RYOHIN KEIKAKU CO., LTD.

Information Resources
Financial Information

Non-Financial Information

MUJI REPORT

Information on medium-to-long-term value creation
Securities Report (Japanese only)
Consolidated Financial Results
Investor Relations (website)

Sustainability (website)
https://ryohin-keikaku.jp/eng/sustainability/

https://ryohin-keikaku.jp/eng/ir/

Contents
Introduction

3
5
7

Our Philosophy
Our History
The Ryohin Keikaku Group in Numbers

Medium-term
Business Plan

Message from the President
Roadmap – 2030 Vision and Way Forward
Message from an Executive Officer

Business Strategy Global Strategy
Core Product Lineup and Procurement and Production Processes
A Community-Based Business Model
Corporate Culture Reform

Sustainability

MUJI’s Goals
A Leader in ESG Management

Basic Information Management Team

9
15
17
21
25
31
33
41
43
57

Messages from Outside Directors and Message from an Outside
Corporate Auditor
Corporate Governance
Financial and Non-Financial Highlights
11-Year Summary
Consolidated Financial Statements
Stockholder Information
Corporate Information
Global Network

61
65
71
73
75
79
80
81

Editorial Policy
This report is intended to lead to dialogue with stakeholders by presenting goals for medium-to-longterm value creation, management policies, business conditions, and other information based on thephilosophy and mission of Ryohin Keikaku, which is aiming to help create “a truthful and sustainable life
for all.”Note: In this report, amounts and number of shares that are less than one unit are rounded down, and all ratios andpercentages are rounded to the nearest whole number.

Scope of This Report	Consolidated subsidiaries and consolidated companies of Ryohin
Keikaku Co., Ltd.

Period Covered	Fiscal year ended August 2021 (September 1, 2020 to August 31, 2021)
Note: Information outside this period is reported when it is appropriate to show past
events and data or recent examples.

Forward-Looking Statements
This report contains forward-looking statements and projections. These statements and projections are based on the Company’s judgments at the time the report was
produced, and include risks and uncertainties. Changes in various factors could cause actual results to differ materially from forward-looking statements and projections
contained herein.

MUJI REPORT 2021

2

Introduction

Our Philosophy

Our Corporate Purpose
Our corporate purpose is to contribute to the realization of a truthful andsustainable life for all through our products, services, stores and businessactivities that consider the ideal relationship among people, nature andproducts, as well as a generous human society.

Our Two Missions
Mission 1: To provide products and services that are essential to daily life,
with genuine quality and ethical value, at fair and affordable prices.
Mission 2: T
 o serve each local region by making our stores community
centers that work with stakeholders to tackle local issues andmake a positive impact in the region.

Our Core Value
We make efforts to reduce our environmental burden and to respectindividual human rights through our manufacturing, services and actions.
Through our core value of “contributing to society and people” ouremployees and associates will proactively respond to issues facing society
and the Earth.

Our Management Policy
We will practice “public-interest and people-centered management,”
where each of our employees and associates contribute to the public
interest through our business activities and locally rooted stores, have asense of ownership and take leading roles in the community.

Enhancing Our Corporate Value
Through our activities, we will create a highly profitable business structure,
pay taxes properly and return profits to shareholders appropriately.
Furthermore, we will strive to create long-term value for the Company bymaking a positive impact on society together with stakeholders.

3

MUJI REPORT 2021

MUJI REPORT 2021

4

Introduction

Our History
History of Ryohin Keikaku

1995

1980

MUJI Tsunan Campsite opened

2013
Joined UN Global Compact
Launched MUJI passport smartphone app

Seiyu Co., Ltd., a Japaneseretail company, establishedMujirushi Ryohin (MUJI) as its
private brand

1986

2000

Production and procurement
started outside Japan1983

Ryohin Keikaku Co., Ltd.
established

Listed on the first section of theTokyo Stock Exchange
MUJI.net Co., Ltd. established(currently MUJI HOUSE Co., Ltd.)1989First directly managed store,
MUJI Aoyama, opened in Japan

1985

Social Issues

2007
2011
Found MUJI Aoyama opened

2005
MUJI (Shanghai) Company
Limited established2012
Muji Retail (Thailand) Co., Ltd. established

2014

Number of MUJI stores surpassed 400 bothin Japan and overseas

Made a new start with our“Second Founding”

2018

Operating revenue

Began sales of frozen food

MUJI Sino-Ocean Taikoo Li Chengdu, the global
flagship store in China, opened

2015
Began ReMUJI recycling initiative

2019
MUJI Ginza, MUJI Diner and MUJI HOTELGINZA opened

2020

2016
Entered the market in India as the first Japaneseretailer there

Established production management basein Vietnam
Launched MUJI passport Pay service

JPY

453.6 billion

Operating profit

JPY

42.4 billion

1980 -2000

2000-20152016-2020

2021-

Mass production, mass consumption andmass disposal

Social disparity, quality scandals andpopulation decline

Aging society, rural depopulation andlabor shortage

Climate change, natural disasters and changes in daily life andvalues due to COVID-19

Our Perspective
Activities

MUJI Yurakucho opened

Began business outside Japan(First store in U.K. and first store
in Hong Kong opened)

Mujirushi Ryohin Division
established within Seiyu

Business transfer from IDEE Co., Ltd.
First store in U.S. opened

2001

1991

2006

2021

2017

The relationship between daily life and things

How things should be(objects)

MUJI was created in 1980 in Japan as the antithesis of the consumptionsociety. In a booming economy, expensive brand-name products were gaining
popularity, but on the other hand, poor-quality, low-priced products were also
appearing on the market, causing a polarization in consumption patterns. In that
context, MUJI was conceived as a critique of this prevailing condition, giving nobrand (mujirushi) items the value of “good products” (ryohin) with the purpose ofrestoring a vision of products that are actually useful to customers andmaintaining an ideal of the proper balance between modern living and theobjects that make it possible. MUJI’s approach to manufacturing focused on
eliminating excess, and started from selection of materials, streamlining ofprocesses and simplification of packaging.

Eliminate excess

1980 -1988

Following the period of high economic growth, economic disparity widened as
Japan entered the 21st century. MUJI sought to give customers a sense of rational
satisfaction, expressed not with “This is what I really want,” but with “This will do.”We pursued an extremely rational manufacturing process to refine quality and strip
away frills. As a company that proposes a way of living, we also began offering
houses, which are a symbol of daily life.

Flexibility of use/
How things should be
1989-2000

Proven environmental
friendliness and reliability
2001- 2015

“A truthful and sustainable life for all”

“A truthful and sustainable life for all,” and beyond

With Japan’s population declining, the number of workers continued
to decrease until the mid-2010s. Since then, however, more women
have joined the workforce. As a result, the number of households
where both spouses work has increased, magnifying the need tosimplify and streamline housework. MUJI responded by providing
functional, streamlined products that help simplify and beautify
people’s lives with “conscience and creativity,” and has contributed tosolving social issues by proposing ideas for peaceful, relaxed living.

The increasing severity of natural disasters and the COVID-19 pandemic have dramatically altered people’svalues. We believe that we should rethink the way we live. MUJI will offer products that are useful and truly
essential, and are good for the environment, to producers as well as local communities at affordable prices.
We will also evolve our efforts to help solve local issues, and contribute to the harmonious coexistence anddevelopment of daily life, culture and the environment together with local communities. For the future, we are
picturing “a truthful and sustainable life for all” that promotes unique economic activities, no matter how
small, and a society with rich culture under the concept, “We’re in this together.”Emotions,
tranquility and relaxation

Sophistication
and rationality

Connection,agreement and empathy2021-

2016- 2020

From
products tolifestyleoptions

Household goods
and food

Innovationof store
opening strategy
and store
functionsApparelHealthcare(preventive careand well-being)

Food and
agriculture

Hotel

Furniture

Social capitalHomeappliances

BicyclesMobilesales

Culture and arts
Community
revitalization

Cosmetics
products

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MUJI REPORT 2021

Campsites

Houses

MUJI REPORT 2021

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Introduction

The Ryohin Keikaku Group in Numbers
In the 41 years since the creation of MUJI, we have continued to design and manufacture no-frills, quality products byfocusing on selection of materials, streamlining of processes and simplification of packaging. The foundation of our ideology
has not changed since MUJI’s inception, and like a compass pointing north, it continues to orient us toward the essential anduniversal aspects of daily life.

Operating Revenue

JPY

453.6 billion

Operating Profit

Operating
RevenuePrice revisions, food sales and opening of new stores in residential areas
drove growth in operating revenue.

ROE (Return on Equity)

17.3 %

ROE

JPY

42.4 billion

Number of MUJI Products

Operating
ProfitOperating profit was JPY 42,447 million as a result of ongoing efforts tocontrol SG&A expenses. Profit attributable to owners of parent was arecord JPY 33,903 million.

Approx.

7,500

Cumulative Total of Registered Membersof MUJI Passport and Other Apps

59.2 million

This number includes apparel, household goods and food items.

The MUJI passport app is now available in eight countries and regions, including
Japan (as of August 31, 2021). Registered members of various communication
apps have been included from the fiscal year ended February 2019 in Japan,
and from the fiscal year ended February 2020 in mainland China.

ROA (Return on Total Assets)

Percentage of Women in
Management Positions

Number of Local Cooperation
Agreements Signed

12.3 %

35 %*

20 *

ROA

ROE for the fiscal year ended August 31, 2021 was 17.3%. We are working to
improve capital efficiency with the goal of maintaining ROE at 15% or higher.

ROA for the fiscal year ended August 31, 2021 was 12.3%. We are working to
improve capital efficiency with the goal of maintaining ROA at 15% or higher.

There are 221 women in management positions, including store managers
at directly managed stores in Japan, accounting for 35% of all
management positions.

In our efforts to realize “a truthful and sustainable life for all,” we areengaged in various local revitalization initiatives together with local
governments and residents. As of October 31, 2021, we had 20
cooperation agreements with 17 local governments in Japan.

Operating Revenue by Product Category

Dividend Payout Ratio

Recycling of Textiles

Number of Stores with Water Refill Stations

31.8 %

66.9 tons/year*315

We are committed to returning profits to our shareholders with a target
annual payout ratio of 30% of consolidated earnings. The dividend forthe fiscal year ended August 31, 2021 was JPY 40.0 per share.

With the aim of building a recycling-based society, we have beencollecting textiles since 2010. We recovered 66.9 tons of textiles in thefiscal year ended August 31, 2021.

To reduce plastic waste, we have set up water refill stations in MUJI
stores. This is a free water dispensing service that uses tap water and isavailable to anyone who brings their own bottle. (As of August 31, 2021)

Number of Stores

Countries/Regions Where We Operate

Volume of Plastic Bottles Collected

FTSE Russell ESG Ratings

1,068 stores

32

729 kilograms*

4.2

We operate 497 stores in Japan and 571 stores overseas. This includes
licensed stores, Café&Meal MUJI and IDÉE. (As of August 31, 2021)

We operate in 32 countries and regions, including Japan. (As of August
31, 2021)

MUJI collects and recycles plastic bottles as part of its efforts to reduce
plastic waste. Used bottles of Toning Water and other products sold by
MUJI are collected for recycling in order to reduce plastic waste andmake effective use of petroleum-derived raw materials.

In June 2021, Ryohin Keikaku Co., Ltd. was selected for the first time asa constituent of the FTSE4Good Index Series and FTSE Blossom
Japan Index.

Other

Food

4.0%

12.0%

Apparel

37.3%
Household
goods

46.7%

*

* Ryohin Keikaku Co., Ltd. only

7

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8

Medium-term Business Plan

Message from the President
With our “Second Founding,” we will work to create a better world
100 years from now.
On behalf of all of us at Ryohin Keikaku, I want to express myof the value we provide, both among people outside thesympathies to the many people who have been affected by theCompany as well as to some extent within the Company, has

COVID-19 pandemic. I hope that the lives of everyone candiverged from our origins. In response, we returned to thereturn to normalcy very soon.

starting point of the Company and expressed this value incommon language that anyone can understand – ourWe are redefining our corporate purpose byreexamining the origins of Ryohin Keikaku.

corporate purpose. This is not a remake of the corporate

In the fiscal year ended August 31, 2021, the COVID-19

fit the times, but rather a redefinition that we thought

pandemic impacted our operations in various ways, including

appropriate after taking a fresh look at our origins.

purpose because the president changed, nor an adaptation toshorter business hours at stores, but strong sales in Japan andimproved earnings overseas led to growth in revenue and profits.
We introduced a new management structure in September
2021, which we consider our “Second Founding,” and began
by redefining our corporate purpose with the aim of creating abetter world 100 years from now. The medium-term businessplan we launched in July 2021 incorporates the actions we willtake in our “Second Founding.”

Ryohin Keikaku’s first mission is to provide
products and services that are essential to daily
life, with genuine quality and ethical value, at fair
and affordable prices. Ryohin Keikaku’s second
mission is to serve each local region by making
our stores community centers that work withstakeholders to tackle local issues and make apositive impact in the region.

Our corporate purpose is to contribute to therealization of a truthful and sustainable life
for all through our products, services, storesand business activities that consider the ideal
relationship among people, nature andproducts, as well as a generous human society.

