MARUI GROUP’sVision

MARUI GROUPʼs

CO-CREATION PHILOSOPHY

In conjunction with the establishment of a long-term vision for 2050,
we at MARUI GROUP reshaped our co-creation philosophy based on our aspirations
and our principles, clarifying the intent of these ideals so that they may guide us
in our daily business activities.
Revised in February 2019

Our Aspirations

Our Principles

MISSION

PHILOSOPHY

Contribute to co-creating a flourishing andinclusive society that offers happiness to all

Continue evolving to better aid our customers

MARUI GROUP’s mission is its reason for existence. The corporate and business activities of MARUI GROUP are
the practice of fulfilling this mission. This mission is meant to provide all members of MARUI GROUP with aguide, inspiring them to reflect on whether their actions and decisions are contributing to the fulfillment of themission, even in times of uncertainty.

Equate the development of our people
with the development of our company
MARUI GROUP’s philosophy is an essential compass for fulfilling its mission. The desire to “continue evolving tobetter aid our customers” compels everyone at MARUI GROUP to work for the benefit of stakeholders by exercising their capacity for empathy to adopt the viewpoints of various stakeholders in order to understand theirthinking and their pain. The ongoing evolution of this capacity for empathy gives rise to the propensity for innovation that drives the resolution of the issues faced by customers, society, and the environment. The commitment
to “equate the development of our people with the development of our company” is founded on the belief thatMARUI GROUP’s growth is achieved when our people realize self-actualization through empathy and innovation.

2050 VISION
Harnessing the power of business to build a worldthat transcends dichotomies
MARUI GROUP’s 2050 Vision is a roadmap for the accomplishment of the Company’s mission. It puts forth

VALUES
Creditability should be built together with customers
Pioneer spirit of creating opportunities

directives for the concerted efforts to be advanced by all Group members as they ascertain changes in theMARUI GROUP’s values are the unique principles of the Company that differentiate it from all others, theoperating environment. We believe that a vision and long-term targets are essential for a company to remain true

precious founding spirit that will perpetually permeate our organization. The concept of co-creation ofto its mission and values as, no matter how righteous a mission or values may be, they will still need a guide to­creditability—based on the belief of MARUI GROUP’s founder that “creditability should be built together withclarify priorities for advancing business strategies.

customers,” rather than assigned to them—is the belief that credit should be forged through trust over long-term
relationships by working together with and being empathetic toward customers. The founder also advocated a“pioneer spirit of creating opportunities.” This value represents MARUI GROUP’s spirit of innovation andevolution, which propels us forward as we transform our business and create new demand and markets in
response to changes in customer happiness or in society.

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MARUI GROUP’s
VisionDefinition of Corporate ValueMARUI GROUP practices co-creation management with the goal of co-creating happiness together with our stakeholders. MARUI GROUP’s various stakeholders include customers, business partners, investors, communities andsociety, and employees. When formulating its long-term vision for 2050 in 2019, MARUI GROUP included “futuregenerations” alongside the prior five rings of stakeholders it emphasized. The introduction of this sixth ring of stakeholders is a declaration of MARUI GROUP’s belief that true corporate value entails looking beyond the short-term
happiness of current generations to promote harmony and the expansion of the intersection between the interestsand happiness of all stakeholders, including future generations.

Vision of Co-Creation Management
MARUI GROUP’s mission incorporates cherished values such as happiness and inclusion. Moreover, thismission is differentiated from that of our peers through the co-creation that is characteristic of MARUI GROUP.
Our concept of co-creation originates from the co-creation of creditability that was advocated by our founder.

Customers

We refer to the practice of shaping our business based on this spirit of co-creation as “co-creation management.” MARUI GROUP is, of course, focused on the co-creation of happiness. At the same time, we seek to gofurther to share the burden of the COVID-19 pandemic with our stakeholders and strengthen our bonds aspartners growing together. This is co-creation management in its truest form and is also the path we will taketoward overcoming this crisis.

Business
partners

Investors

Interests and Happiness
The value sought by stakeholders includes interests that can be measured monetarily. Such interests include
employee wages, shareholder dividends, product prices, and costs for business partners. These interests canHarmonization ofstakeholder interestsand happiness andexpansion ofintersectionsometimes appear to be in conflict when viewed from a short-term perspective. At the same time, stakeholders seek a value that cannot be measured monetarily—happiness. The types of value sought by stakeholders
sometimes fall into conflict with one another. However, we are confident that it is possible to achieve harmony
and expand the intersection between the interests and happiness of all stakeholders through dialogue andco-creation advanced over the medium-to-long term. As we move forward, we will formulate theories on typesof interests and happiness desired by all groups of stakeholders to be incorporated into indicators for evaluating the effectiveness of management.
P18 Growth of Corporate Value through Harmony between the Interests and Happiness of All Stakeholders

