MARUI GROUP’s
Co-Creation
MARUI GROUP views co-creation as the process of incorporating
customer perspectives into all business processes to work together
with partners to create happiness for customers.

04

05

Numbers

4,400

to dateNumber of customers to participate in theDevelopment of Shibuya MaruiA total of 4,400 customers participated in developing plans for
Shibuya Marui through Internet surveys, group meetings, and other venues.
Store atmosphere, floor concepts, and other details of store development
were discussed with customers.

16
Number ofCollaboration Card Partners
OUR VISION

Creating Customer Happiness
Together with Our Partners
We are developing frameworks to incorporate customer

This type of co-creation business in which theperspectives into store development, product creation,

Group and customers co-create happiness together

credit card services, and all other business processes.

represents the foundation of our operations. In the

The form of happiness sought by customers is increas-

co-creation process, not only customers but also busi-

ingly being found in more-fulfilling lifestyles. Accordingly,

ness partners, community members, and employees

we are transforming our business model by holding

are seen as important “partners.” Feedback from allplanning meetings with customers for individual projects

these partners is incorporated in MARUI GROUP’s

to maintain an up-to-date understanding of their needs

business, and this type of co-creation represents theand co-create new forms of happiness.

Company’s core strength.

06

60

times a year

Women’s Shoes

planning meetings with customers

Epos Card Co., Ltd., is issuing collaboration cards with a total of
16 companies, commercial facilities, fan clubs, and other organizations across Japan (as of July 31, 2015). Cardholders can utilize
the benefits of all collaboration card partners, allowing for mutual
customer referral between MARUI and these organizations.

Around 90% of customers expressed discomfort with pumps,
but we were able to co-create a hit new line of pumps
together with customers. Customers participated in 60 planningmeetings a year, with 1,000 individuals taking part in test groups
each year.

850,000

25

Customer clothing items andshoes traded-in through the

Apparel Recycling Program
The 850,000 clothing items and shoes traded-in by customers
in the fiscal year ended March 31, 2015, were resold in stores,
used to support post-Great East Japan Earthquake reconstruction
efforts, or donated to developing countries.

t-CO2
Carbon Offset

together with local communities
CO2 emissions totaling 25 t-CO2, equivalent to the amount emitted
to manufacture the number of Rakuchin Kirei Pumps sold in March
2015, were offset through environmental preservation activities
conducted in Kobe City and Miyagi Prefecture.

07

Numbers

2.6 times

Increase in Purchase Numbers
at Machida Maruiafter conversion to a lifestyle-support store

The newly converted Machida Marui has proven popular amongcustomers of all ages, with purchase numbers rising 2.6 times.

195

2

millionNumber of
Visiting Customers,

More than

Number of extra-comfortable

an indicator of popularity

OUR AMBITION

Co-Creating Customer Joy by
Merging Retailing and Credit Cards
We strive to bring joy to our customers. As customers

various customers have proven to be major hits.

shift away from the accumulation of physical goods toFurthermore, our Credit Card Services business is sup-pursue more-fulfilling lifestyles, we are transforming our

porting all facets of customer lifestyles with its EPOS

business model to cater to the new forms of joy custom-

cards, which were launched in 2006 and have a special

ers are beginning to seek. Accordingly, we are shifting

license from Visa Inc. that includes direct issuance rights.

toward shopping center style stores, which go beyond

In the future, we aim to add a new element of joy to cus-

simply offering apparel items to also providing dining,

tomer lifestyles in the areas of fashion, food, living, enter-other services, and other shopping experiences. In

tainment, learning, health, and beauty through our uniquecreating products, the women’s shoes lines that werebusiness model that merges retailing and credit cards.

A total of 195 million customers visited our Marui and Modi storesin the fiscal year ended March 31, 2015, after increases in thenumbers of restaurants and sundry goods. The total number of daily
visitors was roughly 540,000 people.

Approx.

6

million pairs

Women’s Shoes Sold

The Rakuchin series of women’s shoes have been a major hit,with more than 2 million pairs sold to date. By expanding the rangeof sizes available, we are addressing the needs of women of all ages.

millionNumber of Cardholders
shopping both inside and outside
Marui stores

There are approximately 6 million cardholders of MARUI GROUP’s
proprietary credit cards, which have a special license with Visa Inc.
(as of June 30, 2015). EPOS cards can be used while shopping
inside and outside Marui stores in Japan and overseas.

More than

7,000

Growing number of facilities
nationwide providing

EPOS Cardholder Benefits

Discounts and other benefits are provided to EPOS cardholders
at more than 7,000 facilities nationwide. We aim to further spreadsavings opportunities throughout Japan.

planned by incorporating the input and desires of08

09

To Our Stakeholders

MARUI GROUP’s Vision
Is to Realize Co-Creation
Management.