These two missions are the basis for how we fulfill ourThis corporate purpose expresses the essence of Ryohin

on brand logos and symbols. In the context of manufacturing,

Keikaku’s existence and the kind of value we provide to society.

we commit to taking environmental and human rights issues

The reason we redefined our corporate purpose lies in theinto account in the provision of these products and services.

origins of the MUJI concept that Ryohin Keikaku has developed.

Our second mission is based on the philosophy that thecorporate purpose.
With the first mission, we provide products and services
that are essential to daily life, and are neither excessive nor
lacking in quality, but are just right – in other words, no-frills
products and services that retain their essence without relying

MUJI began as a social movement of “planning and manufacturing

stores that sell our products will serve not just as places ofBeing an indispensable part of daily life for people andtaking root in local society: These are two major themes
for us as we work to build the future together with local
communities.

the products that are essential to daily life from the perspective

business, but as gathering places for people in the region andof people, and promoting the distribution and use of thosecatalysts for connecting people to form communities. Store staff

products to build a better world.”

shall also voluntarily contribute to efforts to make the region better.

Nobuo Domae
President and Representative Director

MUJI started out in 1980 as a private brand of Seiyu Co.,

Ordinary retailers work to attract customers daily or weekly

Ltd. (now Seiyu GK) with nine household goods and 31 foodby spending money on advertising and offering discounts, touting

items that embodied the slogan “lower priced for a reason.”their great products or promoting their bargain prices. Ryohin

We manufacture products that retain their essence by focusing

Keikaku, instead of spending limited resources on advertising thaton selection of materials, streamlining of processes andmay provide only a short-term benefit, allocates resources tosimplification of packaging, even if the products are slightly

activities in which staff who work at our stores team up with local

different from common standards. This is the antithesis of theresidents to make their community better. In doing so, thebrand-driven consumer society, and is intended to liberatecommon (social) capital of community is formed. Our hope is thatpeople from superficial brands and have them consider what

through the resulting trust built in the area, MUJI will be chosen

true fulfillment really means.

for the products and services people use in daily life. We believe

In this way, for the past 40 years Ryohin Keikaku has been
involved in a social movement that takes the perspective ofthat with this approach, we can build relationships that are
mutually beneficial for local people and for us.

people. As our business has expanded, though, the perception

9

MUJI REPORT 2021

MUJI REPORT 2021

10

Message from the President

Contributing to society and thecommunity isn’t some idea we force on
our employees, rather it comes fromtheir individual desires and efforts tomake local communities better.
We want each employee to be anorganizational entity that works
autonomously and independently tocontribute to the community.

2030 Vision
To be an indispensable part ofdaily life for people
To realize thisvision, we will

To take root in local society●

Practice independent store management and co-owned management●

Provide appropriate online services●

Be a leader in ESG management

We want MUJI stores to be like the shopping streets of thepast – places where local residents come together, each with
their own thoughts and ideas. This creates greater connections
between people. The staff of MUJI stores become invested in
the ideas of local residents and work with them to respond to
local issues. That’s the role of a community center. As wedevelop these community centers throughout Japan, we will

activities, we will create a highly profitablebusiness structure, pay taxes properly andreturn profits to shareholders appropriately.
Furthermore, we will strive to create longterm value for the Company by making a
positive impact on society together with
our stakeholders.

For governance, in addition to governance based on theon the corporate purpose, missions, values and management

system that enables all stakeholders – employee shareholders,principles I have outlined here. Realization of the medium-term

MUJI “fan” shareholders, governments, local people andbusiness plan is in effect a contemporary social movement rooted

others – to participate in and monitor Ryohin Keikaku’s

in our core business and one that reflects our aim of creating a

activities. As a company that contributes to the public interest

better world 100 years from now. In addition, transforming theand practices coexistence and mutual prosperity withthinking and behavior of employees will in turn lead to a majortransformation of the organization itself.

increase the number of people who are inspired by MUJI

We recently established the management policy of “public-

communities, we will incorporate the perspectives andstores to contribute to local solutions and revitalization. Peopleinterest and people-centered management” in which every

opinions of stakeholders into management. Moreover, we will

will see MUJI as just the right place to find products essential

employee and associate will help to solve issues of local

further deepen the conditions that make it easy for customers

to daily life. These two missions may seem unconnected, butconcern and contribute to the vitality of each region.

to participate in governance as shareholders through stockthey share the same roots.

Conventional companies typically adopt a three-tiered
structure in which financiers hire managers, governance is

We make efforts to reduce our environmental
burden and to respect individual human rights
through our manufacturing, services andactions. Through our core value of“contributing to society and people” ouremployees and associates will proactively
respond to issues facing society and the Earth.

implemented, and managers hire employees and run the

In working to realize these two missions, Ryohin Keikaku

effective way to do that is to position employees andregards the idea of “contributing to society and people” as its

associates not as workers, but as players, as businesscore belief. This core value has always been referred to

managers and as shareholders who appreciate properinternally as our “Grand Strategy,” and is deeply rooted incontribution to the public interest.

everything we do.

We have formulated the medium-term business plan based

capital markets, we must create an omnidirectional governancesplits and shareholder meetings held after the General Meetingof Shareholders.

business. Ryohin Keikaku wants to change this structure to a“three-in-one” model in which everyone is an employee,business manager and shareholder.
Our vision is to establish highly profitable and sustainablebusiness operations in which employees who live in eachregion contribute to the community there. We believe an

To achieve this, we have introduced an employee stock
ownership plan (ESOP) to motivate employees to practicemanagement that contributes to the public interest, andWe will practice “public-interest and peoplecentered management,” where each of ouremployees and associates contribute to the public
interest through our business activities and locallyrooted stores, have a sense of ownership and takeleading roles in the community. Through our

11

MUJI REPORT 2021

thereby increase earnings. I believe that if employees hold acertain number of the Company's shares, it will heighten theirsense of ownership and managerial mindset, and increase their
incentive to contribute to the development of both society andthe Company.

MUJI REPORT 2021

12

Message from the President

The MUJI Brand
Now I want to briefly share my thoughts on MUJI as a brand.

perspective, and remaking and providing them with theAmong general brand-name products, there are occasionallynecessary quality, but without extra frills. We want to support

some that are priced higher than the intrinsic value of the itemthe essentials of daily life. In product selection, we will expand

itself based on a vague valuation of the brand logo attached. In

our lineup of products that are closely connected to people’scontrast, through MUJI products and services, Ryohin Keikaku

daily lives, and offer products that retain their essence. We willasks people to rethink their lifestyles with a more open mind

also review prices to make our products accessible toand honest eyes.

everyone, in every corner of Japan. To accomplish that, we will

From time to time, however, Ryohin Keikaku has also been

We recognize that our stores play a central
role in everything we do and will develop aculture and system of conscience andcreativity on a global scale.

thoroughly review specifications and manufacturing from theseen as a company that boosts revenue by selling a “brand.”most upstream point in the supply chain. We will open stores

We have been asked, “Even though MUJI is a brand based onin every part of Japan, in keeping with our wish to bring goodurban minimalism, as well as simple and stylish householdproducts, services and activities to as many people asproducts, and rarity is also important, why do you open stores

possible. When opening stores, our first thought is solving thein so many areas, and why are you pursuing expansion ofproblems of people in that region. In addition, this may meanFirst, we intend to change the Company’s culture, which isscale?” and “Won’t cutting the prices so much damage theconsidering mobile sales or the use of other companies’ sales

the foundation for everything we do. The culture we are aiming

in each area will help achieve the goal of having storesvalue of the MUJI brand?”networks. Before we know it, the daily lives of people living infor is one in which all employees have a sense of ownership,

operated by community managers and store staff with a sense

Rather than simply offering stylish appearance, MUJI

the town have changed for the better. Ideally, MUJI products

think with a managerial perspective, and tackle the challengeof ownership, which will boost business results and help achieve

wants to make the lives of many people better by rethinking

and services will be chosen as a matter of course and be usedof things that are new, interesting and true. We want a culture

regional revitalization. We will work to create conditions thatby more people.

where employees and associates are not just workers, butwill enable new Regional Business Unit managers andplayers, and where they can experience personal growth. A

community managers to steadily emerge, including those who

highly sociable, sympathetic and outward-facing culture where

put themselves forward, and produce results proactively andeach employee reacts sensitively to the world’s social issues

autonomously on a global level.

the essence of products and services from an ideal people

In store management, setting up a Regional Business Unit

In digital services, e-commerce when combined with stores

The Medium-term Business Plan Starting from Cultural Reforms

and takes the first step without hesitation. That is the kind ofenvironment in which no one is left behind, and there is a role

does more than just give a powerful boost to performance. It

Finally, I would like to talk about the priority areas of thedaily life. And in the town’s revitalization activities, we will also

for each person and a place where they can flourish. We aim toalso stimulates the creation of new businesses that invigorate

medium-term business plan.

be a leader in terms of reliability and societal impact.

become a company where employees accept and respect eachthe region, including the launch of secondary markets that

The three years starting in 2021 will be a period for laying aother’s values, regardless of position, and can constantly

reduce social costs, the launch of healthcare services centeredstaff be the most useful in each town where the Company

solid foundation to do that, and we have set the following fourchallenge themselves in pursuit of what is best for people andon the Healthcare Center and the launch of local experience

operates, in every corner of Japan. This means that we will bepriority areas of the medium-term business plan.

the Company.

services that lead to the use of local resources.

Ryohin Keikaku’s vision for 2030 is to have its stores andthe town’s top provider of products and services essential toPriority Areas of the Medium-term Business Plan
1. Develop exceptional and unrivaled products that are essential to daily life, and improve
procurement and production processes

For our business, our target is to capture the top
mindshare for products essential to daily life. To accomplish

contribution activities of stores, will bring in new talent to join

that, we will fundamentally review development andits existing staff, and through friendly competition staff there

production, down to the factory floor. In particular, we want towill achieve the highest professional standards. As a result,dramatically raise the competitiveness and mindshare of ourthey will become a team of professionals who actively support

core products, such as towels, bedding products, cleaning

stores in operating efficiently and autonomously.

and laundry products, kitchenware, storage products,
underwear, socks and personal care products.

2. Establish independent store management to create a community-based business model.
Accelerate new store openings under this business model, while maintaining profitability.
3. Develop a corporate culture in which all employees work proactively, driving independent
growth in each store, region and country

4. Build the business infrastructure and headquarters functions to support independent
store management and localization

13 MUJI REPORT 2021

Our headquarters, which supports the business and local

In store development, we do not limit ourselves to opening
stores only in commercial districts. We intend our store openings to
be a catalyst for new store and regional development that contributes

We will carry out the medium-term business plan as a
Company-wide endeavor to lay the groundwork for achieving
our vision for 2030.
I would like to thank our stakeholders for their continued
support of Ryohin Keikaku and MUJI.

to town revitalization. The pace we are aiming for is a net increase of
100 stores annually in Japan, and 50 stores per year in mainland
China, and we will develop the store management talent needed to
conduct that smoothly.

MUJI REPORT 2021

14

Medium-term Business Plan

Roadmap – 2030 Vision and Way Forward

2030 Vision
To be anindispensable
part of daily life
for people

Targets for 2024

To take root in
local society

Create the basis for our “Second Founding”

Actions

exceptional and unrivaled products that
1 Develop
are essential to daily life, and improve procurement

 ethink product lineup, quality, price and significance from the perspective ofRtheir use in daily life
● Contribute to regional development in production areas by strengthening
procurement and production process● Prevent inventory shortages and excesses by reinforcing supply chain management● Establish sustainable agriculture and food businesses and contribute toregional development● Launch the Space Design Office for renovation and space design● Launch a series of services to support people in their daily lives, including
those related to healthcare and organizing the homeand production processes

independent store management to2 Establish
create a community-based business model.

Practice independent store management
and co-owned management

Accelerate new store openings under thisbusiness model, while maintaining profitability

Provide appropriate online services
Be a leader in ESG managementa corporate culture in which all employees
3 Develop
work proactively, driving independent growth ineach store, region and country

Products
and services
essential todaily life

Stores ascommunity
centers

Regional
revitalization
through theactions of store
staff

User-friendly

digitalservices

3.0 trillion
Operating profit:
JPY 450.0 billion
Number of stores:
2,500
Average area of standard stores:
550 tsubo*
Online sales ratio:
30 %Operating revenue:

A corporate
culture inwhich allemployees
workproactively

the business infrastructure and headquarters
4 Buildfunctions to support independent store
management and localization●

 aunch of Regional Business Units to establish a community-based businessLmodel● Double the pace of store development by opening stores in residential areas● Improve store cost efficiency by opening stores in residential areas andpromote independent management● Strengthen digital team to build new services that support infrastructure suchas e-commerce, payment and logistics functions based on communication
betweens stores and customers●

 uild a top management team capable of leading our “Second Founding”
BTake new approaches to recruiting and training, and create new young leaders● Promote initiatives to pass down MUJI concepts to more people● Develop a proactive, independent and teamwork-oriented corporate culture● Establish systems to realize co-owned management●●

 trengthen human resources and improve the efficiency of headquartersSadministration departments● Strengthen IT team and ERP system● Structure logistics from the viewpoint of total social cost
● Build platforms to support business activities and the localization activitiesof stores● Establish risk management functions●

JPY

Operating revenue:
Operating profit:
Number of stores:

700.0 billion
JPY 75.0 billion
1,300

JPY

* 1 tsubo = 3.306 m2

15 MUJI REPORT 2021

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16

Medium-term Business Plan

Message from an Executive Officer
implementing various initiatives will enable us to reach thehelp to ask for in order to make an impact on society. In thatnumerical targets for operating revenue and store openings.

sense, a shift to diversity management is crucial, and will also
be our starting point.

