

Ordinary Income

3,169

+7.3

2,036

+4.9

-1,13364.2

Extraordinary Income

99

+0.2

910

+2.2

811

919.0

Extraordinary Loss

433

+1.0

382

+0.9

-50

88.3

Profit Before Taxes

2,834

+6.5

2,563

+6.2

-271

90.4

Profit Attributable to Owners of Parent

2,372

+5.5

1,818

+4.4

-553

76.7

EBITDA ※

3,947

+9.1

2,653

+6.4

-1,294

67.2

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

38

Highlights of Cumulative Q3RD Results of 2024 Ending Feb.
Unit:Million Yen

Overview

Cumulative Q3RD 2023
Ending Feb.

Cumulative Q3RD 2023 Ending Feb.

(Revenue recognition standards)
Results

Composition
Rate (% )Results

Composition
Rate (% )Y/YChangeY/Y (%)Net Sales

115,406

100.0

114,857

100.0

-549

99.5

Gross Profit

65,36656.6

64,20155.9-1,164

98.2

SG&A Expenses

61,63953.4

61,978

54.0

338

100.5

58,60850.859,235

51.6

626

101.1

345

0.3

356

0.3

11

103.2

2,685

2.3

2,385

2.1

-299

88.9

Operating Income

3,726

3.2

2,223

1.9

-1,503

59.7

Ordinary Income

5,061

4.4

3,645

3.2

-1,41672.0

Extraordinary Income

972

0.8

1,421

1.2

448

146.1

Extraordinary Loss

682

0.6

486

0.4

-195

71.3

Profit Before Taxes

5,352

4.6

4,580

4.0

-772

85.6

Profit Attributable to Owners of Parent

4,621

4.0

3,290

2.9

-1,33071.2

EBITDA

6,757

5.9

4,965

4.3

-1,791

73.5

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

39

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2024

Net Sales
Per Channel

Cumulative Q3RD 2023
Ending Feb.

Cumulative Q3RD 2024 Ending Feb.

Department Stores

15,21113.2

14,802

12.9

97.3

Composition
Rate Y/Y
Change(pt)-0.3ptCommercial Facilities(*1)

49,93043.3

52,030

45.3

104.2

+2.0ptIn-house EC

13,244

11.5

11,43710.0

86.4-1.5pt

3rd Party

14,90312.9

14,20412.4

95.3-0.5pt

E-Commerce

28,14724.4

25,641

22.3

91.1-2.1ptOthers(*2)

11,955

10.4

13,083

11.4

109.4

+1.0ptDomestic

105,24491.2

105,557

91.9

100.3

+0.7pt

E-Commerce

2,922

2.5

2,699

2.3

92.4

-0.2ptOverseas(*3)

10,161

8.8

9,299

8.1

91.5

-0.7ptEC(E-Commerce)

31,07026.9

28,34024.7

91.2-2.2pt

TOTAL

115,406

100.0

114,857

100.0

99.5

-

(Revenue recognition standards)

Results
Composition(Million yen)
Rate (%)

Results
Composition(Million yen)
Rate (%)

Y/Y (%)*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.

40

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2024

Brands Overview

Cumulative Q3RD 2023 Ending Feb.

Y/Y

Cumulative Q3RD 2024 Ending Feb.

(Revenue recognition standards)
Sales

Composition
Rate (% )Gross Profit
Ratio (% )Sales

Composition
Rate (% )Gross Profit
Ratio (% )Sales (%)

Gross Profit
Ratio (pt)1.

PEARLY GATES

13,42911.6

61.6

12,047

10.5

58.4

89.7

-3.2pt2.

MARGARET HOWELL

9,500

8.2

65.9

10,376

9.0

64.7

109.2

-1.2pt3.

NANO universe

10,308

8.9

53.2

10,110

8.8

53.0

98.1

-0.3pt4.

NATURAL BEAUTY BASIC

8,433

7.3

63.9

8,605

7.5

64.9

102.0

+1.0pt

5.

HUF

7,744

6.7

50.6

6,723

5.9

52.0

86.8

+1.4pt6.

AVIREX

4,853

4.2

64.7

5,567

4.8

58.3

114.7

-6.3pt

7.

STUSSY

3,335

2.9

65.0

3,905

3.4

63.7

117.1

-1.3pt8.

new balance golf

3,527

3.1

51.7

3,661

3.2

50.1

103.8

-1.6pt9.

human woman

3,349

2.9

65.0

3,323

2.9

65.6

99.2

+0.5pt10.

Jack Bunny!!

2,662

2.3

48.2

2,612

2.3

48.0

98.1

-0.2ptTOP10

67,146

58.2

59.3

66,935

58.3

58.5

99.7

-0.8ptOther Brands

44,43538.5

53.9

47,374

41.2

52.3

106.6

-1.6ptContinuing Brands

111,581

96.7

57.1

114,309

99.5

55.9

102.4

-1.2pt

3,824

3.3

42.0

547

0.5

50.8

14.3

+8.8pt115,406

100.0

56.6

114,857

100.0

55.9

99.5

-0.7ptClosed Brands
TOTAL

41

Highlights of Cumulative Q3RD Results for FY Ending Feb. 2024

Domestic Monthly Sales Information

Cumulative Q3RD 2023
Ending Feb.
All Stores ：101.3％
Existing Stores ：102.6％

Cumulative Q3RD 2024
Ending Feb.
All Stores ：100.7％
Existing Stores ：104.7％

42Highlights of Cumulative Q3RD Results for FY Ending Feb. 2024

The Number of Stores
Q3RD 2023 FY Ending
Ending Feb. Feb. 2023

Store
Open

Store
Close

Cumulative
Q3RD 2024
Ending Feb.

Q3/Q4
ChangeY/Y
ChangeDomestic

779

738

+65

-61

742

-37

4

Overseas

29

29

+1

-

30

1

1

Total

808

767

+66

-61

772

-36

5

Restaurant Domestic

8

8

-

-

8

0

0

Cosmetics Domestic

37

36

+1

-2

35

-2

-1

Total

853

811

+67

-63

815

-38

4

Apparel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.