Hiroshi Aoi
President and Representative Director
Representative Executive Officer

For the fiscal year ended March 31, 2015, MARUI GROUP
published its first integrated report. The decision to create thisreport was made based on our desire to share our policies,
values, and vision with all our stakeholders. MARUI GROUP’s
business activities are able to thrive thanks to the daily supportof shareholders and other investors as well as countless otherstakeholders, including customers, business partners, local
community members, and employees. Therefore, it is my wish
for this report to bridge the gap between the Company andall these stakeholders and thereby foster enhanced mutual
understanding.
Our corporate philosophy calls for us to “continue evolving to better aid our customers” and “equate the developmentof our people with the development of our company.” Basedon this philosophy, our mission is to maintain ties with ourcustomers to co-create new customer happiness. It is thisdrive that has fueled our transformation and evolution inrecent years. Always striving to attend to the needs of ourcustomers and bring them joy, we treasure our interactions
with customers and accordingly base all our actions fromtheir perspective. This sentiment is not only imprinted in theGroup’s corporate DNA; it is also the point of origin for theco-creation management we envision.
At the moment, the Group’s business model is undergoinga drastic transformation. This is not to say that we will abandon our current originality and strengths. However, the focus
of Japanese society is moving away from the accumulationof physical goods to emphasize the pursuit of more-fulfilling
lifestyles, changing the form of happiness customers seek andthereby necessitating that our business changes as well. Thistransformation will require us to break away from past successes to cut a fresh start based on the perspectives of thecustomers of today. And that will be no easy task. Nonetheless,I am filled with excitement for the potential new forms ofcustomer happiness we will co-create, and I think we havefinally found the path we will tread in this quest.
I hope we can look forward to the support of all our stakeholders as we tackle the challenges that lie before us on thisbold new adventure.
August 2015

President Aoi in Yurakucho Marui in June 20151011

Directors and Audit & Supervisory Board Members
As of June 25, 2015

New Management Team
Supporting Our Co-Creation
Management
Based on its co-creation management vision, MARUI GROUP
is reforming its management team to better respond to changing customer needs. For this reason, Directors and Audit &Supervisory Board members are now expected to play aneven greater role in ensuring sustainable growth and driving
medium-to-long-term improvements in corporate value.
To this end, we have reduced the number of directors
to heighten management flexibility while also strengthening
the supervisory function of the Board of Directors. In addition,
we welcomed Etsuko Okajima, Representative and CEO of
ProNova Inc., as a newly appointed external director and an
independent director as stipulated by the Tokyo Stock
Exchange. The Company now has two external and independent directors, with the other being Koichiro Horiuchi,
President and Representative Director of FUJI KYUKO CO., LTD.
With Ms. Okajima onboard, we are advancing measures tofurther empower female employees and otherwise promoteincreased diversity in the development of our people as
spoken of in our corporate philosophy.

From front left

From back left

Motohiko Sato

Takehiko Takagi

Director

External Audit & Supervisory Board Member

Koichiro Horiuchi

Tetsuji Sunami

External Director

Audit & Supervisory Board Member (Full time)

Hiroshi Aoi

Tomoo Ishii

President and Representative Director

Director

Etsuko Okajima

Masao Nakamura

External Director

Director

Hideaki Fujizuka
Audit & Supervisory Board Member (Full time)

Tadashi Ooe
External Audit & Supervisory Board Member

12

13

Executive Officers
As of June 25, 2015

New Executive Management Teamto Realize a United MARUI GROUP
We aim to provide all customers with the joy they seek. To accomplish
this goal, the Group is advancing to a new growth stage; a stage inwhich it will not be enough to merely pursue optimization on a singleGroup company or single-business basis and one in which all businesses
must be interconnected and developed as one. The vision of a United
MARUI GROUP represents our shared commitment to reaching this stage.
To help realize this vision, a new executive management team wasinstated in June 2015 to strengthen executive management on aGroupwide basis. At the same time, we are moving forward with initiatives to create a United MARUI GROUP, including actively promoting
both young and female employees and creating systems for cultivating
the next generation of executive management candidates.