Proactive and independent people andorganizations are the keys to our future

has the opportunity to display their abilities, effectively

As I mentioned earlier, during the first year of the medium-term

reflecting their competence and experience. Even if a company

business plan we will focus on transforming our people andpublicly claims to be contributing to society in a spirit of mutualorganizations as we accelerate store openings to build ancooperation, it cannot accomplish this objective if its internalorganization composed of people who work professionally andatmosphere is one of survival of the fittest, where the weak are

independently. Currently, we are focusing on mid-career hires,

culled, working hours are long and harassment is rampant.

but we are encouraging all employees to set ambitious goals

Unless we are a welcoming organization where diverse

for themselves and to take on multiple tasks in order to growemployees who share MUJI’s concepts respect each other andas professionals. I expect our mid-career hires to have a deep

work together, we cannot even envision a future that lies 100

understanding of MUJI’s values as the basis for mastering theiryears ahead, never mind achieve that future.

work and to inspire current employees to change the corporate

We will also create a working environment where everyone

In recent years, an increasing number of companies haveculture Company-wide. A culture (teams or individuals) of waiting

been talking about their future in terms of sustainability, thefor instructions is incapable of doing something that has never

SDGs or the like, but I think what will be required are

been achieved before. It requires a mindset and attitude oforganizations that are different in kind from those of the past.

acting proactively, independently and positively. To transform

Rather than looking at Ryohin Keikaku as a single ecosystem

into that sort of organization with high-level problem-solving

that undertakes everything on its own, we want to be acapabilities, we intend to raise the professionalism of eachcompany that is part of numerous ecosystems of small local

employee and revitalize our organization.

communities that work with our employees, contributing to the

There is no predetermined path for achieving the goals set

Ryohin Keikaku’s New Management Structure

forth in the medium-term business plan, so the way we go

Proactive and Independent People and Organizations Contributing to the Public Interest
Together with Local Communities

course, since we face market competition, they are likely to be

overall public interest through this organic collaboration. The

about it will be left to the capabilities of our employees. Of
forced to react as the occasion demands, without everything
going as planned. As employees continue fine-tuning to

Jun Yokohama

steadfastly produce results, those results will in turn improve

Executive Officer in charge of Overall Administration

their own capabilities. This will help them to achieve higher
goals and create a chain reaction with the surrounding

Focus of the first year of the medium-termbusiness plan: lay the groundwork for opening
100 stores annuallyorder to achieve our goal of having 2,500 stores in operation byenvironment. Only when they can do this will we be able to2030. To provide our complete lineup of products and services

achieve substantial growth. That will require true diversity inessential for daily life, we will increase the standard floorspace atour organization. Bringing together people with diverse values,

With a view toward 2030, our current medium-term business

new stores and raise the ratio of online sales. At the same time,backgrounds and experience has started to have a positiveplan has set targets for the fiscal year ending August 2024 of

we will contribute to local communities and implement more

impact in our organization in terms of broadening perspectives,

JPY 700 billion in operating revenue and JPY 75 billion in

localized measures to resolve the issues they face.

accelerating progress and raising productivity. When different

operating profit. Results for the fiscal year ended August 2021

Stepping up the pace of annual store launches in Japan

viewpoints are introduced, dissenting opinions and new

were JPY 453.6 billion in operating revenue and JPY 42.4

from the current 20 to 100 raises an important question: once

approaches arise. It will be important to determine how we

new “public-interest people-centered management” philosophy

billion in operating profit, so our targets for 2024 may appear

we have secured more locations and hired manager

become an organization than can positively accept thesethat Ryohin Keikaku aims for differs from the conventional idea

rather ambitious, but the plan is not based solely on achieving

candidates, how can we train our employees in a relatively

different ideas and to reflect them in our actions whileof a corporation. Under such management, employees who

numerical targets.

short time? In addition, more stores will necessitate a more

steadfastly preserving MUJI’s foundational concepts

are attuned to teamwork, mutual assistance, and creating

robust supply chain capable of stably manufacturing andand heritage.

good organizations and environments will steadily grow inside

Ryohin Keikaku looks ahead to a better future 100 years
from now and will conduct a variety of new initiatives tosupplying a sizable number of products while maintaining MUJI

Ryohin Keikaku, which is undertaking its “Second

achieve that vision. During the first year of the medium-term

quality. I believe that laying the groundwork for growth toward

Founding,” is adopting a new approach that entails enteringbusiness plan, we are focusing on human and organizational

achieving the targets of the three-year medium-term business

unknown territories beyond the boundaries of the manufacturingissues to lay the groundwork for opening 100 stores annually inplan – which includes accelerating store openings – andand retailing industry. This will require comprehensive

the Company, and these results will spread outside theCompany to connect with communities.

assessment of matters such as how to succeed and whose

17 MUJI REPORT 2021

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18

Message from an Executive Officer

The urgent task of establishing a
manufacturing and supply system thatmaintains MUJI quality

Contributions to local communities and a sense of inclusion

In our current pyramid-shaped organizational structure,and co-owned management.” For Ryohin Keikaku to offer better

have increased among companies and individuals in recent years,

information flow is one-directional and limited. We will replace thislifestyles in Japan, it is essential to move away from a centralized

facilitating promotion of local cooperation. As a company that has

structure with a system where employees can more readily andWe will accelerate store openings by establishing a systemorganizational structure to a management style based on an

conducted ESG management since its founding, Ryohin Keikaku

actively obtain information. Our ideal is for employees to be able

capable of efficiently handling planning, manufacturing andautonomous decentralized organization driven by individual

wants to further this trend. This is our vision for the new company

to complete their work by discovering problems, seeking help andsupplying affordable products. The system must eliminate waste

stores. Employees and stores will take ownership and conduct

we aim to become though our “Second Founding.”smoothly getting support from others, all on their own. Especiallywhile ensuring MUJI quality. Doing so will require new production

business and activities for society appropriate to their own values.

methods and process development based on deep-rooted

We will roll out this approach together with local stakeholders.

our stakeholders. We will create our own original ESG indicators

technology is significant in that it enables the resolution ofpartnerships with the manufacturers who supply us. For products

The second initiative is to “provide appropriate onlinefrom the perspective of public interest governance to utilize theproblems locally by connecting with others in ways that include

essential to daily life, for instance, our plans will incorporate theservices.” The information infrastructure is social overhead capital

governance of capital markets as we demonstrate Ryohin

the provision of information and support from headquarters.

concept of eliminating waste so that we make and sell only theand is not to be monopolized by anyone. Creating a profitable

Keikaku’s approach to governance.

products that are really needed. Moreover, maintaining constantsystem that everyone can use is key. Moreover, becoming

To conduct the initiatives mentioned above, we must first be

stores that Ryohin Keikaku is working to promote will raise theorder volume and high utilization rates at our suppliers’ factories

addicted to the convenience of digital technology creates ahighly profitable and have a sound financial foundation. In addition

efficiency of employees and stores. We also envision outcomes

will enable them to achieve ongoing profit and avoid unnecessary

mindless dependence on excessive convenience. Ryohin Keikaku

to increasing sales revenue, we will further strengthen our financial

including product development originating from individual stores,

capital investment. In this way, we will implement measures towill utilize digital technology appropriately to provide online

position while controlling financial risks by not allowing assets tothe building of relationships with business partners, and thebalance cost and quality while reducing environmental impact

services that retain human warmth and emotions. I will give

grow beyond our ability to manage them. We will carry out carefulcreation of local supply chains. The headquarters previously led

together with our suppliers.

specific examples of our use of IT later.

The first initiative is to “practice independent store management

For governance, we will build a framework that involves allwhen a problem occurs in a store, I believe the utilization of digital

The autonomous, decentralized management of individualand multifaceted consideration of the types of new stores we open,

development of core systems but going forward plans and ideas

There will always be defective products that do not meet

The third initiative is to “be a leader in ESG management.”

including regional and large-scale outlets. We will look to not justinitiated by individual stores will be incorporated into Company-

standards in the manufacturing process. If eliminating a defect in

ESG is in vogue these days, but even from our beginnings Ryohin

control risk, but also consider the impact on the surrounding area

wide plans, so they will be reflected in core systems as well.

a product that is off by 1 mm in the manufacturing process

Keikaku has made a number of commitments in this area.

and the long-term social and economic implications. Rather thandoubles the manufacturing cost, I wonder whether it really needs

For the environment, I already mentioned cutting back waste infocusing on Ryohin Keikaku’s profit alone, we emphasize local

programs are available. The important point in considering how

to be eliminated, or whether it is even a defect in the first place.

the manufacturing process. We also use raw materials with low

collaboration to achieve long-term growth together with

Ryohin Keikaku incorporates and utilizes them is the initiative ofFor example, some defective products could be sorted out atenvironmental impact and do our utmost not to use products orcommunities. For example, we consider it desirable to use theits employees. When there is no initiative, introducing software

stores and sold at a reduced price. If a product can still be used

packaging that harms the global environment. Since our products

opening of a store as an opportunity to revitalize the surrounding

merely as a mechanism will not work. Because of its relevance toeven if it is off by about 2 mm, we can sell it by carefully explaining

are used in daily life, we are particular about what is in them andcommunity, increase the number of local business partners,

our management and organizational structure, we will build ato the customer that selling rather than disposing of it will help to

packaging materials as well as their functions.

promote local production for local consumption, and create newmechanism using digital transformation (DX) to share our image of

employment. We intend to open stores with the potential

what everyone will do and how to actually do it.

reduce environmental impact. If customers accept this, we can

For society, Ryohin Keikaku has always valued relationships

underpinning these objectives to benefit everyone involved.

reflect the reduction in manufacturing costs in the product price.

of mutual cooperation. Conditions where only certain people

If quality standards in the manufacturing process are too strict,benefit do not last long. For example, opening a huge commercial

usable items might be discarded. At MUJI, we make a point offacility in a rural area increases convenience and enables cheaper

Ryohin Keikaku’s use of IT and approach to DX

purchasing and selling vegetables that are slightly damaged –purchases, but as a principle of competition the nearby shopping

We are currently developing a core system in Japan utilizing IT tootherwise they might go to waste. This philosophy is the same

district is likely to fall into disuse and end up shuttered, among

improve business efficiency and rolling it out to Group companies

for manufactured products.

other problems. If things are left to take their course, a downward

overseas via the cloud. Japanese employees previously developed

spiral will occur as the community declines, the town loses its

and operated systems locally, but now that we have reached the time

upstream to improve traceability. In addition to raw materials andcharm, the population decreases over the medium term,

for a renewal, we intend to establish global supply chain management.

other items, we also check that there are no issues such as child

employment opportunities are lost, and educational opportunities

labor. After first considering what is best for the Earth andwane. The result is a society where it is not pleasant to live.

In supply chain management, we will track the chain backpeoples’ lives, Ryohin Keikaku will place value on suppliers that

Therefore, as a private company, our employees will takeOf course, countless collaborative communication software

I believe that each of these improvements before us will leadto a new Ryohin Keikaku and lay the path to the future we envision.

One example is the MUJI passport app that can accessvarious information on MUJI. We will localize functions for eachregion as we roll the app out with the same interface all over theare dependable and observe the rules of society, regardless of theownership and work together with local residents andworld as a communication tool that connects customers withcountry or region of manufacture.

governments to resolve this problem. Independent store

MUJI. For customers, MUJI must be MUJI, no matter where inmanagement by employees will reflect the Company’s objectives,

the world they shop.

ESG management that is part of the heritage of
Ryohin Keikaku

and we will also take advantage of local governance by involving

We also intend to introduce digital technologies thatpeople in the community who share the same feelings. Furthermore,

fundamentally transform the way we communicate and work

To achieve its two core targets for 2030 of “being an indispensable

I am sure that Ryohin Keikaku can have a positive impact onwithin the Company. We believe that changing accessibility topart of daily life for people” and “taking root in local society.”society using the know-how, assets, and corporate image it has

Ryohin Keikaku’s information assets and content will further raise

Ryohin Keikaku will focus on the following three initiatives, the third

built up over the years.

the productivity and creativity of employees’ work.

of which relates to the ESG management that is a part of its heritage.

19 MUJI REPORT 2021

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20

Business Strategy

Global Strategy

Mainland China

We will be selective and concentrate resources in global businesses aligned with the operating environment

Stores and Businesses in Mainland China (As of August 31, 2021)of the countries and regions we serve.

We complement MUJI stores with hotel and space design businesses.

We will focus resources in mainland China until 2024. In addition, we are targeting growth in Taiwan,
Thailand, Hong Kong, and South Korea by replacing older stores and ensuring market-appropriate prices. In

MUJI store

Europe, we will redefine MUJI for a super-mature society, while in North America we will streamline

Flagship MUJI store

management and prepare for future growth.

