We decided to revise the numerical targets downward of our mid-term
management plan through FY2025 in November 14, 2023

Senshukai Group
Medium-term Management Plan 2021-2025
July 29, 2021
TSE First Section (8165)
SENSHUKAI CO.,LTD.

Assessment of the Previous Medium-term Management Plan
◼ Implemented structural reforms based on the Medium-term Management Plan to overcome the 2017 management crisis.
Established a management base for renewed growth by improving profitability and financial position as well as the capability of
the corporate structure.

2018

2019

2020

Built a foundation for renewed growth

Sowing seeds for renewed growth

Achievements⚫ Optimized the size of business→ Reduced inventory, review of
product lineup⚫ Redefined business domains→ Reorganized group companies⚫ Reviewed human resources andcorporate structure⚫ Developed and implemented
procedures for optimizing inventory⚫ Reinforced marketing from thecustomer's point of view
⚫ Strengthened capability to develop andlaunch competitive products⚫ Created a new brand slogan⚫ Boosted gross profit through operational
reforms⚫ Increased measures to acquire newmembers⚫ MD and development consistent with thebrand slogan⚫ Developed, upgraded, and popularized
signboard products⚫ Expansion of sales channels in Japan andoverseas• Reviewed investment in the bridal business in the first quarter of 2021 and stepped up investment in the mail-orderand online shopping business as its growing importance as a social infrastructure was confirmed. As a result, financial
position improved, and the equity ratio rose to 64.4%.
• Worked cooperatively to implement reforms and improve productivity despite a significant decline in the number of
employees in 2018.
• Structural reforms and enhanced profit and financial structure helped to eliminate uncertainty as a going concern.
• Viewing the COVID-19 pandemic as an opportunity, continued to build on the achievements of structural reforms
to transit from a defensive to an offensive growth strategy.

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

2

Reassessment of the Previous Medium-term Management Plan
– Mail-order and Online Shopping Business◼ Sales of the mail-order and online shopping business started to revive from 2020 and operating profit increased significantly andmoved into the black.
Operating profit (Millions of yen)
営業利益（百万円）
2,624

Net sales (Millions of yen)
売上高（百万円）
86,452
61,30067,465(805)(5,633)

2018
2018年

2019
2019年

2020
2020年

2018年
2018

2019年
2019

2020年
2020

◼ Marketing initiatives were successful and as a result the number of members has recovered. Improved product lineup and review
of product development increased competitiveness of products while operational reforms contributed to enhancing profitability.

2.65

2.93
2.37

Gross profit margin (%)
売上総利益率（％）

型あたり売上高（千円）
Sales per merchandise item
(Thousands of yen)865

購入会員数（万人）
No. of members making purchases(Millions)

688

47.9%

49.8%

490
38.9%

2018
2018年

2019
2019年

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

2020
2020年

2018
2018年

2019
2019年

2020
2020年

2018
2018年

2019
2019年

2020
2020年

3

Reassessment of the Previous Medium-term Management Plan
– Bridal Business◼ Reviewed the business structure of the entire Senshukai Group following the significant impact of the COVID-19 crisis.
Consequently, in fiscal 2021 redefined the bridal business as a business segment for indirect investment.
Net sales (Millions of yen)
売上高（百万円）

Operating profit (Millions of yen)
営業利益（百万円）

20,676

19,386

1,004

971

8,400
(3,728)
2018
2018年

2019
2019年

2020
2020年

2018
2018年

2019
2019年

2020
2020年

•

An examination of the business portfolio of the Senshukai Group led to the conclusion that revising the policy forinvestments in the bridal business and strengthening the financial soundness of Senshukai and associated companies
would result in the growth of corporate value and produce significant benefits for customers and shareholders.

•

As long-term risk has been limited and financial soundness improved, resources were channeled to the mail order andonline shopping business because the importance of this business as part of a vital social infrastructure has increased
because of the pandemic.

•

We will continue making investments based on the alliance with Dears Brain Holdings Inc. in order to retain our
involvement in the wedding business sector as a channel for providing products and services to customers.
For details, refer to the “Notice of Change in Consolidated Subsidiaries (Transfer of Shares) and Revisions to Consolidated Outlook” released on March 23, 2021 (Japanese version only).