From front left

From middle left

From back left

Masao Nakamura

Hajime Sasaki

Mayuki Igayama

Managing Executive Officer

Senior Executive Officer

Executive Officer

Hiroshi Aoi

Akira Ino

Yuko Ito

Representative Executive Officer

Senior Executive Officer

Executive Officer

Motohiko Sato

Toshikazu Takimoto

Masahiro Aono

Senior Managing Executive Officer

Managing Executive Officer

Executive Officer

Takashi Wakashima

Tomoo Ishii

Yoshinori Saito

Managing Executive Officer

Managing Executive Officer

Executive Officer

Nariaki Fuse

Hirotsugu Kato

Senior Executive Officer

Executive Officer

Yoshiaki Kogure

Junko Tsuda

Executive Officer

Executive Officer

In front of bust of MARUI founder Chuji Aoi in June 2015

14

15

Overview of MARUI GROUP (Fiscal Year Ended March 31, 2015)

Groupwide Performance

Marui Stores

New Indicator for Measuring Group Growth

Operating Income

Total Group transactions

Target ¥36.0 billion or more in the fiscal year ending March 31, 2017¥¥

1,469.1 billion

Retailing-Related Services¥33.8 billion

2.1%

Credit Card Services¥1,234.3 billion

Total Group
Transactions

Stores by Region

28.0 billion

Retailing and StoreOperation¥322.9 billion

20.3%

77.6%

* Total Group transactions is the total value of transactions from all threebusinesses less credit card transactions from Retailing and Store Operation.

Sales Floor Area by Product Category

44%■ Kanto region (excluding Tokyo)  41%■ Tokai region
4%■ Kansai region 
11%■ Tokyo 

13.5%

Credit Card Services¥68.4 billion

Revenue

27.4%

Retailing and StoreOperation¥147.6 billion

59.1%

For details, please refer to pages 18 and 19.

Purchases by Gender*1

Target 6.0% or more in the fiscal year ending March 31, 2017

5.2%

Purchases by Age Group*1■ Age 29 and below ■ Age 30–39 ■ Male 

12%88%

19 / 32.3%¥

EPOS Cards

Number of Stores

Number of Employees

Sales Floor Area

24 Marui stores
3 Modi stores

Approx. 8,000 employees,
including temporary employees

Combined sales floor area for Marui andModi stores

Environment Preservation
Expenditure
Total expenditure for installing LED lighting to
reduce energy consumption in Marui storesand other environmental measures

1,281 million

¥

16

5,918

employees■ Other 

444,040

m2

New Cardholders by Application Location

17%
83%

Transactions by Location

CO2 Emissions■ Marui stores 

Approx. 80% of electricity used at Maruiand Modi stores, down 1% year on year

Approx. 70% of emissions from Marui andModi stores, down 4% year on year

■ Outside Marui stores 

199 million kWh

109,000 t-CO

Electricity Consumption■ Age 50–59 

17%
20%
21%
18%
24%

*1 Purchases using EPOS cards

Increased dividends for three consecutive years
Conducted treasury stock acquisition of ¥15.0 billion,
targeted payout ratio of 30% or more

■ Platinum/Gold cards 

stores■ Age 40–49 ■ Age 60 and above 

Cash Dividends per Share / Payout Ratio

Cardholders by Card Type27

■ Sundries 

ROE■ Female Retailing-Related Services¥33.8 billion

45%35%■ Restaurants, services, and other  20%■ Apparel ■ Inside MARUI GROUP stores(Marui/Modi) ■ Outside MARUI GROUP stores 

82%
18%

Transactions by Type

12%
88%

■ Card shopping transactions ■ Cash advance transactions 

88%
12%

2

17

Financial and Non-Financial Highlights
MARUI GROUP CO., LTD., and its consolidated subsidiaries

Millions of yen
Fiscal years ended March 31

2010

2011

2012

2013

2014

Total Group transactions:
Retailing and Store Operation
Credit Card Services
Retailing-Related Services
Eliminations*1
Total operating revenues
Revenue
Gross profit
Selling, general and administrative expenses
EBITDA*2
Operating income
Net income (loss)
Segment income:Retailing and Store Operation
Credit Card Services
Retailing-Related Services
Total assets
Shareholders’ equity
Installment sales accounts receivable
Consumer loans outstanding
Interest-bearing debt
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Cash and cash equivalents
Capital investments
Depreciation and amortization
Earnings (loss) per share (yen)Net assets per share (yen)Cash dividends per share (yen)Payout ratio (%)
Total return ratio (%)
Operating income margin (%)
Return on equity (%)
Return on assets (%)
Equity ratio (%)
Stock price at year-end (yen)Market capitalization (including treasury stock)(billions of yen)Price earnings ratio (times)
Price book-value ratio (times)
Total number of employees
Ratio of female employees (%)
Total number of stores
Total sales floor area (thousand m2)
Environment preservation expenditure(thousands of yen)
Electricity consumption (thousands of kWh)
CO2 emissions (t-CO2)