HotelSpace design business

2030 Goals

MUJI
MUJI store
1-10 stores
無印良品
Flagship
MUJI store
無印良品
旗艦店
Hotel

Space Design and Hotels

MUJI
無印良品

Beijing

1-10 stores
1〜10店
11-30 stores
11〜30店11-30 stores

ホテル
Space design business
空間設計事業731-50 stores
31〜50店31-50 stores

Beijing
北京

Chengdu成都 1

Chengdu
1

3

1

7
7 6
6

6

4

8
'2

MUJI Hotel Shenzhen

Shanghai
Shanghai
8上海
38'2
3 4 '2
4

5
5

5

Kunming
昆明

Kunming

Shenzhen深圳

ShenzhenShenzhen Bao’an International
Airport Terminal 3

Flagship MUJI Stores• In Japan, we plan a net increase of 100 stores annually, centered on residential areas, over the next 10
years until 2030. We also plan a net increase of 50 stores per year in mainland China. These new stores willcontribute to the lives of customers throughout each country.
• We will expand our footprint in the crucial markets of Hong Kong, South Korea, Taiwan and Thailand by
ensuring market-appropriate prices and expanding our customer base. We will do so by achieving a net

1. M
 UJI Sino-Ocean Taikoo
Li Chengdu

4. MUJI GLCC Mall

2. MUJI Shanghai Huaihai 755 3. M
 UJI Nanjing House of
Fraserincrease of 30 stores annually in each country or region.
• Vietnam, Malaysia and the Philippines are among the Southeast Asian growth markets in which we will
focus on building bases.
• In Europe, North America and India, we will revamp existing stores as opposed to rapidly opening stores in
new areas. We will also collaborate with local stakeholders to realize our vision for life and society in the
super-mature societies of Europe and North America, and find the ways that MUJI can best contribute as aleader in ESG management.

5. M
 UJI Kunming Shuncheng 6. MUJI Qingdao Inzone
Shopping Mall
Plaza

7. MUJI Joycity Tianjin

8. MUJI Shanghai Umax

We launched our business in mainland China in 2005 with the establishment of wholly
owned subsidiary MUJI (Shanghai) Company Limited and the opening of the first MUJI
store. We then gradually began opening more stores, and had a total of more than 100 in
2013. We started marketing products designed for mainland China in 2019. Thanks to theOverseas Business Targets for 2024

continuous support of customers, we have 299 stores in mainland China, including 8
flagship stores, as of August 31, 2021.

2021/8Operating revenue:

JPY

156.6 billion

2024/8Operating revenue:

JPY

250.0 billion

History of Our Mainland China Business2005 MUJI (Shanghai) Company Limited established(Billion JPY)

Opened our first store in mainland China, MUJI Nanjing West Road

299

90
256

2013 100th MUJI store opened
2014	Opened our first flagship store in mainland China,

2017 Operating revenue exceeded JPY 50.0 billion

Began marketing products designed for mainland China
2021 Opened our eighth flagship store, MUJI Shanghai Umax

200

128
100

30

100

65

1

1

5

13

26

0

06
20 /2
07
20 /2
08
20 /2
09
20 /2
10
20 /2
11
20 /2
12
20 /2
13
20 /2
14
20 /2
15
20 /2
16
20 /2
17
20 /2
18
20 /2
19
20 /2
20
20 /2
21
/8

0

1

38

20

Airport Terminal 3

300

160

2018 MUJI Hotel Shenzhen opened
2019 	Designed the waiting area space for Shenzhen Bao’an International(Stores)

229
200

60

MUJI Sino-Ocean Taikoo Li Chengdu
2016 200th MUJI store opened

273

Operating revenue
Number of stores (cumulative)	Household and food products designed for mainland China
accounted for more than 40% of net sales

21 MUJI REPORT 2021

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22

Global Strategy

Status and Issues

Digital

We have steadily grown our mainland China business since its launch in 2005. We see further potential for growth and have

Significantly Expand the Online Sales Channel

significant capacity to open more stores in China. We will focus on key stores and our e-commerce business.

Ryohin Keikaku will strengthen e-commerce sales by leveraging its digital platform in mainland China. We will quickly

However, the pace of business expansion has slowed in recent

build our own database, establish our own membership program centered on WeChat by the end of 2022, andyears for several reasons.

implement initiatives to increase repeat purchase rates. We will enhance our brand image and brand awareness by

Our prices are thought to be somewhat high, which inhibits daily

consistently communicating with our customers and evaluating our brands to increase repeat customer rates.

purchases. Limited sales floor space also prevents us from offering afull lineup of products essential to daily life, so sales tend to be

Products Designed for Mainland China

concentrated on certain products.

Sales of household goods and food products designed for mainland China have increased to about 40% of sales andWe will therefore develop products for mainland China that areare steadily growing.

more relevant to local lifestyles, ensure market-appropriate prices and• We will expand sales of apparel, household goods and food products by revising the prices of products that are
essential to daily life.

open large-scale stores. We will also address the growing popularity of
ICT in China by strengthening communication using digital tools.
In this way, we will fulfill our two missions even in mainland China.

• We will further increase the ratio of products designed for mainland China by developing highly original products thatare typical of MUJI.

The eighth flagship store in mainland China, MUJI Shanghai
Umax, opened in January 2021

Key Strategic Areas• Expand product lineup and ensure market-appropriate prices• Promote localization• Open large-scale stores• Increase the e-commerce sales ratio• Increase development and manufacture of products inmainland China• Recruit more local people and enhance the organizationof subsidiaries

Sales Composition

Food

7%

食品

Others

2%

3.3%

その他

食品

0.6%

12.7%

Stoneware

Coffee mugs

Wooden frame sofa

Shirataki noodles

Outdoor/exercise wear

Recycled linen clothing

その他

0.9%

2024/8Household
goods

39%

2021/8

Apparel52%

The relative composition of apparel,household goods and food 2021
will not年
生活product lineup withinchange, but the
8月期
20.5%will.
these categories

衣類

26.0%

生活

33.9%

2024年
8月期

衣類

38.2%

New Businesses
In addition to MUJI’s product sales, we will also expand in business areas other than stores and products. These
include the space design business, which designs and develops various spaces, and the hotel business, which gives
guests a chance to experience MUJI products.
• We will also offer services such as interior design and furniture sales for rental apartments.

Establish an Organization Capable of Opening 50 Stores Annually by the
Fiscal Year Ending August 31, 2024

• We will develop more hotels that offer a great customer experience.
2024 Order Target: 8,000 Rooms (Cumulative)

We want to increase the number of people who appreciate MUJI by offering better and more ethical lifestyle proposals that are
unique to MUJI. We will therefore empower our organization and people to further enable autonomous operation of the increased
number of stores.

Core Initiatives• Our people in China will make decisions independently rather than rely on the headquarters to increase sales and the number ofpeople who appreciate MUJI. Headquarters will listen to the opinions of our people in China and support them by developing
sales promotion tools and introducing personnel systems.
• Targeting further growth in e-commerce sales, we will increase investment in e-commerce and member programs and maximize
use of our e-commerce platform.

Shanghai Baoshan Baolong Mansion designed inmainland China with MUJI com store

MUJI Hotel Beijing 2• Develop MUJI products for mainland China and revise the prices of frequently purchased products.

23 MUJI REPORT 2021

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24

Business Strategy

Core Product Lineup and Procurement andProduction Processes
Develop Exceptional and Unrivaled Products That Are
Essential to Daily Life, and Improve Procurement andProduction Processes
Basic Approach: Be Useful
In keeping with Ryohin Keikaku’s core value – “to contribute to society and people” – we are seeking to “be an indispensable part of daily
life for people” by 2030. To accomplish that, we are also reviewing our procurement and production processes, focusing on natural
materials that are good for people and the environment, and that are part of a highly ethical and transparent supply chain.

Goals for 2024 and Measures① Become No. 1 in competitiveness for products essential to daily life in terms of product lineup, quality, price and significance

Become No. 1 in Competitiveness for Products Essential to Daily Life:
MUJI’s Unique Product Development
Product Development Policy
Ryohin Keikaku continues to focus on the selection of materials, streamlining of processes, and simplification of packaging to manufacture
no-frills, quality products. We manufacture no-frills, quality products and select materials that take the global environment and producers
into consideration, eliminate waste in all processes, and provide customers with what they actually need, in the form they actually want.
In addition to adhering to this policy, we will encourage people to take part in ESG and promote awareness of ESG concepts
worldwide by adopting circular design for products and offering them at affordable prices as a leader in ESG management in 2030.

Three Perspectives(1) Selection of materials (2) Streamlining of processes (3) Simplification of packaging② Reduce the cost of products and contribute to regional development in production areas through the newly established Development &Production Division

Priority Initiatives③ Prevent inventory shortages and excesses by reinforcing supply chain management and by strengthening the Merchandise Planning Division• Offer all the products essential to daily life, including consumables and medicine④ Establish sustainable agriculture and food businesses and contribute to regional development• Enhance our selection of essential products used repeatedly in daily life

⑤ Launch the Space Design Office, which will focus on renovation and space design, to contribute to solving issues related to forests, theenvironment and people’s daily lives• Make our products sustainable. Promote reduced use of plastic and recycling. Improve working conditions at production sites.

⑥ Launch a series of services to support people in their daily lives, including those related to healthcare and organizing the home

Challenges• Taking the customer’s perspective, develop new products that represent MUJI’s concept in new categories

Interview

The medium-term business plan calls for accelerating the pace of store openings. That will require us to stably manufacture and supply
reasonably priced products while maintaining product quality and incorporating environmental considerations. Improving our organizational
structure and employee development system is also imperative.

Key Initiatives• Enhance the quality of items essential to daily life and make appropriate price adjustments• Review manufacturing and supply systems• Revise quality standards

Products Essential to Daily LifeWe will review our product lineup with a more people-oriented perspective, focusing on products essential to daily life, including underwear,
socks, T-shirts, towels, cleaning and laundry products, kitchenware, personal care products, storage products, and bedding.

Interview with a Product Planning Specialist(Household Goods)
Developing Products by Thinking about Daily LifeI am in charge of promoting the entire sustainability process from the development ofhouseware products, such as dishes, cookware, and cleaning and laundry supplies, to reuse
and recycling of household goods. This includes cooperating with all departments andsuppliers involved with the products at every step, from development and manufacturing, todisplaying products on the sales floor, until after they are finished being used. I am always
thinking about proposals for products that not only offer simplicity, but quietly excel in a
supporting role in daily life. When I picture a situation from daily life, I try to think about which
necessary items are not available at MUJI, and then brainstorm ideas for concepts, materials,
design, specifications, and so on with merchandisers and in-house and outside designers. In

Mariko Ohashi

that process, I also refer to the customer feedback contributed to IDEA PARK.*

Houseware Section Manager,
Household Division

Working toward a Circular Economy and Contribution to Communities
Since MUJI’s inception, we have pursued recycling-oriented manufacturing, examining products through three lenses: selectionof materials, streamlining of processes and simplification of packaging. We believe that creating new products comes with more
responsibility than ever before. That is why we develop products with a long-term perspective, even thinking about what
happens to the product after it is used.
Ryohin Keikaku seeks to be useful to customers in each region by “taking root in local society.” Opening stores in different
areas means that the lifestyles of our customers and the items they need will also be different, so we will focus on developing
products to fit their lives. In addition, by collaborating with departments I haven’t worked with yet and incorporating feedback
that hasn’t been used, I want to propose products that can support the lifestyles of the region’s various residents.
* A database of comments and requests from customers and stores

25 MUJI REPORT 2021

https://lab.muji.com/jp/ideapark/ (Japanese only)

MUJI REPORT 2021

26

Core Product Lineup and Procurement and Production Processes

Improving Procurement and Production and Solving Problems in Production Areas

Initiatives for New Businesses

In September 2021, we established the new Development & Production Division, which integrates the functions of the procurement and

Healthcare Business and Other New Service Businesses

production processes.

Ryohin Keikaku will launch services that help people manage their daily lives, suchas healthcare services and organizing their homes. We will commercialize thelaundry, repair, cleaning, and moving services that started as MUJI SUPPORT at
individual stores. We have already launched healthcare and health-related services
that are useful to the community, and also sell medicines in our stores. We also plan
to launch services that support people in various life stages, including decluttering,
end-of-life planning support, zero waste, and reuse of unwanted items.

Formerly, each division handled procurement of materials, but the new Development & Production Division will enable us to unify
policies and strategies for procurement of household goods, apparel and other merchandise as well as transactions with suppliers. We will
also take steps to ensure fair prices while maintaining quality, such as direct delivery from producers.

Procurement Policy
We work to select raw materials that are collected and cultivated in a way that does not impose an excessive burden on the Earth, animals
and plants, and producers.
Furthermore, for primary raw materials, we use materials that can be traced back to the production area as much as possible, andabove all, we actually visit the production areas to check with our own eyes the conditions of collection/cultivation sites of major raw
materials and the lives of producers.