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

4

Our Goals
Changes in the business climate◆ Permanent changes in consumer values and behavior due to the pandemic◆ New standards for corporate activities (ESG/SDGs/Others) for sustainable growth◆ More competition from other industries due to DX progress and increasing e-commerce demand
Central theme for business activities◆ Take the following actions to remain close to customers by remaining dedicated to the spirit of placing
priority on relationships with customers that has guided our activities since our inception➢ Use today’s digital activities to alter ties with customers and how we provide customers with new ideas (Progresswith the DX)➢ Supply products and services that closely reflect customers’ needs and a broad range of lifestyles➢ Use activities with customers concerning social issues for the creation of a sustainable society

Our “Women’s Smiles Company” vision, which was announced in 2011, will continue
to evolve to reflect changes in our markets. Senshukai has been dedicated to creating
smiles since starting operations 66 years ago. Our goal is to make even more people
happy in order to help make the future better for everyone.
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

5

Targets of the New Medium-term Management Plan (2021-2025)
Growth by using a Unique Co-creation Model centered on the mail-order and online shopping business¥90 billion
Net sales¥76 billion¥4 billion¥1 billion

OperatingprofitWe decided to revise the numerical targets downward of our mid-term management plan

ROE: 8% or morethrough FY2025 in November 14, 2023

2021

2022

2023

A base for the next stage of growth

Faster activities for growth⚫ Define growth sectors, centeredon the mail-order and online
shopping business⚫ Establish a policy for sustainability
activities⚫ Review the organization,
personnel training and businessprocesses⚫ Replace IT systems/Implementbusiness process reengineering⚫ Use mainly mobile links forbuilding strong lines ofcommunication with customers
and understanding their needs⚫ Increase skills for developing
original products and services⚫ Increase activities concerning
sustainability⚫ Start services for usedmerchandise⚫ Upgrade personnel training
programs

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

2024

2025

Activities for a sustainable society
Establish a Co-creation Model⚫ Establish a Unique Co-creation
Model⚫ Build a strong profit structure byestablishing a new business model⚫ Use the new business model inJapan and other countries toexpand to new business domains

6

Three Goals to Accomplish by 2025
Three Goals(1) Be a source of unique products and services that can be integral elements of ourcustomers’ lives by reflecting in our products and services a broad range of values andlifestyles and an accurate understanding of customers’ lifestyles.

(2) Use close ties with customers to supply more products that are environmentally
responsible, can be used with confidence, and make customers excited to purchase anduse. Increase measures for the recycling and reuse of merchandise (maximize utilization
value*) for contributing to a sustainable society where all products are used as much as
possible.

(3) Play a role in the establishing of a co-creation society that brings together people andcompanies that share the same values and encompasses many types of lifestyles.
* Utilization value is the sum of the value of goods and services (quality, price, accuracy of meetingneeds, attractive and practical designs, materials/ideas for products people like and use a long time,and other attributes) and the value of those goods and services during and after their use.
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

7

The 2025 Business Model

Create customer experience value no other company can match by combining Senshukai’s
distinctive strengths, a unique customer database and the support of business partners(2) Maximize utilization value
Before use

During use

Merchandise
life cycle

After use

Values・Creation of experiences/products/services
integral to customers’ lives
・Communication (Online/Offline)

Customerdatabase

Collaborationfor original
products andservices

Others/New businesses

ValuesTargets

・Creation of experiences/products/services
integral to customers’ lives
・Communication (Online/Offline)
Understandingof customers

Customerdatabase

B to CB to B to C

Feedback

Framework for knowing customers thoroughly
A new foundation for business operations
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

Business partners

Customerdatabase(3) Co-creation(1) Fusion of many values and lifestyles

Values・Creation of experiences/products/services
integral to customers’ lives
・Communication (Online/Offline)

Ideas formerchandise/advertisements

Customer coredatabase

Data/asset link

Customer ID x Values
8Four Reforms to Accomplish by 2025
Digital technologies will be used effectively for all four reforms