—
—
—
—
—
419,255—
149,926
139,488
29,695
10,438
5,104

—
—
—
—
—
406,472—
144,736
129,940
30,457
14,795(23,638)—————
412,408—
147,240
129,224
33,08518,015
5,251

2015

—
—
—
—
—
407,366—
148,172
123,886
35,23724,285
13,255

1,297,250
338,705
1,054,706
34,695(130,857)
416,460
253,077
155,726
128,579
37,134
27,146
15,4091,469,111
322,866
1,234,339
33,816(121,910)
404,947
249,847
158,144
130,10238,33828,042
16,03637
10,272
2,509
664,357
312,188
95,871
191,486
283,676
30,811(13,034)(14,519)
32,283
17,39819,257
18.65
1,140
14.0
75.1
75.1
2.5
1.6
1.5
47.0
678

2,110
13,704
1,568
628,910284,526
111,760
158,707
264,692
30,280(7,033)(22,926)
32,603
14,332
15,661(86.36)
1,039
14.0
—
—
3.6
(7.9)
2.2
45.2
537

7,547
10,6192,567
615,130
289,975
142,995
132,280
245,175
24,897(3,913)(23,660)
29,928
7,941
15,069
19.19
1,059
14.0
73.0
73.0
4.4
1.8
2.8
47.1
690

9,885
13,177
3,792
624,173
303,637
171,187
123,739
243,762
5,111
435(5,571)
29,940
7,665
10,951
48.43
1,109
15.0
31.0
31.0
6.0
4.5
3.9
48.6
975

10,562
15,634
4,523
664,019
315,446
213,466
125,215
264,824(9,227)(6,791)
16,14130,053
11,238
9,988
56.29
1,152
18.0
32.0
32.0
6.5
5.0
4.3
47.5
885

8,074
20,126
3,333
675,627
306,795
227,121
128,030
277,839
12,310(3,867)(7,267)31,229
9,786
10,296
58.87
1,166
19.0
32.3
125.3
6.9
5.2
4.2
45.4
1,365

216.0
36.4
0.6
6,847
44.7
25
453.3

171.1
—
0.5
6,492
44.4
26
457.8

219.8
36.0
0.7
6,218
44.4
27
458.4

310.6
20.1
0.9
6,101
44.3
27
453.1

282.0
15.7
0.8
5,966
44.5
27
446.5

380.3
23.2
1.2
5,918
44.6
27
444.0

633,700
259,800
130,600

893,700
244,800
114,900

1,164,500
204,500
96,3001,141,300
204,800
104,300

924,500
215,000
113,000

1,281,000
199,000
109,000

Introduction of New Management
Indicator—Total Group Transactions
As Marui stores are progressively converted into
shopping center style stores, their source of revenue
will change from product sales to rent revenues.
While this transition is expected to result in income
growth, it will also lead to a gradual decrease in “total
operating revenues” under the previous calculation
methods, meaning that revenue and income trends
will be inconsistent. For this reason, it was decided to
introduce the new indicator of “total Group transactions” to more accurately display the Group’s growthand management’s performance.
In addition, from the fiscal year ending March 31,
2016, the calculation method for sales through theconsignment buying system in Retailing and StoreOperation will be changed from the previous method(amount of sales made to customers) to a method
based on global standards that only records theamount of income accruing to the Company. In conjunction with this change, the line item that was previously “total operating revenues” will be displayed as“revenue.” The two new indicators are designed tomore accurately reflect the Group’s performance.

Acquisition and Cancellationof Treasury Stock
The current three-year, medium-term management
plan, which covers the period through March 31,
2017, targets improved corporate value to berealized through the implementation of growthstrategies and financial strategies. One such financial strategy is to utilize the total of operating cash
flow generated over the plan’s period to fundgrowth investments and shareholder returns.
As one facet of these efforts, treasury stockacquisitions totaling ¥50.0 billion will be conducted over the period of the plan to quickly raise
return on equity (ROE) to 6% or more and increase
shareholder value.
Based on this policy, we acquired ¥15.0 billion
worth of treasury stock in the fiscal year ended
March 31, 2015, and canceled 40 million shares oftreasury stock. Since May 2015, we have been
conducting additional treasury stock acquisitions
with an upper limit of ¥20.0 billion.

Total Group Transactions—Indicator of Group Growth
Total amount of sales from Product sales
Retailing and Store
Rent revenues from fixed-term
Operation
rental tenants
Card shopping transaction volumes
Total transaction volumes
at external affiliatesfrom Credit Card Services
Cash advance transactions, etc.