• Laundry, repair, cleaning, and moving
businesses• Medicine sales, and healthcare and healthrelated services• Decluttering support, end-of-life planningsupport, zero waste, and reuse of
unwanted items

Special Feature

Healthcare Center

Key Initiatives• Ensure that each product group is procured and produced in the right locations to achieve cost reduction and appropriate quality• Increase efficiency in production process by standardizing production in factories. Make appropriate production adjustments during
the period.
• Develop primary and secondary industries in production areas and improve the lives of people living there, thus contributing to local
economic development

Inventory Control Measures
Keeping track of inventory information was always possible in the past, but as a function, it was a weak area because we had no divisionthat controlled it in an integrated way.
To address that issue, we consolidated the inventory control functions of different merchandising divisions,* and centralized them in the
Merchandising Planning Division in 2019. This division works to strengthen control of profitability. It monitors the sales progress andinventory levels of each product and makes price reductions when necessary.
* Merchandising divisions: A general term referring to the Apparel Merchandising Division, Household Division, and Food Division

Merchandise Turnover (Annualized)

2019/22.28

2020/81.87

2021/8

2.19

Range of Service from Disease Prevention to Sales of Medicine
In July 2021, the MUJI Naoetsu store in Joetsu City, Niigata Prefecture opened the in-store Healthcare Center, which provides
services ranging from disease prevention to sales of medicine. We launched this service to enter the health field centered onproviding products, information and services that support healthy living.
We aim to provide one-stop product and service solutions ranging from health-related events and publishing of information
to sales of medicines, in cooperation with Qol Holdings Co., Ltd., which operates pharmacies throughout Japan, and Tanita
Corporation, a manufacturer of scales and other measuring instruments.
The Healthcare Center sells products with a focus on foods offered by MUJI (snacks with less than 10 grams ofcarbohydrates and high-protein snacks). We will develop it as a local community center where anyone can drop in.
Prevention

Key Initiatives• Have the Merchandise Planning Division train store managers on sales and purchase orders planning to prevent inventory shortages andexcesses at stores

Treatment

Livingenvironment• For each product, reorganize inventory storage bases and inventory quantities in line with sales volume fluctuations, lead times and costs• Prevent inventory shortages and excesses by synchronizing management plans with sales plans, production plans and procurement planson an SKU-by-SKU* basis

Maintenance

Maintaina healthy condition

EatingExercise
Sleep

Traditional
Chinesemedicine

Sanitary goods

Pharmaceuticals(disinfection, etc.)

Skin careproducts
Quasi-drugs• Restructure the planning information system to meet the needs of sophisticated business processes

Heal the bodywith treatment

Herbs

Supplements* SKU: Stock keeping unit. The smallest unit available for ordering and inventory control.
Protect the body from external factors

Heal illnesses and injuries

Ryohin Keikaku

Partner companies
Healthcare Center

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Core Product Lineup and Procurement and Production Processes

Space Design Business

Agriculture and Food Businesses

Ryohin Keikaku is stepping up its efforts related to design of comfortable living spaces in order to be an enduring, useful presence in the

Ryohin Keikaku views agriculture as a form of social common capital that plays an important role in regional revitalization, and wants tolives of local residents.

create a system to make it permanently viable.

In doing so, we think of the town as a whole as “the space where we live,” and will strengthen the space design and renovation
business, which extends from forestry-related issues to people’s daily lives.

Because the islands of Japan stretch a long distance from north to south, the agricultural products that can be harvested vary widelyfrom one region to another. Through traditional vegetables and specialty foods from local areas, we will work to connect producers andcustomers. This will lead to local production for local consumption.

Key Initiatives• Launch design, renovation, interior work, construction management and construction business for homes, business offices, and public facilities

Ryohin Keikaku is also cooperating with local governments through its nationwide community managers. We are carrying out projects
to address local issues in the fields of food and agriculture, and to rediscover the appeal of each region.

• Space Design Office will design lifestyles, local revitalization initiatives, and work styles, in addition to physical space design• Cooperate with the forestry industry and local governments in the procurement and production of materials, and turn it into a business.
Contribute to solving forestry-related issues.
• Establish an organization capable of implementing the above initiatives by hiring professionals and collaborating with business partners

Key Initiatives• Create a manufacturing and retailing business that is connected to local agriculture and centered on food. Conduct operations on aregional basis in cooperation with local governments.
• Launch a food delivery business that applies preservation techniques such as freezing. Tie business to home monitoring services.

Special Feature

Housing Complex Renovation Project
The Ryohin Keikaku Group has carried out renovations ofapproximately 1,000 units in housing complexes in cooperation with
the Urban Renaissance Agency (UR). Based on the concept of “making
the best use of the available space,” the renovated rooms offer a highdegree of flexibility, which has made them popular among younger
customers in particular, and helped to increase the occupancy rate.
In March 2021, we entered into a partnership agreement with UR
not only for renovation of units but also for revitalization of entire
housing complexes including renovation of common areas, formationof communities and dissemination of information. This initiative
started with Hanamigawa Housing Complex in Chiba Prefecture. We
are renovating the shopping street in the center of the complex andpromoting community formation to encourage interaction among
different generations and contribute to local revitalization.

Special Feature

Unsorted Apples
In light of the declining agricultural population and aging of producers inJapan, and with the aim of eliminating or reducing labor as much as
possible, we have been talking with producers and looking at ways toimprove existing processes. As a result, MUJI started selling unsorted
apples. This initiative helps to eliminate excessive production processes,
including the process of reddening (e.g., using reflective sheets, rotating
the fruit or picking leaves to expose the fruit to sunlight); sorting apples
by appearance (screening for scratches and unevenness in color); andsorting apples by size (reducing the process from seven levels to three– large, medium and small).
Every year since 2019, we have partnered with a farm in Hirosaki
City, Aomori Prefecture, to sell apples at MUJI stores in Japan, even if
they fall short of the regular standard due to misalignment, unevenness
in color, and scratches and spots.

Creating Spaces Based on Community Co-Creation
Leveraging MUJI’s experience and expertise, we were put incharge of the space design of Shibuya Neuvola Jinnan Child-rearing
Support Center (commonly known as “co-Shibuya”) located on thesecond and third floors of Shibuya Ward Child-rearing Neuvola, apregnancy, childbirth and childcare support facility supported by
Tokyo’s Shibuya Ward.
The concept of Shibuya Ward Child-rearing Neuvola is to “Meet,gather, talk and connect. Raise children as a community.” In line withthat concept, we provided a design featuring the warmth of wood tomake it a rich community space where people of various generations
and personalities can connect with each other.

We will expand and further promote the multiple projects underway, taking profitability and the benefit to local communities into
consideration as we work to establish them as businesses.

Consultations about space design and renovation from throughout Japan are accepted at the Business Counter of MUJI Tokyo Ariake in Koto
Ward, Tokyo.

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Business Strategy

A Community-Based Business Model
Establish Independent Store Management to Create a CommunityBased Business Model. Accelerate New Store Openings under This
Business Model, while Maintaining Profitability.
Basic Policy: Create a community-based business model and establish a system that enables a netincrease of 100 stores annually
We will build a system for realizing a net increase of 100 stores annually in Japan and 50 stores per year in mainland China by 2024.
To do that, we will focus on expanding the floor space for products essential to daily life as well as the e-commerce ratio of suchproducts, and on creating a community-based business model centered on independent store management. We will also make system
reforms and review store operations to empower the staff who manage individual stores to make full use of their abilities.

2021/81,002 stores

2024/81,300 stores

Goals for 2024 and Measures1) E stablish a community-based business model through the newly launched Regional Business Units2) D ouble the pace of store development by opening stores in residential areas, with the goal of a net increase of 100 stores annually inJapan and 50 stores per year in mainland China
3) Improve store cost efficiency by opening stores in residential areas and implement independent store management. Offset the strategic
reduction in the gross profit margin due to price revisions.
4) E stablish a professional digital team to go beyond regular e-commerce to build new services, such as agriculture and food-related andsecondary market businesses, in sync with stores

Store Opening Plan
Store Opening Policy

Store Expansion Concept

Our policy for opening stores is to consider profitability and carefully selectareas where we can create a long-term growth story with the community incooperation with local residents.

Number of stores

2021

2024

2030

1,000

1,300

2,500

Stores Located Next to Supermarkets

Store Opening Plan
In our plan leading up to 2024, for a population of 600,000, we envision having
one store of 2,000 tsubo (JPY 2.5 billion in sales) offering the full range of
products and services necessary in everyday life as the “Everything for Everyday
Life” store; six standard stores of 600 tsubo (JPY 1.0 billion in sales) next tosupermarkets, plus stores in front of train stations, inside of convenience stores,
and new home delivery services. Our goal is total sales of JPY 9.0 billion per
600,000 people.
In the fiscal year ended August 31, 2021, we expanded store openings inresidential areas, particularly stores next to supermarkets. In the fiscal year
ending August 31, 2022, we are continuing to expand store openings inresidential areas, as well as opening large stores that will serve as local
community centers.

Opening

Store Name

Name of Neighboring
Supermarket

April
2019

MUJI
Nonoichi Meirin-dori

Albis
Meirin-dori store

April
2021

MUJI
TSURUYA Shiojiri-Hirooka

TSURUYA
Hirooka store

July
2021

MUJI
Yorktown Mito

York Benimaru
Mito Motoyoshida store

Sept.
2021

MUJI
Tobu Dobutsu Koen
EkimaeTobu Store
Tobu Dobutsu Koen
Ekimae store
All standard stores

Store Openings by 2030

Challenges
A key to achieving the medium-term business plan is employee autonomy. We will focus on shifting from a centrally managed,
administrative control-type organization to an autonomy-driven, independent organization that can further expand cooperation andcollaboration with communities. We will then link this to human resource development to strengthen our organizational structure.

Key Initiatives• Develop new stores suited to the area and resolve local issues by appointing enthusiastic regional business managers• Establish human resource and organizational system capable of opening stores in residential areas and carry out regional development
and town revitalization activities• Strengthen personnel and education systems to realize independent store management as well as increase productivity and improve
efficiency of store operations• Strengthen recruitment of outstanding human resources and offer original digital services

Establishing a Community-Based Business Model: Initiatives for a Stronger Organization

MUJI TSURUYA Shiojiri-Hirooka

MUJI

Supermarkets

Furniture and appliances

DrugstoresHome centers

One objective of our 2030 Vision is “to take root in local society,” and we established Regional Business Units in September 2021 in ten areasof Japan to pursue that objective. Each Regional Business Unit is a task force for expediting store openings by engaging and cooperating withresidents and governments, and building a business model tailored to the needs of the region. Unlike conventional area management, their role

Toward Independent Store Management: Measures to Increase Productivity and Improve Efficiency of Store Operations

will be not to manage by looking at each individual store, but to manage the area as a whole to make MUJI an integral part of communities.

Review of Personnel Systems Related to Store Staff

This will enable larger-scale initiatives that individual stores could not handle alone.

In order for stores to serve a role as local community centers, address issues with stakeholders, and have a positive impact on thecommunity, it will be necessary for a proactive, independent and teamwork-oriented corporate culture to take root in stores. To foster that
culture, we established new posts so that store staff who live in the area and support and work at our stores can aspire to become
store managers.

Until now, Ryohin Keikaku has opened stores mostly in and around urban train stations and incommercial facilities. Going forward, though, we will expand store openings in residential areas, such as
next to local supermarkets, which will reduce expenses by streamlining the cost of equipment, store
operating costs and logistics expenses.

10 Regional Business Units• Hokkaido• Chiba/Aizu• Gunma• Ibaraki• South Yokohama• Gifu• Hokuriku• Kinki• Shin-etsu• Hiroshima

In addition, we will aim to make our stores an essential presence in the area by serving as community
centers that work to solve local issues with minimal advertising, and provide a place for people to go indaily life.
Based on this concept, we have been opening or renovating community-based stores, starting with
MUJI Aeon Mall Sakai Kita Hanada in 2018 and MUJI Naoetsu in 2020. By applying what we learned fromthose efforts to the next store openings, we are improving the profitability of our business structure.

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Business Strategy

Corporate Culture Reform
Develop a Corporate Culture in Which All Employees Work
Proactively, Driving Independent Growth in Each Store,
Region and Country

Strengthening Recruitment
Recruiting Policy
As we undergo significant change with our “Second Founding,” we will create a more dynamic organization by bringing in diverse people,
values and ideas.

Basic Policy: Develop the people and organization to drive realization of our “Second Founding”
based on public-interest and people-centered management
We will transition to an organization made up of people who are highly motivated by the MUJI philosophy and are eager to acquire thenecessary skills/stance and pursue opportunities. By doing so, MUJI will be able to play a useful role in society and increase its social
significance in each country it operates in.
Steps to Becoming a Company That Is Useful to Society
Resonance with values

Growth of people andorganizations

Growth of business

Provision of a truly
affluent life

A company that isuseful to society

In September 2021, we began year-round recruitment in which we opened our doors to hiring new university graduates at any time,
regardless of the job-seeking season. We welcome not only students who plan to graduate soon, but also first- and second-year university
students and people who have graduated and have some work experience. In addition, we are focusing on year-round recruitment of
mid-career professionals, who accounted for more than 50% of new hires in the fiscal year ended August 31, 2021. By actively recruiting
professionals who have worked in various fields, we will further strengthen and invigorate our organization.

Company Information Sessions
We conduct Company information sessions remotely once a month. These are not unidirectional explanations from the Company, butrather opportunities for two-way communication and direct dialogue. The president participates in every session.

Goals for 2024 and Measures
1) Build a top management team capable of leading our “Second Founding”

Ideal Candidate Profile for New University Graduates2) P roduce a large number of managers/executives by hiring professionals, strengthening
training programs, and selecting people for promotion

1. customers through our products, services and activities.

3) Promote initiatives to communicate and pass on MUJI’s philosophy to all employees4) Develop a proactive, independent and teamwork-oriented corporate culture5) Establish systems to realize co-owned management

Someone who wants to help enhance the essential aspects of the lives of

2. solutions, and take action to be useful to society and people.

