Values and Vision

Special Report

Value Creation

Management Strategy

Sustainability

Governance

DataJ. Front in Motion

1“R&D” functions thatlead to innovation

Bring Diverse “Knowledge”
to Innovation.

CVC fund members of J. Front Retailing and IGP

What was considered correct until yesterday“knowledge” gathers, it will not become a big force oris no longer easy to predict even a few years intoin order to bring about innovation, it is extremely

may not always be correct tomorrow. Now that it
the future, we cannot envision a bright future as anextension of the past. It is true that those feelings
have become stronger after experiencing theCOVID-19 pandemic for three years. Innovation isessential to open up an era shrouded in uncertainty

and create the future. This process requires diverse“knowledge” - the combination of knowledge andwisdom.

The Group emphasizes diversity because we areserious about realizing true innovation. It is inevitable

24

important to create a culture and system that actively
accepts changes and differences.

One of the ideas in the Group’s action guidelines

We have identified five areas
for investment: entertainment,
healthcare, real estate tech, retailtech, and deep tech, based on thepremise that they match the threestrategies of the Group: Real ×
Digital Strategy, Prime Life Strategy,and Developer Strategy. Since theestablishment of the fund, fiveprojects (as of the end of June 2023),
including art, travel, metaverse, andcommunity-related projects, havealready taken shape, and we believe

CVCを通じた人的資本経営推進

there are trials and errors, or challenges, there arealso failures. If no action is taken, of course there isthat the ground for innovation issteadily growing.
We communicate our CVC
activities internally through allchannels. We visited key persons ineach business and interviewed themin collaboration with IGP to deepen
mutual understanding, which leads
to sourcing of startups that havea high affinity with us. Information
obtained from CVC activities is also
shared widely with employees via theintranet and email newsletters.
As a result of these steady efforts,
we actually began to hear frommany of our employees that theywould like to have contact withadvanced startups. We are seeing asteady increase in the momentum
for innovation, moving away from an
excessive “do-it-yourself” approachand proactively utilizing outside
knowledge.
We expect that 4,800 of the Group’s
human resources, or one out of every
two employees, will be involved
i n s o m e w a y i n C VC a c t i v i t i e sby 2030. The important thing forinnovation is to keep a close eye on
the “outside world.” By proactively
making contacts with startups, wewill stimulate the intrinsic motivationof the Group’s human resourcesand encourage them to take on newchallenges.

CVC

Promotion of human capital management via CVC

JFR WAY is to try without fear of failure. Because

Businessseeds

Develop management human resourcesand entrepreneurial human resources

Explore business seeds outside the Group
Combine with business seeds and ideas
outside the Groupno failure. We are willing to take on the challenge ofinnovation again and again, without fear of failure, inorder to create the future.

Creating the future. That means opening up newmarkets. Rather than following conventional successprocess based on past successful experiences.

combination of “knowledge” and work on “creatingOn the other hand, it is clear that even if diverse

In October 2022, we established
the CVC fund named JFR MIRAICREATORS Fund jointly with Ignition
Point Venture Partners Inc. (IGP),
which has extensive knowledge inthe venture capital business. Our
CVC is positioned as an R&D function
to become a group of companies
that continue to innovate throughcollaboration by investing in startups
with innovative technologies andbusiness models.
After the formation of the CVC
fund, an overwhelming amountof information on startups has
been gathered. We have alreadyaccumulated information on as
many as 157 companies, and it is
becoming one of the bases of theGroup’s “knowledge.” While we
carefully assess business synergies,
IGP makes investment decisions
based on a detailed analysis of thebusiness plans drawn up by startups,
from funding to growth potential
and probability. We believe that byclarifying the division of roles, wehave been able to build a more robust
and speedy decision-making system.
Under the fund vision of “making
the future better and moreinteresting,” we aim to create newswell unless the vectors are aligned. In other words,

that the conclusion will be commoditized only bycollecting “knowledge” through the conventional

value by updating people’s lifestyles,
the quality of their individual lives
and work styles, and the way they
spend their time, as well as theirrelationships, connections, andcommunication with others. This
CVC function will be used to combine
business seeds outside the Groupand ideas and measures within
the Group, leading to innovation ofexisting businesses and the creationof new businesses, as well as to thedevelopment of management humanresources and corporate culturereform.

patterns, we will try new approaches through theCVC

Humanresources

Corporate
cultureStimulate intrinsic motivation
Encourage new challenges

customers for a new era.”25

Values and Vision

Special Report

Value Creation

Management Strategy

Sustainability

1

As social changes accelerate, webelieve that it is an important mission
to discover the buds of the next era
and provide new experiences andexcitement, and in recent years,
we have regarded esports, which isshowing excitement mainly among
the younger generation, as one of thecategories of attention.
Therefore, we acquired a 50.8%
stake in XENOZ Co., Ltd., which owns
the esports team SCARZ, and madeit a subsidiary. In addition to making
a full-scale entry into the esportsbusiness, which is expected to growin the future, we will work to create
new value by creating synergies withexisting businesses such as Parcoand the Department Store.
It is estimated that approximately
17.5 million people in Japan areinterested in esports, with young
people in their teens to 30s
accounting for about half of the total.
The Ministry of Economy, Tradeand Industry held a Study Groupon Measures for Vitalizing Esports
in 2020 and declared that it wouldembark on a full-scale effort tosupport the growth of the domestic