Total Grouptransactions

External sales from
Sales to business partners
Retailing-Related Services outside GroupGross profit
Operating income

Fiscal year ended March 31, 2015

Utilization of Operating Cash Flow

Capitalinvestments¥30.0 billion –¥35.0 billion

Core operating
cash flow(excluding rise inoperatingreceivables)¥100.0 billion

Growthinvestments&
Shareholder
returns¥100.0 billion

Dividends¥17.0 billion –¥18.0 billion

Capacity for
additional shareholder returns¥47.0 billion –¥53.0 billion

FY2015–FY2017
Planned treasury
stock acquisitions ofapprox. ¥50.0 billion

FY2015¥15.0 billion
completed(40 million sharescanceled)
FY2016¥20.0 billion
completed(May 15–Aug. 31,
2015)*1 Eliminations under total Group transactions represent the deduction of credit card transactions recorded in Retailing and Store Operation.
*2 Earnings before interest, taxes, and depreciation and amortization

18

19

Message from the President

We Will Strive to Create New Valueby Transforming Our Business Model.
The development of MARUI GROUP up until today has been grounded in its unique business model thatmerges retailing and credit card operations as well as in the corporate DNA that inspires it to innovate andrespond to the changing times. Going forward, we will aspire to create increased corporate value by practicing
co-creation management, which entails advancing our business together with customers and employees.

Hiroshi Aoi
President and Representative Director
Representative Executive Officer

MARUI GROUP’s History and DNA of Innovation

Entering the 1990s, our “young, fashion, credit cards”
business model grew less responsive to market changes

My grandfather, Chuji Aoi, founded MARUI in 1931.

following the collapse of Japan’s bubble economy.

Then, our business involved selling furniture through

MARUI thus fell into a period of stagnancy. I becamemonthly installment payments. This was the original form

president in 2005. My mission at that time was to utilizeof the business model merging retailing and credit card

MARUI’s DNA of innovation to reconstruct our business

operations that MARUI GROUP still uses today, andmodel and enable it to create new corporate value in

MARUI’s business maintained this unique characteristic

tune with the times.

throughout its history. By pursuing the modernization of
the installment payment system, my grandfather grew

Quest to Create Corporate ValueMARUI rapidly, leading the Company to issue Japan’s
first credit card in 1960.
In 1972, my father, Tadao Aoi, took up the mantle of

Reviving our retailing and credit card businesses
required that we resolve a number of issues. The firstpresident. Under his guidance, we launched a new busi-

area I addressed after becoming president was theness in 1981 in which we leveraged our credit know-

innovation of credit card services. At that time, thehow to provide cash advances, a type of small-amount

impending revision of the Money Lending Business Act

consumer loan. In the mid-1980s, MARUI established ascheduled to begin in 2007 was making the future ofunique business model that combined youth fashion

cash advance operations uncertain. To respond to thiswith credit cards, the so-called “young, fashion, creditchange, in 2006, a year before the regulation’s revision,

cards” business model, which began to fuel brisk growth.

we launched the EPOS CARD, which replaced our previ-

By 1990, the Company had established a solid position

ous in-house credit card, the Akai Card (Red Card).

in the Japanese retail industry, as indicated by its 30
consecutive years of increased sales and income.

20

21

Message from the President

To Advance to a New Stage, We Are Transforming
Retailing Operations and Refining Our Business Model
That Merges Retailing and Credit Card Operations.

revise our previous store development practices, which

A United MARUI GROUP

entailed product lineups centered on youth fashion.
It was at this time that we began creating stores that

Throughout its history, MARUI GROUP has created cor-offered lifestyle support, devoting more sales floor area

porate value through its unique business model, merging

to sundry items and restaurants to win the support ofretailing and credit card operations, and it continues toa wider range of age groups. However, although thesefurther refine the strengths of this model. Looking at

efforts raised customer satisfaction and subsequently

segment earnings, we see that Credit Card Services is

EPOS cards hold a special license from Visa Inc.,

operations have now bottomed out, and the strides

visitor numbers, they also had the unexpected effectcurrently supporting overall performance, and it isenabling them to be used not only in Marui stores but

made in the Credit Card Services business in recentof lowering profitability.

expected to drive profit growth going forward. Still, we

also at Visa-affiliated stores worldwide. Leveraging theseyears have been greatly contributing to the creation of

Addressing this issue was quite difficult, taking sev-

cards, we implemented a strategy of compensating for

new corporate value. While it took a while, we are now

eral years. In the end, the answer was found in changing

business was built from the Retailing and Store Operation

the decline in cash advance revenues by expanding cardfeeling the benefits of the innovations pursued to date.

the format of stores. Up until that point, MARUI CO., LTD.,

business and could not realize its full potential alone.

had created department stores with earnings structures

shopping transactions, an area closely related to ourmainstay retailing operations.