1. Build a framework that enables everyone at the Senshukai Group to acquire a thoroughknowledge of customers’ needs and reflect these needs in all our activities
2. Rebuild our business model for maximization of the value of use to reflect the ongoing shift
in consumer behavior from consumption to use.
3. Resolve the disharmony between new values and lifestyles, a theme dating back to our
inception, by supplying unique products and services created with love and creative ideas.
Expand this business model horizontally in Japan and other countries to enter new businessdomains (accomplished by further increasing co-creation with our partners).
4. Build a new management base to achieve these goals and ensure profitability

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

91. A Framework for Understanding Customers’ Needs
Build a framework that enables everyone at the Senshukai Group to acquire a thoroughknowledge of customers’ needs and reflect these needs in all our activities◆ Establish a structure for one-to-one dialogues with customers for constantly creating
opportunities to interact with customers◆ Increase the use of the Belle Maison Desse monitor website membership database (about
200,000 registered members)◆ Use in business operations the information acquired from the expansion of customer contact
points resulting from rebuilding the business model➢ Use the shift to primarily mobile links for receiving and analyzing information from customers about merchandise
during and after use➢ Receive and analyze feedback received directly from customers at offline stores◆ Create more Senshukai fans by understanding customers from their perspective and using
sound two-way communications➢➢

Use the analysis of customer feedback for providing useful messages and using suitable methods to approachcustomers
Reinforce two-way communications to make Senshukai a company that customers feel close to

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

102. Rebuild our Business Model for Maximization of the Value of Use
Rebuild our business model for maximization of the value of use to reflect the ongoing shift
in consumer behavior from consumption to use.
1 : Use maximization of utilization value for realigning and strengthening products

and services

2-2: Use mainly mobile links for customer communications
Reinforce the customer database, including during/after use

2-3: Implement new advertising programs by restructuring the business model

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

112-1. Use Maximization of Utilization Value for Realigning andStrengthening Products and Services
Before use◆ Establish a new basic policy for creating products and services based on the principle ofmaximizing utilization value◆ In accordance with the basic policy, create new products centered on experiences (priority on
experience value, fusion of merchandise and services)◆ For new types of products and services, use a made-to-order production model and activities
that reduce risk and protect the environment◆ Use centralized activities, including brand codes, for the management of basic policies tomaintain outstanding quality◆ Further raise sales per merchandise item and operating efficiency by using basic policies andnew methods for selling products and services
During use◆ Provide products and services in a manner that allows continuously using products as a usefulitem◆ Establish and upgrade frameworks for sharing among customers information about how to
use products properly and for a long time
After use
◆ Operate a purchasing service that allows customers to discard used merchandise easily andwith confidence of reuse, recycling, or other proper handling (co-creation with partners)◆ Provide a unique used merchandise service to help create a recycling-based society
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

122-2. Use Mainly Mobile links for Customer Communications andBuild a Stronger Database
Customer communications centered on mobile links◆ Use the Senshukai app and other methods for maintaining two-way communications withcustomers before, during and after merchandise is used
Use offline channels◆ Link store operations with convenient digital functions, such as a service that allows
customers to see products prior to a purchase, online payments, loyalty points and otherfunctions◆ Effectively use paper catalogs by more narrowly targeting people who need these catalogs
and using exclusive Senshukai editing functions

Reinforce the customer database, including during/after use◆ Use a redesigned loyalty program to acquire and accumulate data about customer
behavior other than purchasing data

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

13

2-3: Implement New Advertising Programs by Restructuring theBusiness Model
Ad proposals focusing on “during/after use”
◆ By connecting with customers during and after use of our products, create new value
such as measuring the effectiveness of advertisements that includes not only purchase(consumption) data but also data on the use of our products, and then provide feedback
to our partners

Diversify advertising programs◆ Shift from a catalog-centered to a mobile-centered approach to develop a menu thatutilizes mobile devices in addition to the conventional advertising menu, as well as
collaborative product and service planning with our partners◆ Develop advertising proposals linked to a unified world view and brand code

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

14

3. Diversify into New Business Areas
Develop a business model for solving the “disharmony between various values and lifestyles” with“love” and “creative ideas”, which is a theme dating back to our inception, both in Japan and othercountries to enter new business domains.
Develop markets where “disharmony between various values and lifestyles” are likely to emerge
and increase in the future◆ Examples➢➢➢