Communities
and SocietyEmployees

View of Partnership

Futuregenerations

MARUI GROUP views its stakeholders as partners in its quest to co-create happiness for the future. In the faceof the COVID-19 pandemic, we could not help but feel the strong interdependent relationship between people
and society that was not previously apparent. Following the institution of a state of emergency declaration inJapan, we were forced to suddenly halt the operation of our stores. This placed the business partners thathave set up shop in our stores in a difficult position, pressing us with the need to decide whether to prioritize
contractual obligations, specifically rent payments, or partnerships. We quickly realized that it was our partner-Corporate value

Intersection of interests and happiness of all stakeholders

ship with these business operators that supported MARUI GROUP. This intangible partnership founded ontrust is what underpins co-creation at MARUI GROUP.

Harmonization and expansion of intersection

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Improvement of corporate value

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MARUI GROUP’sVision

Innovation and Evolution of Business ModelIntellectual Creation Business Driven by Co-Creative Investment (2019 ~)We have continued to evolve and innovate MARUI GROUP’s distinctive business model, which merges retailing andThird president: Hiroshi Aoi (16 years of service)finance, in response to changes in the times and customer needs. Looking back at this history of innovation andAs MARUI GROUP’s capital-intensive fintech operations grew, the Company proceeded to invest in cultivating its IT staff while alsoevolution, it is apparent that this was not a linear process. Rather, sudden innovation and evolution was achieved only

directing investment toward D2C brands, start-up companies, and new business fields. This co-creative investment has come toafter we had first abandoned the methods that had led us to success previously. The belief that creditability should

stand alongside retailing and fintech as a third pillar of MARUI GROUP’s business model. We have thus embarked on management

be built together with customers and the pioneer spirit of creating opportunities advocated by MARUI GROUP’s

aimed at developing an intellectual creation business through investment in intangible assets in order to create value that isgreater than the sum of its constituents by pursuing synergies between these three pillars.

founder mirror the course of the evolution and innovation of MARUI GROUP’s business model.

Business model

2019
2019
~ ~

1931 (founding) ~2006 ~

Labor intensive

Capital intensiveIntellectualIntellectualcreation*
creation*

Retailing driven

FinTech driven

Retailing,Retailing,
FinTech,FinTech,andandCo-Creative
Co-Creative
Investment
Investment

AssetsFixed assets

Financial assets

Intangible
Intangible
assetsassetsInvestment

Investments in tangible assets

Treasury stock acquisitions

Investments
in intangible
assetsInvestments
in intangible
assets

FY1991
Achieved peak performance
EPS: ¥103.2
1960
Issued first credit card in Japan

FY2015
Stabilized earnings structures of stores
EPS: ¥58.9

FY2007
Revision of Money Lending Business Act
EPS: ¥12.9
FY2006
Began issuing EPOS cards
EPS: ¥70.4

1966
Introduced industry’s first computer

FY2009Recorded first loss due in partto financial crisis of 2008
EPS: –¥31.9

FY2018
EPS: ¥93.2

FY2011
Recorded second loss
Commenced massive businessrestructuring
EPS: –¥86.4

Earnings per share (EPS)1931
Founding

Fiscal year
ended
January 31,
1980

Fiscal year
ended
January 31,
1990

FY2020Transition to digital native stores
EPS: ¥117.6
FY2019
Entry into securities business
EPS: ¥116.0(First record high in 28 years)

Fiscal year
ended
January 31,
2000

Fiscal year
ended
March 31,2020

Capital-Intensive FinTech-Driven Business (2006–2018)

Labor-Intensive Retailing-Driven Business (1931–2005)

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FY2021Development of co-creation ecosystemthrough co-creative investmentEPS: ¥130 or more (target)

1931–1972

1972–2005

2005–Present

Founder: Chuji Aoi (41 years of service)

Second president: Tadao Aoi (33 years of service)

Third president: Hiroshi Aoi (16 years of service)

MARUI GROUP’s business initially involved selling furniture through monthly installment payments. Furniture in those days was exceptionally expensive, meaning thatsome people lacked the on-hand funds necessary to purchase furniture. We soughtto accommodate these customers by selling them furniture while at the same time
providing them with credit. By lending money through monthly installment payments,
we developed a business merging retailing and finance.

Income levels in Japan rose during the period of the Japanese economic miracle,causing the need for credit sales of durable goods to decline in the 1980s and leading
other stores using the monthly installment payment system to abandon retailing tofocus on finance. MARUI GROUP, meanwhile, turned its attention to the growing fieldof fashion. By providing credit to younger generations, we were able to include thispreviously neglected demographic and to innovate our business model merging
retailing and finance without abandoning the retail side.

After partnering with Visa Inc. to transform its prior in-house credit cards into
multipurpose EPOS cards usable anywhere in the world, MARUI GROUP continued todevelop its business model merging retailing and finance, but with finance replacing
retailing as the main proponent of growth. The Company would later redefine its
credit card business as a fintech business with the goal of providing financial services
for everyone in response to the diversification of payment methods that accompanied the trend toward cashless payments.