Advance to New Growth Stage

However, the negative impact of the introduction ofcannot ignore the fact that the Credit Card Services

Accentuating this reality is the fact that 80% of EPOS

based on the consignment buying system. However, we

CARD applications are submitted at Marui stores. The

discovered that by transitioning toward shopping center

large portion of customers that apply for cards is a result

the Money Lending Business Act revision exceeded our

The next area in which I targeted reforms was retailingstyle stores, we could realize profitability even as weof the efforts of our employees, with their specialties in

expectations. In addition, due to lost income stemming

operations. Previously, our retailing strategies had beenshifted from fashion-oriented to lifestyle-oriented

retail, recommending cards to customers during theirfrom reduced interest rates, we were required to refund

focused on youth and fashion, both of which were areas

stores. This transition resulted in our core source of

shopping experience. In addition, EPOS cards are issued

interest collected from customers who borrowedthat Marui stores came to be equated with. We began aearnings changing from product sales to rent revenues,

on-the-spot in stores and can therefore be used imme-

money under the previous rates. This impact lingered forphased shifting toward new strategies when we opened

which is negatively impacting top-line sales. Profit,

diately. For this reason, the ratio of cardholders thatnine years, until 2014, and resulted in total losses of at

Yurakucho Marui in 2007.

meanwhile, is on the rise. We expect approximately 70%

actively use their cards is high. The link with retailingof floor space compatible with this new business model

operations is supporting the competitiveness of credit

least ¥100.0 billion to ¥150.0 billion. Over this period,

This probably goes without saying, but when Japan

we faced a harsh operating environment, recording

started seeing its birthrate decline and its population

to be converted to shopping center style stores by thecard operations. With regard to collaboration cards as

full-year losses twice.

age, the future contraction of the youth market was

fiscal year ending March 31, 2017. After this, thewell, the retail experience of our employees is making

apparent. Addressing this change was an urgent task for

Retailing and Store Operation business is projected tolarge contributions to increased value for collaboration

the Company. We therefore decided to drasticallyexperience a gradual increase in operating income.

partner facilities.

Meanwhile, card shopping transactions increased
steadily each year. Furthermore, cash advance

4897

2006

4897

GOOD
THRU
有効期限

有効期限
THRU
GOOD

MONTH / YEARMONTH / YEAREPOS CARD licensed by Visa Inc.

22

2007

2014

2014

Yurakucho MaruiFirst shopping center style store—Machida Marui

HUIS TEN BOSCH Collaboration EPOS CARD

23

Message from the President

Message from the CFO

Our Co-Creation Management Is Aimed atCreating Value the Likes of which Have Never Been
Seen before within MARUI GROUP by Sharing in
the Happiness and Emotion of Customers.

Overview of Performancein Fiscal Year Ended March 31, 2015

This business is locked firmly in a growth track, recording
double-digit growth in both total operating revenues
and operating income, and is expected to drive overall

The fiscal year ended March 31, 2015, was the first yearof the new three-year, medium-term management plan,
which is slated to end in the fiscal year ending March 31,
2017. Performance in this year was more or less in line

performance going forward.

Allocation of Entire Three-Year Operating Cash Flow
to Growth Investments and Shareholder Returns

with our targets, with gross profit increasing for the
At the same time, this relationship is proving benefi-of physical goods to the pursuit of more-fulfilling

fourth consecutive year and operating income rising

Under the new medium-term management plan, we arefor the sixth consecutive year.

working to improve corporate value through the imple-

In Retailing and Store Operation, while sales andmentation of growth strategies and financial strategies.

things to lifestyles and causing them to value individuality

income were down due to the impacts of the consump-

Our performance in the fiscal year ended March 31,

increase sales. Customers of Marui stores are also often

above shared experience. The days of mass consump-tion tax rate hike, performance still exceeded our targets.

2015, and the targets of the plan are as follows.

EPOS cardholders. Similarly, MARUI’s retailing expertisetion are over. As the previous seller’s market transforms

At the moment, we are working to improve profitability

is supporting credit card operations. It is this type of

into a buyer’s market, the tactic of pressuring consumers

by shifting away from our traditional department store

intrinsic link between the Group’s business and theto buy without considering their needs will cease tomodel, which primarily generated earnings through con-Group’s human resources that creates business value

be effective.

signment sales, to a business model based on shopping

cial for Retailing and Store Operation, as the option of­lifestyles, shifting the interests of consumers fromusing EPOS cards to enjoy shopping on credit is helping

The Group strives to practice co-creation manage-

center style stores with tenants on fixed-term rental

Organically, a United MARUI GROUP is somethingment, which means to thoroughly reinforce the concept

contracts. Plans in this area are gradually taking shape.

that has been realized naturally through the course of ourof creating together with its customers. I believe that

operations. In the future, however, we will intentionally

there is nothing more important than to maintain aand strategically build upon these links to further refine

stance of devotion toward incorporating customer

the strengths they create.

needs and creating value together and that thisnot found among rivals.