Having many employees who are deeply sympathetic with MUJI’s ideals, concept and business is one of our strengths. However, we have ashortage of people who can contribute in core roles. We will therefore bring in people with diverse values to create a more dynamic
corporate culture, and use that culture to develop independent-minded human resources as professionals.

Key Initiatives

Someone who can create a vision for a better world

person of any nationality or gender who has a clear ambition, has a vision to
1. Arealize
a better world, and can carry it out while engaging colleagues.

Someone who can respond sensitively to social issues, think about

3. achieve it.

Someone who can create a vision and proactively involve others to

Challenges

Ideal Candidate Profile for Mid-Career Professionals

4.

Someone who wants to quickly stand on their own, and never stops growing.

5. cooperate and contribute to the growth of others.

Someone who can understand different ways of thinking and values,

6.

Someone who tries to make honest, ethical and correct decisions aboutcolleagues, other people and work.

Someone who has professional knowledge and experience

who has professional knowledge and experience cultivated in a specific
2. Aareaperson
or field, and can take on new challenges while collaborating and co-creatingwith current employees.

Someone who has initiative and can proactively engage withothersthe customer, cooperate with people in other areas and fields, regardless of
3. ofhierarchicalrelationship or affiliation, and lead current employees while taking action

A person who can perceive the true nature of problems while taking the perspective
proactively and independently.

Someone with aspirations and who enjoys change

person who will enjoy participating in the business growth and expansion of a
4. Achanging
Ryohin Keikaku as a member of our “Second Founding.”• Strengthen Recruitment
We will hold company information sessions throughout the year, and recruit 150 store manager candidates annually including new graduates
throughout the year. In addition, we will hire 200 people, or about 30 percent of our headquarters staff, to work closely with the existing staff

Recruiting Results

and enhance the professional skills of our entire workforce.
In regional operations, we plan to produce 100 community managers each year, who will contribute to solving issues concerning the
public interest.

2020/2

2020/82021/8

Number of new university graduate hires

116

200

32

Mid-career hires

57

52

43

Ratio of mid-career hires to total new hires

33%

21%

57%

• Enhance Human Resource Development
We will establish a career path where the standard is to become a store manager after two years, and outstanding employees can become

Interview

executive officers even while in their 20s. Additionally, we will establish training programs for all employees on product management, store
management and administrative management, all of which are necessary skills for a retail business owner. Wherever we operate, we will
recruit local candidates for store managers and train them to become future management executives.

• Revise Systems to Develop a Proactive, Independent Corporate Culture
We will change the personnel system’s structure to one in which stores are the star player, and are rewarded for making their own plans,demonstrating leadership, and assuming responsibility for producing results. Also, we will conduct an employees’ conference where we will
share management information and discuss Company-wide management with all employees so they can exercise governance over management.
In addition to the standard governance model, we will establish a framework of governance by four entities: the Board of Directors, theAdvisory Board, employee shareholders, and local communities.

Comments from a Mid-Career Hire
In my previous job, I was in charge of digital business such as e-commerce and apps at a retailer with1,000 stores in Japan.
The EC & Digital Services Division is a unit that conveys the appeal of MUJI through e-commerce,
MUJI passport and other digital services. Since I joined the Company, I have started recruiting people tobuild our digital organization and have been focusing on making service improvements.
The work is challenging to anyone who has an interest in digitally supporting MUJI’s “Second Founding.”

Tomohiro Yamauchi
Joined April 1, 2021
EC & Digital Services Division
Sales and Marketing Group

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Corporate Culture Reform

Human Resource Development and Corporate Culture Reform

Initiatives to Realize Co-owned Management

Human Resource Development Policy

In order to achieve co-owned management, it is important that our people have the three roles of employee, manager and shareholder. To

Ryohin Keikaku has implemented a variety of initiatives to create a culture in which all employees and staff members are challenged to set
high goals, work hard, and feel a sense of fulfillment when they achieve them. This contributes to individual growth and improvement ofprofessional knowledge and skills.
Now, with our “Second Founding” under way, we will focus on shaping our human resources and corporate culture so that every
employee can act proactively and independently, and aim to participate in the Company’s business as someone with management
knowledge and experience.

Store Manager Cultivation Project
In order to prepare MUJI employees to become store managers in the third year of their career, this program provides on-the-job training at stores,
as well as training to help employees develop the necessary skills and ways of thinking over a two-year period. The project, which began in 2019,provides a total of 37 days (approximately 260 hours) of training. Currently, approximately 340 employees are participating in this project, and since2019 a total of over 1,600 hours of training has been provided, producing 84 store managers. (As of August 31, 2021)

Lifestyle Organizing School
The Lifestyle Organizing School was launched in 2018 around the theme of cultivating “lifestyleeditors” who possess MUJI’s sense of seeking to be an ideal inhabitant. It is an internal training
program to develop “lifestyle editors” who have the sense and intellect to discover the charms offoster ownership in each employee, we are actively sending out management information and increasing opportunities for communication
between management and employees. We are also expanding the employee stock ownership plan,* and the number of employee
shareholders is increasing every year.
* This is an incentive plan mainly for Group employees who are residents of Japan.

E-ship (Trust-type employee stock ownership plan)
Dividends may be paid after three years according to the share of contributions to the employee shareholding association. This is expected
to foster employees’ sense of purpose for raising Ryohin Keikaku’s medium-term stock price.

J-ESOP (Employee stock ownership plan)
Shareholding association incentive points are granted based on the stock benefit regulations for the amount of contributions to theemployee shareholding association, and the accumulated points are paid as shares at the time of retirement. At the same time, weestablished “Challenge Expectation Points,” which are not conditional on membership in the shareholding association. Points are awarded
for taking on challenges at a high level. The program is expected to raise the level of commitment of employees and encourage them totake on challenges, which in turn will lead to Ryohin Keikaku’s long-term growth.
Number of Employees in Employee
Shareholding Association
As of August 31, 2020

As of August 31, 2021

1,425

1,750

local life and propose value based on those charms. Participants visit local communities, communicate

Short term

Fixed salary+
Annual bonus

Medium termLong term(3 years)(upon retirement)

E-shipJ-ESOP

Shareholding
association

Shareholding
association

Challenges
Expectations

with “local heroes,” local governments and residents who are active in the community. They thenpropose business plans to attain a better life in the area. Since 2018, four sessions have been held,
and about 65 employees participated in these sessions.

Good Meeting“Good Meeting” is our term for an assembly that raises the sense of ownership among

Special Feature

Lifestyle Organizing School: “Tobu Dobutsu Koen Project”
We held the Lifestyle Organizing School project in Gifu City, Gifu
Prefecture (fall and winter 2018), Sakata City, Yamagata Prefecture(summer 2019), and Joetsu City, Niigata Prefecture (fall 2019). The
Tobu Dobutsu Koen Project, held in Miyashiro and Sugito, Saitama
Prefecture (fall 2020) was conducted for the fourth time.
This project took place prior to the opening of the MUJI Tobu
Dobutsu Koen Ekimae store. A total of 22 people participated,
including staff members of Tobu Railway Co., Ltd., Tobu Store Co.,
Ltd. and the Miyashiro Town Hall, as well as members of Ryohin
Keikaku who came from stores based on an internal application
process. Members were divided into three teams, and each teamwent out to various places in the community to meet with people.
They got to know the area while lodging together and attended
workshops aimed at solving local issues.
The training focused on working on the development and proposal of a business plan for solving issues in the station-frontarea, and coming up with ideas on how MUJI could play a useful role. On the last day of the training, members presented theirbusiness plans in front of the mayor of Miyashiro and executives of businesses involved in the project. The ideas in thesepresentations were incorporated into store development based on the concept of “a place to create something with thecommunity,” and in September 2021, MUJI Tobu Dobutsu Koen Ekimae opened next to the Tobu department store.

35 MUJI REPORT 2021

Group employees and challenges them to achieve management targets. Thesemeetings are held once every six months, and include sharing of Group-wide initiatives
for the past six months, product awards determined by employee voting and theintroduction of new store managers.
The first such meeting included presentations of initiatives from regional business
managers, and participants asked many questions so that they can apply thoseinitiatives in other regions.
Target:Ryohin Keikaku Group employees
Number of participants: Approximately 1,500 (held online in September 2021)
Meeting frequency:
Twice a year (5 hours each)

Employee Meetings
To realize co-owned management, it is necessary for every employee to cultivate a managerial perspective and act independently with agreater awareness of Ryohin Keikaku as “my company.” For that reason, we hold biannual employee meetings as forums to brief employeeson the Company’s medium-term business plan and financial results. These discussions will lead to the growth of the Company. Lively
discussions take place at the meetings, with store associates asking questions about flexible working arrangements and evaluation of
results at stores. The meetings are also good opportunities to deepen employees’ understanding of the Company, such as by having
questions about the business situation answered by the president.
Target:Ryohin Keikaku Group employees
Number of participants: Approximately 1,500 (held online in October 2021)
Meeting frequency:
Twice a year (3 hours each)

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Localization Initiatives
producers with the aim of turning that relationship into a full-scale

successful than we expected in attracting customers of all ages,

business. We are part of a senary industry that integrates primary

including those in their 50s and 60s, because they offer pleasant

production, secondary processing and tertiary sales in collaboration

family shopping experiences.

with local producers and businesses involved in everything fromfood processing and distribution to sales. This is how our storesand carefully learn about the characteristics of the regions wecontribute even more to communities.

serve, so I am deepening discussions with the relevant people in

We want MUJI to be a useful presence in the lives of people

Nobuhiro Matsueda
Executive Officer
Head of the Kinki Area Business

Pivot from building stores to creating residential areas.
We will earn the empathy and understanding of stakeholders
while providing products and services essential to daily life
and accelerating our contribution to communities.

We need to make a meaningful contribution to communities

tandem with the heads of each Regional Business Unit. We willaround the world through its products and services. Clothing,develop young store managers who can excel in their community

food and housing are closely interrelated and cannot be consideredwhile further developing the capabilities of the heads of eachseparately, but food is at the center of everything. However,Regional Business Unit. We are complementing regular meetings

people have become detached from the fields, farms and fishingwith store managers and the heads of each Regional Businessgrounds where food is produced, and simply consume food as a

Unit with internal channels and follow-up procedures so that we

commodity. These days many people see products only in terms

can accelerate the resolution of regional issues through closeof name or price, and know little about the mindset of producers

communication among our people.

or the innovations the products embody. MUJI AEON MALL
Sakai-kitahanada and MUJI Kyoto Yamashina offer our standard
product lineup and also provide unique stories and general
information about the vegetables, meat, fish, side dishes andgroceries we carry, along with behind-the-scenes insights into
how they are produced and processed. These stores embody
our concept of “eat, discover and buy.”
The people responsible for this program take the lead in
exploring the question of what makes things delicious by creating
reports based on information collected at production sites, andsharing recipes for seasonal vegetable dishes at kitchen countersin the food sales area. Farmers’ markets where people can buy
directly from producers have proved popular, as have speaking
store staff in a deep relationship with the community as MUJI

Collaboration Based on Empathy for andUnderstanding of MUJI

ambassadors. Empathy and understanding are the keys to all

Highly motivated employees drawn to the powerfully cohesivethese activities. It is important that we share this empathy and

MUJI brand have supported Ryohin Keikaku over the past 40

understanding with our business partners in moving forward in ayears. Going forward, we will need to collaborate with all of ourmanner befitting the MUJI brand.

stakeholders at every level of society to make residential areas

events with guest producers. We want to involve all of our

MUJI Has a Conscience

Making Residential Areas Better Places to LiveI joined Ryohin Keikaku in 1997, and now I am contributing to

Our “Second Founding” has two interrelated goals: “to be an

the Company’s “Second Founding” as the Head of the Kinki Area

indispensable part of daily life for people,” and “to take root in

Business. The core of the MUJI brand is its conscience, which has

local society.” The concentration of capital and population has

been passed down from generation to generation. The first mission

accelerated worldwide, and it is causing imbalances and problemsof Ryohin Keikaku’s new medium-term business plan is “to provide

for urbanization as it relates to achieving even, uniform lifestyles.