Customers

New families

Customers

Younger generations

Customers

All ages (everyone)

Products

Furniture, consumer electronics, and other durable goods

ProductsFashion

Products

Lifestyle proposals

Credit cards

Japan’s first credit card

Credit cards

Akai Card (Red Card) in-house credit card

Credit cards

Multipurpose EPOS card

StoresMonthly installment payment stores

StoresDepartment stores

Stores

Shopping centers

Fiscal year
endingMarch 31,
2021

* Investments in Intangible Assets Surpassing Investments in Tangible Assets
In the past, MARUI GROUP was primarily a retailer with financial functions with its credit
cards serving to prop up its stores. Accordingly, tangible assets, such as the land andstores of its retailing operations, exceeded credit card operating receivables on theCompany’s balance sheet. However, this changed with the launch of EPOS cards in 2006.
After this, card shopping transactions rose sharply, and credit card operating receivables
came to surpass noncurrent assets in the fiscal year ended March 31, 2014. The transition
to fixed-term rental contracts commenced in the fiscal year ended March 31, 2015, causeda decline in investments in stores and other tangible assets, while investments in fintech
operations, co-creative investments in new businesses, and investments in humanresources continued. As a result, investments in intangible assets surpassed investments
in tangible assets in the fiscal year ended March 31, 2019.
Intangible assets¥15.0 billion

Tangible assets¥7.3 billion

FY2008FY2019 FY202029

MARUI GROUP’sVision

Co-Creation Ecosystem

MARUI GROUP’s Goal

MARUI GROUP aspires to contribute to shaping a world that transcends dichotomies and thereby help build a flour-A flourishing and inclusive society that offers happiness to all

ishing and inclusive society that offers happiness to all. In this quest, we aim to develop a co-creation ecosystemthrough our business that extends across society and around the world. Having updated the business merging
retailing and finance that we have advanced since the Company’s founding to merge retailing, fintech, and co-creative investment centered on investments in intangible assets, we will go about developing this ecosystem throughco-creation with our six groups of stakeholders, including future generations.

EarthSociety
Co-Creation Ecosystem
MARUI GROUP’s Founding Spirit
Words of Founder Chuji Aoi“Creditability should be built together with customers”
Unique business model merging retailing and finance

FoodHousing“Pioneer spirit of creating opportunities”
Adeptness at evolving and creating innovation in response to the needs of the times

Clothing

Co-Creative
Investment

Retailing

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Finance

Retailing

FinTechCo-Creation of Creditability

Co-Creation of Creditability Encompassing Future Generations

Merging of Retailing and Finance

Merging of Retailing, FinTech, and Co-Creative Investment

Co-CreativeInvestment

RetailingEntertainmentFinTech

Co-Creation Ecosystem Extending Across Society and Around the WorldPut simply, what makes MARUI GROUP unique is its business model

The business model transformation undertaken in 2006 has enabled

MARUI GROUP is working to develop a co-creation ecosystem through its business that extends across society and aroundmerging retailing and finance based on the concept of the co-creation

MARUI GROUP to build an earnings foundation grounded on consistent

the world by means of co-creative investment founded on the principles of co-creation management it has practiced thus far.

of creditability. This fundamental business model has not changed

cash flows. The FinTech segment has continued to enjoy ongoing

This endeavor encapsulates our desire to create an inclusive ecosystem that offers happiness to all together with stakeholders.

since our roots in selling furniture on monthly installment payments.

growth in EPOS card transactions while the Retailing segment shifted

This ecosystem should go beyond simply supporting the growth of MARUI GROUP; it should encompass all aspects of our life-By setting credit limits lower than other companies, we have been ableaway from its prior consignment sales-based department store busi-styles, including clothing, food, housing, and entertainment. A society in which happiness is only available to certain people cannot

to provide financial services to a wider range of customers, enabling

ness model to a rent revenue-oriented real estate model. Given thisbe said to be flourishing. It is only when happiness is offered to everyone that a society can truly flourish.

them to enjoy shopping as we build creditability together based on theirgrounding, we are confident that our new business model merging

The realization of the co-creation ecosystem we envision will require co-creation with MARUI GROUP employees as well asusage patterns. Rather than being satisfied with the one-time relation-

retailing, fintech, and co-creative investment, in D2C brands, start-up

with customers, business partners, investors, communities and society, and future generations. We invite everyone who sharesships formed by cash transactions, we have sought to forge ongoingcompanies, and other candidates, is the model to which MARUI GROUP

our ambition and whose values resonate with our vision to join hands with us to bridge the gap between current generations andrelationships through the co-creation of creditability.

has aspired.

future generations to shape a society in which future generations can soar.

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