In Credit Card Services, total card transactions
exceeded ¥1 trillion in the year under review.

Management Performance and Targets
Operating income
ROE

FY2015 Performance

FY2017 Targets¥28.0 billion¥36.0 billion or more

5.2%

6.0% or higher

The financial strategies aimed at achieving thesetargets call for us to allocate the entirety of the ¥100.0
billion in operating cash flow projected to be generated

approach must be adopted whether developing stores,

Co-Creation Management

creating products, or providing new services. In thismanner, our co-creation management is aimed at creat-

Since its founding, MARUI’s Credit Card Services businessing value the likes of which have never been seen before

has operated under the basic belief that creditability

within MARUI GROUP by sharing in the happiness andshould be built together with customers. We do notemotion of customers. I am confident that creating value

assign credit to customers based on their age or theirwith our customers in this way will lead to improved

profession. Rather, it is something we build together withcorporate value.

customers through the trust we place in them. This belief

I would like to ask all our stakeholders for their on

inspires us to cherish the relationships with our various

going support and encourage them to look forward to

stakeholders, and it forms the foundation for our man-the future of MARUI GROUP with eager anticipation.

We Will Quickly Achieve Our ROE
Target to Improve Corporate Value.
To improve corporate value, we will allocate the entirety of operating
cash flow projected to be generated from the Group’s business togrowth investments and shareholder returns. Financial strategies will be
implemented to achieve a capital structure suited to the scale of profits.

agement practices that contribute to the developmentof both the Company and society. Once again, the focus ofJapanese society is moving away from the accumulation

August 2015
Motohiko Sato
Director and Senior Managing Executive Officer, and CFO

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Messages from the External Directors

Message from the CFO

over the three-year period of the plan to growth invest-

Looking ahead, we will continue to issue appro­

ments and shareholder returns. We thereby hope topriate returns to shareholders to increase shareholder

quickly achieve the ROE target of 6% or higher, aftervalue while achieving a capital structure suited to thewhich we will strive to swiftly raise ROE to 8% or higher

scale of profits.

and then 10% or higher in the fiscal year ending March
31, 2018, and beyond.
During this period, between ¥30.0 billion and ¥35.0

Total Group Transactions—New Management
Indicator for New Business Model

MARUI GROUP Is Not Attempting
to Duplicate the Successes of the Past
but Is Rather Forging a New Path throughBold Innovation.

billion of generated cash flow will be allocated to
growth-oriented capital investments in new stores, while

MARUI GROUP has been recently pushing forward with

¥17.0 billion to ¥18.0 billion is earmarked for share-

the transformation of its business model. This transition

holder returns and ¥50.0 billion is scheduled to be usednecessitated the introduction of a new management

for treasury stock acquisitions* . The increase in working

indicator to more accurately display management perfor-

capital for Credit Card Services is to be funded entirely

mance. Accordingly, we created “total Group transactions”

through external financing.

as a new top-line indicator that is effectively linked to1*1 For details, please refer to Acquisition and Cancellation of Treasury Stockon page 19.

Steady Enhancement of Shareholder Returns
through Dividends and Treasury Stock Acquisitions

ing policies for sales in Retailing and Store Operation,
introducing “revenue” as a line item to replace the previously used “total operating revenues.” These changes will
be applied to performance forecasts and reports for the
fiscal year ending March 31, 2016, and onward* .

ings over the long term, and we are therefore working to*2 For details, please refer to Introduction of New Management Indicator—
Total Group Transactions on page 19.

steadily enhance long-term shareholder returns throughstable and continuous dividend payments combinedExternal Director
President and Representative Director, FUJI KYUKO CO., LTD.

income growth. At the same time, we revised the account-2

We hope that our shareholders will maintain their hold-Koichiro Horiuchi

Structurally, the Retailing and Store Operation busi-

S

ince being appointed to the position of

from accumulating physical goods, represent

external director at MARUI GROUP, I have

major management issues needing to becontinued to actively provide management withaddressed. However, even in tackling thesesuggestions and advice, all while maintaining an

issues, MARUI GROUP is not attempting tooutside perspective. The role of an external­duplicate the successes of the past but is rather

director is generally to prevent management fromforging a new path through bold innovation.