Stores That Are Community Centers

daily necessities and services, with trustworthy quality and ethicalCreated from the perspective of customers, the MUJI brand is now

We are also reviewing the process for identifying locations for newthat combine social responsibility with economic rationality, just as

value, at fair and affordable prices.” Since the Company launchedentering a phase in which the residential areas where customers

MUJI stores. In the 1990s and 2000s, MUJI was unintentionally

you would in developing a local community. To that end, we mustin 1980, Ryohin Keikaku has always emphasized a customer-

live is part of the brand mindset. Residential areas extend beyond

regarded as a fashion and interior brand because we opened

use easily understood language to convey our policies andfocused commitment to people rather than a focus driven by

suburbs to anywhere people live, whether in city centers or

stores on the fashion and interior floors of large commercial

mindset to earn the approval and engagement of more people.

suburbs. Our vision for MUJI includes creating stores that makefacilities in major commercial districts. However, we want to

We want more people to feel empathy with and understandWe do not simply sell products. Instead, we offer customers aresidential areas better places to live, ensuring that our products

increase the number of stores that are community centers that

MUJI’s values, including among employees who understand themspace that melds the intellect and sensibility found in the MUJI

are an indispensable part of daily life, and taking new approaches

are close to daily life. Ideally, we will open stores on floors where

well and also among supporters, employees and the generalin our relationship with communities (local society).

customers of all ages and genders can drop by, similar to a

public beyond Ryohin Keikaku. This sense of involvement willsupermarket inside a commercial facility, or outside commercial

broaden our range of activities. When we look back on today instore that embodies the idea of working together with local

facilities near a supermarket or other establishments such as a

the future, I hope we see that 2022 was the start of our ascent

We set up a Regional Business Unit in each area (10 in total) in

communities. I became the community manager at this store in

drug store or a dry cleaner. We are also opening stores such as

toward a society of coexistence and cooperation in which people

September 2021 to launch and drive a community-based business2018. I expanded our concept of “food” and started a program

MUJI Kyoto Yamashina in areas where department stores havecan dream and accomplish anything together.

model. We will use this as an opportunity to create stores that are

to purchase and sell products from local producers in cooperation

closed and there are empty spaces of 1,000 to 2,000 tsubo foreven more closely aligned with the MUJI conscience.

with business partners. Furthermore, at MUJI Kyoto Yamashina,

which residents are in a loss as to what to do with. MUJI stores

which opened in 2019, we worked to build relationships with local

in residential areas or near supermarkets have been more

economically rational capital priorities such as scale and efficiency.

brand, integrating products and information within a clear andconsistent environment. This is the conscience that illuminates the
MUJI brand.

37 MUJI REPORT 2021

The MUJI store at the AEON Mall Sakai-kitahanada is a neweven better places to live. Based on our philosophy of “publicinterest and people-centered management,” we will create stores

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38

MUJI iias Kasugai: A Large-Scale Store Openedin October 2021
A Community Center
Central Square

MUJI iias Kasugai

Address: iias Kasugai 1F
22 Higashigaoka, Rokkenya-cho
Kasugai City, Aichi Prefecture 486-0842
Access: 2.1 km from JR Kasugai Station, about
30 minutes on foot From JR Kasugai
Station. Take Meitetsu Bus 46 or 47
toward Higashinocho and get off at the
Asayamacho/Higashinoguchi bus stop.

Supporting Daily Life with the Largest Sales Floor in Japan
MUJI iias Kasugai sells daily necessities, food, and storage products that enrich daily life, and is also a place where residents can interact
and promote their community in collaboration with Kasugai City. It offers the “truthful and sustainable life for all” that Ryohin Keikaku
proposes to residents of Chubu communities.
The store boasts locally rooted features that only a large-scale store can offer. One of the features is the “Interior Advisors,” who arepart of the experiential storage section. They provide storage tips from a model room and propose storage plans aligned with eachcustomer’s lifestyle. Customers can try out all of the MUJI storage items on the sales floor. Another feature is Asaichi Odori, where daily
necessities are offered in “stalls” rather than conventional sales areas. These stalls are located in the middle of the store in order to create
an atmosphere just like a morning market in a town. Customers and store staff interact in this lively market and talk about everyday topics
and share handy lifestyle tips.
In addition, Ryohin Keikaku has formalized a cooperative relationship with Kasugai City. We are working together to revitalize the region
and resolve community issues with the aim of helping the city achieve its goal of being a town where people are comfortable and happy. In
this collaboration with Kasugai City, we want MUJI iias Kasugai to be a community center that provides residents with a place to interact
and promote community development, thus helping people to live even better lives.

The Central Square in the store connects community residents with local businesses andthe activities of administrative agencies. We hold health counseling sessions featuring
speakers from local hospitals and workshops in cooperation with disaster prevention
volunteers. MUJI iias Kasugai also functions as a public venue for collaboration – a venue
where people from governmental organizations, businesses and non-profits who are
local heroes because of their involvement in community revitalization provide information
about subjects including the environment and parenting.
MUJI iias Kasugai’s initiatives are aimed at contributing to neighborhoods and to
making the store a focal point of involvement in communities where residents can always
enjoy life with peace of mind.

Health Counseling

Community Market

Health counseling is available at the Central Square. The aim is tocreate relationships between customers and healthcare providers
in collaboration with three medical institutions in Kasugai City.
These events give customers who may be hesitant to seek advice
in an institutional setting access to counseling without going to aclinic, allowing our customers to get to know healthcare providers
and make institutional visits easier. MUJI iias Kasugai has been
holding counseling events twice a month, and the events havereceived good reviews from both customers and healthcare
providers. We will continue to contribute to the health and wellnessof community residents based on MUJI’s unique ability to provide
apparel, household goods and food.

MUJI iias Kasugai periodically hosts a special event called
Community Market, which is a market within the store operated incollaboration with community residents. MUJI iias Kasugai invites
restaurants and stores in and around Kasugai City to set up stallsin Community Market, where they introduce other restaurants andstores in order to strengthen relationships with local people. MUJI
helps community residents learn more about local businesses,
which encourages future visits. Community Market provides anopportunity for people to make new connections.

Agreement with Kasugai City
1. Promote industries that use local resources
2. Disaster-prevention measures
3. Recycling activities
4. Other regional revitalization activities

Interview

Sale of Regionally Grown Vegetables

Food Drives

Store Manager Interview

MUJI iias Kasugai’s food aisles primarily sell seasonal vegetables
grown by farmers in Aichi Prefecture. The store offers vegetables
not only from Kasugai City but also other vegetables not commonly
available in supermarkets. Local products are offered with theaim of reducing food loss and creating a new agricultural future.

MUJI iias Kasugai contributes to food drives as one way to reducefood loss. Surplus items from households, ranging from foodin cans and retort pouches, dried food, and dried noodles tobeverages and seasonings, are collected and then donated to local
welfare organizations and facilities through food bank organizations.
A collection box has been set up inside the store.

Kasugai City is a suburb of Nagoya, and one problem it faced is that many people went to Nagoya toshop instead of shopping in town. I myself, in fact, have lived in Kasugai City since before this store
opened. I have visited various places and talked to residents, and have seen them going to Nagoya on
weekends because there are few places in Kasugai City to shop for everyday items or places to go forfun. That’s why we decided on the concept of making MUJI iias Kasugai a “foundation of daily life” forcustomers in the area and a local “community center.” We want it to be a store for everyday use by local
customers, and try to give the sales floor a leisurely, out-of-the-ordinary feel for families who visit on
weekends. By taking full advantage of the size of the sales floor area, including the Central Square thatshowcases the activities of local residents and the local government, we hope to make it a place thatconnects people as a gathering spot for people, products and events. Going forward, we will further
contribute to the area by linking solutions to issues and local development not only in Kasugai City, butalso in surrounding communities. To do this, we will focus firmly on our core business of selling products
for daily life to make this a store that attracts many customers and plays an even bigger role in realizing“a truthful and sustainable life for all” for local residents.

39 MUJI REPORT 2021

遠藤 和幸

店長（現・東海エリアマネージャー）

Kazuyuki Endo
Store Manager(currently Tokai Area
manager)

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Sustainability

MUJI’s Goals
MUJI aims to solve social issues on a global level by incorporating simplicity
and beauty into daily life through its products and services.
We would like to be a collective group focused on attentivenessthat sees and thinks from a broad perspective, from the smallest details to
the future of the whole planet.
Ryohin Keikaku contributes to society by providing
MUJI products and services that take people andproducers into consideration.

United Nations Global Compact
Ryohin Keikaku has supported human rights as a signatory to the United Nations Global Compact since 2013.
The compact encompasses ten principles for human rights, labor, the environment and anti-corruption.

41 MUJI REPORT 2021

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Sustainability

A Leader in ESG Management
Ryohin Keikaku has been committed to ESG management since its establishment morethan 40 years ago in 1980. We will further refine this commitment through 2030 byencouraging people to take part in ESG and ensuring its positive impact on society.

Build a Sustainable Society While Achieving
Circularity, and Coexisting with Nature
Response to Climate Change

ESG in Products

We will promote awareness of ESG worldwide by adopting circular design for products and offering themat affordable prices.

ESG in Business
Activities

We will collaborate with stakeholders to reduce social costs and environmental burden. At the same time, wewill contribute directly to solving social issues through our business activities.

ESG in Communities

We will make a positively impact on society by leading the revitalization of local areas through activities withlocal communities.

We have determined four evaluation indices for the above andwill regularly disclose results and progress.

Ryohin Keikaku is committed to earning the trust of society by steadily responding to climate change, improving
environmental performance, and proactively disclosing information through its website and other means.
The information we disclose about environmental performance includes responding to questions about publications such as the Global
Warming Countermeasures Report we submitted to the Bureau of Environment of the Tokyo Metropolitan Government.
In response to the Corporate Governance Code of Japan, we will begin conducting information disclosure based on therecommendations of the Task Force on Climate-related Financial Disclosure (TCFD) by the end of 2022.

Reduce CO2 Emissions by 50% by 2030 (Scope 1 and 2)
Issues related to climate change are important to Ryohin Keikaku, which is targeting a 50% reduction in greenhouse gas
emissions by 2030 compared with the fiscal year ended February 2020. We are taking action to implement decarbonization
management with the goal of using 100% renewable energy at all stores and installing solar panels at all of our independent
store buildings by 2030. In addition, we will collaborate with our business partners to promote energy conservation andimprove energy efficiency in our business activities.

Greenhouse Gas Emissions
Ryohin Keikaku calculates its greenhouse gas emissions (GHG) using the GHG Protocol, a commonly used internationalguideline for calculating GHG emissions. In the future, we plan to assess emissions in all countries and regions where MUJI
stores have opened.

1. Build a sustainable society while achieving circularity, and coexisting with nature
Reduce combustion of fossil fuels and their derivatives● Guarantee ethical production processes● Encourage active involvement in sustainability activities*●

2. Revitalize communities and resolve their issues through localization activities
Resolve issues arising from an aging society and declining population
Open stores and revitalize industry in local communities● Preserve local communities and traditional culture●●

Scope 1 GHG (direct emissions by Ryohin Keikaku) and
Scope 2 Electricity (indirect emissions by Ryohin Keikaku)（t-CO2e）29,48630,00025,00027,073

28,972

25,10924,631

Maintain a corporate culture of acting proactively and independently● Be highly sensitive to social issues and finding solutions● Demonstrate commitment to diversity● 
Creation of workplaces where anyone can fit in and succeed●

4. Achieve public-interest and people-centered management
Encourage co-owned management● Earn strong shareholder support● 
Earn strong support from residents, customers and local communities

25,37520,000（t-CO 2e）Category

2021/8

1. Purchased goods and services

704,321

2. Capital goods

26,618

3. Fuel and energy related activities not included in Scope 1 and 2

4,455

4. Upstream transportation and distribution

49,175

11,614

6. Business travel

10,00011,141

7. Employee commuting

5,000
0

210

5. Waste generated in operations

15,000514

478
2018/2

2019/2

2020/2

988

473

666

Scope 1

3. Promote high employee engagement and acquisition of problem-solving skills

26,263

26,407

Scope 32020/82021/8

Scope 2

Notes: 1. G
 HG emission data was collected from directly managed MUJI storesin Japan, our logistics centers, the headquarters building and otherfacilities owned by Ryohin Keikaku.
2. F
 or Scope 1 and 2 emission factors, the coefficients specified by theGreenhouse Gas Emissions Calculation, Reporting and Announcement
System are used.
3. D ue to the change in fiscal year, 2020/8 covers the six-month period
from March 1 to August 31, 2020.

956
3,386

8. Upstream leased assets-

9. Downstream transportation and distribution-

10. Processing of sold products

64,155

11. Use of sold products

591

12. End-of-life treatment of sold products-

13. Downstream leased assets

4,062

14. Franchises-

15. Investments

857,928

Scope 3 total

Note: For emission factors, the Ministry of the Environment’s CO2 emission
intensity database, the IDEAv2 database, and other databases are used.

Initiatives to Use Renewable Energy and Reduce Energy Use Throughout Our Operations●

Use of Renewable Energy and Installation of Solar Panels

We will use renewable energy and install solar panels at locations under our control.

Solar Panels of the Hatoyama Distribution Center and Use of Renewable Energy* Active involvement in sustainability activities: We believe that in the current consumer market, in general, companies strengthen ESG andsustainability initiatives in a way that makes consumers bear some of the cost. Ryohin Keikaku conducts environmental and social initiatives
naturally and effortlessly, and provides products and services at affordable prices. Through MUJI, we want reduction of environmental impact to bedone in a way that blends into daily life – in fact, that is MUJIʼs founding philosophy. By practicing and broadly expanding this philosophy, we
encourage people to take part in sustainability activities.

The Hatoyama Distribution Center has 1,400 kWh solar panels on the roof. These solar panels cangenerate electricity equivalent to the annual power consumption of around 228 general households. We
expect to reduce annual CO 2 emissions by around 494 tons. In addition, we are using renewable energy
for about half of the total electricity we use.