esports market. It is estimatedthat the domestic esports market
will grow at a rate of nearly 30%
by 2025, driven by an increase in
the number of esports fans and anincrease in sponsorship revenue dueto the efforts of the government anddomestic companies.
In addition, it was selected as ademonstration event at the AsianGames in Indonesia 2018 and as an
official event at the Hangzhou Gamesscheduled for 2023. Furthermore,
the first Olympic Esports Week
organized by the International
Olympic Committee (IOC) was heldin Singapore in June this year. As anevent with an eye on future adoption
for the Olympics, 131 athletes from64 countries and regions, including
Japan, participated. It is expected todevelop more and more globally inthe future.
XENOZ has been leading theindustry since the early days ofesports, not only with the longestablished professional team SCARZ
that has achieved many good resultsin major esports competitions, butalso by planning and managing
its own competitions and events.
Esports is a market that is expected

to continue to grow at a high ratein the future, and by entering themarket from its early stages, we willsolidify recognition as a pioneer anddevelop it as a future pillar of ourentertainment business.
I n a d d i t i o n , f o r t h e G r o u p’ s
Daimaru, Matsuzakaya, and PARCO,
acquiring next-generation customers
is one of the major challenges.
Since esports is of great interest to
the younger generation, especially
Generation Z and those in theirteens to 30s, we believe that this will
enable us to reach out to these nextgeneration customers, which will leadto increased awareness and brandvalue.
Fu r t h e r m o r e , e s p o r t s h a s ahigh affinity with businesses thatutilize digital technologies such as
metaverse and NFT, and having
an esports team as content isexpected to expand into a variety ofbusinesses. We will accelerate theimplementation of our Real × Digital
Strategy by expanding our business
into the digital domain while ensuring
the effectiveness in the real domain
of attracting customers by holding
events at the Group’s facilities.

eSports“Develop 1,000”
digital human resources
We have developed the JFR Digital
Human Resources Development
Program, and in December 2022, westarted developing data analysts anddigital designers who will become
our core human resources. Toward
2030, we will create new services
and businesses while improving theefficiency and productivity of existing
businesses, which is necessary totransform the Group’s businessportfolio. Specifically, we aim todevelop 100 digital core humanresources by fiscal 2024 and 1,000

a single light by accumulating thediverse wisdom of diverse people
gathered from various divisions leads
to a pseudo-experience of realizingchange.
What is important is not only toacquire the mindset and knowledge
through human resource education,
but also to integrate and link themwith the functions of the organization.
We will bring new value and change
to day-to-day operations, and create
operational reform and synergy
through collaboration among corehuman resources across divisions
and operating companies.

by fiscal 2030. We envision that atleast one core human resource will
be assigned to each division of eachGroup company. When the relevant
division notices a problem, it will
create an environment in which theproblem can be solved quickly.
This program also incorporates aworkshop style to improve practicals k i l l s . Fo r e x a m p l e , w e w o u l dcombine our strengths, assets, andtechnology, and then come up withideas while setting target customers,
which would then be discussed andvoted on by the team as to what
they think is best. It can be said thatexperiencing the process of seeing

Future vision of digital human resource development
Develop a large number of two types of digital human resources to contribute tocustomer data-driven management and the creation of new business models.
《Provide skills and knowledge》

Visualization of current operations
Eﬀective measures
Creation of a new customer base《Create an environment》《Create an internal production unit》

Human resources who cananalyze and utilize data

Raise the literacy
level of all employees《Current situation》
I want to change anexisting business, but

Customer-driven management/
new business
New knowledge/
promotion of digitalization“Customer base” and “place”

× Digital human resources × as inherent strengths

Cross-group actionData analyst

Existing channels such as app × digital technology
New channels such as metaverse
Increased eﬃciency of internal operations

Cooperation
Strengthen “data utilization”
and “business design”+ mindset

I want to start a
new business, but

Active recruitment of external
professional human resources
The Group actively and constantly
recruits mid-career workers.
Experienced professionals fromdifferent industries only have a highlevel of expertise, but also bringa variety of insights due to thedifferences in the cultures in which
they grew up. Such combination withforeign elements is essential for thetransformation sought by the Group.
Needless to say, we are strengthening
our existing core businesses suchas Daimaru Matsuzakaya and Parco,
and we are also working to acquire

26

DataDigital

J. Front in Motion

Entry into esports

Governance《Provide skills and knowledge》《Develop business processes》

Digital designer
Human resources who can designbusiness issues and management themeswith digital technology × businesshighly specialized human resourcesin the payment and finance area anddeveloper area, where future growthis expected.
At the holding company, whileclarifying our role as a holding
company, we will work on recruiting
highly specialized and professional
human resources in new businessareas, the finance division, the legaldivision, and others, and strengthen
our functions in terms of both quality
and quantity so that we can fulfill
our roles of incubation (management
planning, finance, legal affairs, humanresources, etc.) for each of the Group
companies. To this end, the holding《Create an internal production unit》

company will aim to achieve a 50%
share of external human resources in
the future.
Changes in the number of mid-career hires (People)
200161

150

103

100

50

049

FY2020

FY2021

FY202227