falling into a sense of complacency and to exer-

Management’s current stance can be seen in theness accounts for the majority of the Company’s sales.

cise a restraint function to stop management fromtransformation of the retailing business model, theAs we shift toward shopping center style stores underbecoming overly inward looking or acting contrary

opening of the Group’s first store in Kyushu, andbeen increasing dividends in conjunction with perfor-

the new business model, our source of earnings will

to social norms. However, in the case of MARUI

the rapid development of EPOS CARD operations.

mance recovery, targeting a payout ratio of 30% or more.

change from product sales to rent revenues, resulting

GROUP, I do not feel this is an issue, as its corpo-

In the fiscal year ending March 31, 2016,

In the fiscal year ended March 31, 2015, cash dividends

in a decline in overall recorded sales. At the same time,

rate governance system is functioning soundly.

MARUI GROUP’s corporate governance system

per share were ¥19, up ¥1 year on year, making for athough, this transition is driving profitability improve-

payout ratio of 32%.

ments in the Retailing and Store Operation business andthe Group always pursues innovation, taking

reaffirm my own responsibility so that I may live

earnings growth in Credit Card Services, resulting in an

appropriate risks while adapting to the changing

up to the expectations of the Company’s share-

upward trend in gross profit and operating income. This

times. The Group has built its operating founda-

holders and other investors by contributing tosituation has caused inconsistency between trends intions on top of a business model that merges

improved corporate value.

with aggressive treasury stock acquisitions.
Since the fiscal year ended March 31, 2013, we have

Shareholder Returns and Payout Ratio

MARUI GROUP’s strength lies in the fact that

FY2013

FY2014FY2015FY2016(forecast)

Cash dividends
per share

¥15

¥18

¥19

¥22

the previously used top-line indicator, “total operating

retailing and credit cards. Accordingly, recent

Payout ratio

31%

32%

32%

32%

revenues,” and income figures.

operating environment trends, such as the aging

Total return ratio

31%

32%

125%

146%

We are also conducting treasury stock acquisitions.
In accordance with the aforementioned policy, a total of
10.7 million shares were bought back using ¥15.0 billion.
Leading up to March 2017, we plan to conduct a series

We anticipate that the newly introduced “total

population, declining birthrate, and departure

will enter into a new stage. Accordingly, I will

August 2015

Group transactions” will prove to be a highly viableindicator that accurately reflects management performance and progress under the new medium-term­management plan.

of acquisitions to repurchase another ¥35.0 billion
worth of stock in total. Furthermore, 40 million sharesof treasury stock, equivalent to 12.55% of total shares

August 2015

issued, were canceled in March 2015.
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I

believe that my duty as an external director

development of people with the development

is to provide suggestions on how MARUIof the Company contained in MARUI GROUP’s

GROUP can achieve sustainable growth andcorporate philosophy. Looking at its organiza-

realize medium-to-long-term improvements intion, MARUI GROUP respects the diversity of its

corporate value. In the past, I have supported

human resources, and it is implementing numer-

corporate transformations at numerous compa-

ous measures to create an air of dynamism innies as a management advisor. Calling upon thisthe organization, including assigning employees

expertise, I aim to support MARUI GROUP’s

to new professions. These efforts will no doubt

management to ensure that the Company

drive a steady increase in the Group’s corpo-

continues to grow steadily. Furthermore, I haverate value. I am completely onboard with thisspecialties in cultivating managerial candidates

approach, and I want to support managementand developing organizations, and I therefore

in building upon these efforts in the future.

hope to help create an environment that facili-

In regard to the Board of Directors, I feeltates that growth of employees from a manage-

that meetings need to go beyond simply

ment perspective.

approving and deciding on important manage-

From my viewpoint, the strength of MARUI

ment matters. Meetings of the Board of

GROUP comes from its organization, which

Directors should serve as forums for free andcapitalizes on the innovative minds of its

constructive discussion of management issues­management and the diversity of its humanand directives. In my capacity as an external

resources. Over the past several years, thedirector, I will strive to serve as a catalyst for

Company has been transforming the businessupbeat discussions and thereby make further

model for its Retailing and Store Operation

contributions to improved corporate value.

business. These efforts have been driven by acorporate culture that fears neither failure norchange, based on the sentiment of equating theAugust 2015MARUI GROUP’s Respect for the Diversityof Human Resources and Numerous Measures
Implemented to Promote Dynamism in
the Organizations Will No Doubt Increase
the Group’s Corporate Value.

Etsuko Okajima
External Director
Representative and CEO, ProNova Inc.

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