Seniors: The aging of the population means that there is a variety of several different segments that cannot all
simply be described as “seniors,” while the product offering is limited to a single category of elderly people
Pets: Pets are becoming more and more important as households become more diverse due to nesting and otherstructures, but they are not being well looked after as lifelong companions
Men’s involvement in childcare: accelerated by the spread of remote working, but exacerbated by a lack ofsupport for “dads” (“mom” bags, “mother and child” handbooks, ...)Develop B to B to C services for existing communities◆ Develop services for IP holders/artists suffering from drop in income by promoting interaction
with fans as well as from live events➢ Provide monetization services that are compatible with people’s lives through product sales, utilizing our planningand e-commerce management capabilities

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

15

4: Rebuild the Management Base
Build a new management base to achieve these goals and ensure profitability◆ Establish a new organization that is dedicated to the rapid realization of the restructuring ofour business model◆ Review the decision-making process to manage the allocation of resources to the newdivisions and the deployment of the. prototypes realized by these new divisions
throughout the company◆ Progress of collaboration with JRE

Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

16

Progress of Collaboration with JRE
Senshukai’s new business model aims at expanding collaboration with other companies based on thecustomer’s database and contact points. East Japan Railway Company (JRE) is a strong partner that willcontribute to the development and expansion of both companies’ businesses and contribute to the creationof a richer lifestyle for customers.
◆ JRE MALL’s Belle Maison stores to grow sales and strengthen contact with customers➢ Strengthen the planning, development and sales of original products that can only be purchased at these stores➢ Strengthen the purchase and service experience to maximize customer convenience in conjunction with stationbuildings and stores in stations (e.g., picking up products at stations, etc.)◆ Increase offline contact with customers by opening more stores in station buildings
and inside stations➢ Expand points of contact with customers and create opportunities for customers to experience
the value of Senshukai’s products➢ Take on the challenge of developing spots that offer services to maximize value of Senshukai
stores to customers◆ Increase the number of new customers through VIEW Card and Belle Maison
shopping coupon exchanges and enhance customer data
◆ Strengthen the linkage between Belle Maison discount points and JRE discountpoints, and create Belle Maison/JRE membership linkage➢ Reinforce the quality and volume of Senshukai’s customer database through cooperation with its
membership◆ Speed up new business development by leveraging JRE’s vacant assets (stations and real estate) andcollaboration with group companies
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

17

Basic Policy Regarding Distribution of Earnings◆ The Senshukai Group’s basic policy is strengthening the business foundation while
maintaining stable dividends, taking into consideration the payout ratio, and ensuring a fair
distribution of earnings to shareholders that reflects its business performance. Specifically,
the Group’s policy regarding the distribution of earnings to shareholders is to strive
continuously for a payout ratio of 30% on a consolidated basis. The amount of dividends
will be determined by comprehensively taking into consideration not only the net profit,
but also future earnings forecasts, capital investment plans, financial conditions and otherfactors.
◆ The Group will use internal reserves to invest in the development of new businesses forthe medium to long term, to promote the efficiency of existing businesses, to conduct
mergers and acquisitions for expanding the Group businesses, to improve the soundnessof its financials, and to generally further strengthen its competitiveness and operations.
◆ Senshukai has a shareholder benefit program that distributes to shareholders twice every
year gift certificates based on the number of shares and the number of years the shares
have been held. These gifts are an expression of appreciation to shareholders. This
program is also a way to give shareholders a better understanding of Senshukai by using
the company’s products and Senshukai plans to continue this program in the future.
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

18Inquiries:

SENSHUKAI CO.,LTD.
1-6-23 Doshin, Kita-ku, Osaka Japan
E-mail: ir@senshukai.co.jp

This material was prepared to help investors understand Senshukai and was not intended as a solicitation forinvestment in Senshukai.
This material contains current plans and forecasts of future performance of Senshukai. These plans and forecast
figures are prepared based on currently available information. Actual results may differ from these forecasts
due to various conditions and factors in the future.
Copyright SENSHUKAI Co.,Ltd. All Rights Reserved.

19