Change over to LED Lighting

We are transitioning to LED lighting at stores, and the headquarters completed the switch in February 2022.
Other Initiatives https://ryohin-keikaku.jp/eng/sustainability/environment/energy/

43 MUJI REPORT 2021

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A Leader in ESG Management

Measures to Ensure Ethical Production Processes

Supply Chain Management

Develop Environmentally Responsible Products

Policy Regarding Respect for Human Rights

The basic mindset of MUJI manufacturing has not changed since we created the brand in 1980. We continue to manufacture
products based on three environmental and social perspectives: (1) selection of materials, (2) streamlining of processes, and(3) simplification of packaging. We manufacture no-frills, quality products and select materials that take the global environment
and producers into consideration, eliminate waste in all processes, and provide customers with what they actually need, in theform they actually want. Our raw material procurement and waste reduction initiatives draw on the above three perspectives.

We believe that our most important responsibilities are to respect the basic human rights of all people involved in the supply
chain and to ensure their physical and mental health, security and safety. To this end, we have formulated the Code of Conduct
for Production Partners of Ryohin Keikaku and request all our business partner factories not to engage in any kind of humanrights infringement, including discrimination, child labor and forced labor. The Code of Conduct is based on global humanrights principles and declarations, including the International Labour Organization (ILO) Declaration of Human Rights, the 10
principles of the United Nations Global Compact, and the UN Guiding Principles on Business and Human Rights.

1. Selection ofMaterials

2. Streamlining ofProcesses

3. Simplification of
PackagingWe review materials by always returning to the basics of manufacturing that are often overlooked increating delicious and healthy food, comfortable clothes that fit well, and household goods that put
function first.
We provide high-quality products at affordable prices by utilizing materials that are rejected despite
their quality because of their appearance, using commercial materials, accessing raw materials from global
markets, and procuring large quantities of seasonal goods at low cost.
We work to improve processes right down to the production of a single product. For example, we eliminate problems
associated with sorting and arranging sizes, and we also make products from goods rejected because of nonstandard
size or shape. We eliminate unnecessary work. This includes work that is not related to the fundamental quality of the
product, such as excluding uneven shapes/colors or polishing. Our approach to manufacturing no-frills, quality products
eliminates material waste and reduces costs.
All MUJI products have always appeared in stores featuring only a package or tag simply giving productdetails. For products that may need extra packaging, we bundle them together or use a common container.
We pursue ongoing initiatives to reduce trash because we do not want resources to go to waste.

Raw Material Procurement
Following in the steps of its predecessors, MUJI promotes manufacturing thatmakes the best use of the original functions of natural materials. We work to
select raw materials that are collected and cultivated in a way that does not
impose an excessive burden on the Earth, animals and plants, and producers.
For primary raw materials, we use materials that can be traced back to the
production area as much as possible, and above all, we actually visit the
production areas to check with our own eyes the conditions of collection/cultivation sites of major raw materials and the lives of producers. We willcontinue to strive to procure raw materials in consideration of those who usethem, those who make them, and approaches to engaging with nature.

Compliance and Risk
Management Committee

Procurement Standards

Division/Committee in Charge

2021/8General issues related to human rights(Supervision of Group Compliance Code of Conduct and theCode of Conduct for Production Partners)

HR & General Affairs Division

Elimination of discrimination and harassment toward
employees, wages, working hours, point of contact forinternal reporting and consultation, etc.

Labor, Safety and HealthCommittee

Occupational safety and health

IT Services Division

Privacy (including privacy protection policies)

Development & Production
Division, Internal Audit Office,Public Relations & ESG Division

Human rights in the supply chain

In accordance with the Code of Conduct for Production Partners, we share our policies related to the working environment, respectfor human rights and environmental consideration throughout the supply chain with our business partner factories. We also promote
initiatives toward respect for human rights while asking the factories to comply with our policies.
We request all of our production partners to which we outsource production to sign a pledge to abide by the Code of Conduct,and only do business with suppliers who commit to complying with the Code of Conduct. In this way, we aim to realize our vision ofachieving “a truthful and sustainable life for all” by considering not only customers and the environment but also producers inproviding MUJI products and services.

Considering respect for human rights, compliance with labor-related laws, improvement in the working environment, and environmental
consideration in the supply chain our top priority issues, we are actively working to monitor our business partner factories, in cooperation
with production partners.

6 months to 1 year
after audit

E

Assessment

Not
improved

Assessment

Within 3 monthsof audit

Follow-up audit

D

Deliberation at an internal meeting to review
whether to continue doing business with the
production partner

Within 3 monthsof audit

Improved

B/C

Assessment

Improvement
implementation report

Biodiversity Initiatives

A

Assessment

Regular audit

Ryohin Keikaku requires its contract manufacturing partners to safely manage chemical substances that may pollute theenvironment, and to prevent and reduce water and air pollution in accordance with our Code of Conduct for Production
Partners. A list of restricted substances is provided in the “Ryohin Standards,” which specifies our internal quality standards
and is made available to our production partners. We do not use any prohibited chemical substances in our manufacturing
processes, and for those chemical substances designated by the laws and regulations of each country or region, wemonitor the amount of emissions and report them to the governments in accordance with laws and regulations.

Working Environment
Monitoring System

Pledge to the Code of Conduct for Production
Partners

Chemical Management

45 MUJI REPORT 2021

Internal Facilitation System

Ryohin Keikaku does not manufacture any of the products that
MUJI handles, but outsources all product manufacturing andproduction to its production partners. As a result, we believe that
it is extremely important for us to work with production partners
based on established procurement standards.

● Monitoring

Details about procurement initiatives are available at https://ryohin-keikaku.jp/eng/sustainability/activities/material/

Donations
More than 38,000 species of wildlife on Earth are currently
on the verge of extinction.
2020/2:
Committed to contributing to society through its businesses,
2019/2:
Ryohin Keikaku donates part of the proceeds from the sale of
2018/2:T-shirts with images of endangered animals to IUCN-J. This
supports the activities of IUCN-J, which is involved in conserving
2017/2:
biodiversity and protecting the environment. These MUJI T-shirts
2016/2:will remind people that animals are disappearing and inspireinterest in the relationship between humans and nature.

Supply Chain Policy

Details of our monitoring of production partner factories are available athttps://ryohin-keikaku.jp/eng/sustainability/supply-chain/monitoring/

JPY 1,458,170
JPY 1,268,793
JPY 1,034,850
JPY 1,164,969
JPY 1,114,218● Supply Chain Due DiligenceThrough the process of human rights due diligence, including the monitoring and other measures described above, we are striving to
identify and prevent the risk of potential human rights abuses in accordance with the UN Guiding Principles.
Moreover, we are gradually applying the due diligence process even in the upstream supply chain where raw materials are procured.
Cotton, one of the main materials for MUJIs apparel products, is sourced from many places around the world including India, Turkey andChina. Cotton and yarn used by Ryohin Keikaku has obtained organic certification confirmed by a third-party organization. This certificationis conditional on the compliance with labor conditions stipulated by the International Labour Organization (ILO).
Going forward, in order to prevent human rights abuses in the supply chain, Ryohin Keikaku will engage with other companies in our
supply chain to further improve the working environment, and will continue to carefully gather information and appropriately implement due
diligence and any other necessary measures.
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A Leader in ESG Management

Quality

Initiatives for Realizing a Circular Society

Approach to Quality

As a company that develops and sells products, MUJI considers the future of its products as they fulfill their role and function. Somecustomers even return MUJI products that they have loved for years to be recycled. In addition, we aim to achieve a circular economy
by eliminating waste and promoting recycling and reuse of materials.
MUJI, which aims to create a better relationship with nature, will continue to do its best to help recycle resources and reduce waste.

At MUJI, we inspect each process of design, procurement and production based on the “Ryohin Standards.” We strive to provide
safe and secure products, and aim to continuously realize the following:● Quality products with a reason and value sought from a customer’s perspective● Consideration for customers, producers and the environment● Solving issues for society as a whole and as inhabitants of the Earth● Zero quality faults● Reduction of defect rate
● Thorough quality-oriented awareness
View the “Ryohin Standards” at https://ryohin-keikaku.jp/eng/sustainability/activities/quality/

Initiatives for Quality Control
The “voices” (comments) of customers regarding our products are all registered in a dedicated database (“voice navigation
system”), and the Development & Production Division, merchandising divisions and other related divisions cooperate andrespond quickly in accordance with the content. By enabling our business partners and factories to directly access the
database to confirm the content, we have created an environment where we can respond to quality problems quickly. In
addition, the Development & Production Division cooperates with external inspection organizations as needed.

CustomerInquiryStoresConsult

Customer
Relations Office

Product

Product

Return

Reply

Questions
Complaints
Suggestions

Via telephone

Consult

Inspection
requestProduct

Product

Card

Card

Reply

Reply

RequestConsult

Product

Merchandising
divisions/Development &Production Division

QC

Reply

Info
Collection
Inspection
Improvement
Refinement

Inspection
request

Reply/Response

Recycling targets and detailed information are available at https://ryohin-keikaku.jp/eng/sustainability/activities/recycle/

12

Bring to the
store

Check
condition ofclothes

MUJI clothes (excluding
underwear), towels,
sheets and covers

Reply

Product

Inspection

Consult
Reply

Inspection

ReportTop management

Other departments
Operation
improvement

Raw materials for clothing, etc. are recycled

4 ReuseClothing is overdyed in Japan and sold as a newitem at selected stores.

ReturnProduct return slips with details

Card

Information card

Quality

Quality report

ReportResult report

Transforming MUJI Shinjuku
into a store that addresses
environmental and social issues
https://ryohin-keikaku.jp/
news/2021_0812.html (Japanese only)

Plastic Bottle Collection

Recycled Wool

We collect and recycle items made fromPET as an initiative to reduce plastic
waste. We collect used facial lotion andmilk bottles and My Bottle for Water atstores for recycling to reduce plastic
waste and make efficient use of
petroleum-based raw materials.

Ryohin Keikaku makes products fromrecycled materials such as scrap fromproduction processes and dirty or
damaged products that cannot be sold.

Amount of plastic bottles collected
729 kg (2021/8)

External inspection
organization

ReportReply/Response

Can be wornwith somemodification

3 Recycle

Factories

Product

Via e-mailCannot beworn

Waste Reduction Initiatives

The Reusable Bag Program

We continuously review the materials
we use for shopping bags, productpackaging, and sales floor displays torecycle resources and reduce waste.
We are eliminating plastic packaging

Ryohin Keikaku began eliminating plastic
shopping bags in March 2020 and hadchanged over to paper shopping bags at

to the extent possible or transitioning
to alternative materials such as
recycled paper.

all stores by the end of June 2020.
We are also working to reduce
plastic with a deposit system for sharedbags made of recycled polypropylene.

Percentage of Customers
Who Bring Reusable Bags

77 %Risk Assessment
We conduct risk assessments of product design, layout, manufacturing, distribution and usage environments for the purpose of
preventing product accidents, defects and complaints. We also identify the above risks (including accidents, defects and complaints
due to reasonably foreseeable misuse) at the product planning/development/design stage to deal with the risk factors in advance.
By implementing risk assessments in the early stages of design, we can identify risks throughout the product life cycle fromproduct planning and development to use and disposal, incorporate solutions for identified risks into the design, and reduce therisk of accidents, defects, complaints, etc. to achieve a smooth launch of our products.

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A Leader in ESG Management

Revitalize Communities and Resolve Their Issues
through Localization Activities
Community Engagement
Aiming to help create “a truthful and sustainable life for all,” Ryohin Keikaku is not only focusing on sales of products essential to daily
life in countries and regions worldwide, but also turning its attention to the various issues taking place in each region.

Initiatives That Involve the Local Community
In each region, MUJI is involved in a variety of initiatives led by local governments and community members to revitalize local areas.

Special Feature

Product Development Using Local Ingredients: “Namba Negi” (Namba Green Onions)
Ryohin Keikaku purchases and sells regional products made with ingredients that are representative of the local land and culture,and has started a program to support local producers and businesses in product development.
In the Kinki area, we have quickly commercialized frozen food and processed food products that use local ingredients.
Examples include “Senshu Yellow Onion Curry Ajillo” and “Kyo-Yasai (Kyoto vegetables) Pizza Series.” One new project in which
we cooperate with local farmers is “Namba Negi.”
Fifty years ago, Namba green onions were the mainstream type of green onion (negi) in
Japan, but production declined because the leaves broke easily and the slime inside them
was too strong, which made them difficult to process. However, years of efforts by some
farmers have paid off. The flavor and quality of these onions have been reevaluated inrecent years, and they have attracted considerable interest after being certified as a
“traditional vegetable of Naniwa.” The most distinctive feature of Namba green onions istheir slime. Since it is high in the original rich, sweet flavor of green onions, heating themenhances their flavor. In the Minami Osaka area, one of the Regional Business Units is
promoting activities to utilize the valuable Namba green onion. For example, Namba Negi
Sembei (green onion rice crackers), which were developed in partnership with theheadquarters Food Division, are sold exclusively at MUJI stores nationwide, and Negiyaki(green onion pancakes), a frozen food product that we commercialized after cooperating in
product development with local food companies, is now being purchased and sold bystores in the area.
By developing products that make use of local ingredients, we will help to connect
producers and consumers and contribute to revitalization of local communities.

MUJI KONANDAI BIRDS
MUJI KONANDAI BIRDS opened on two floors: the first floor, which offers apparel andhousehold goods, opened in April 2021, and a basement-level floor specializing in foodopened in May 2021. The two floors combined have total sales floor space of about 5,000
square meters, making it the largest MUJI store in the Kanto region.
The food floor on the first basement level is shared with Queen’s Isetan, a supermarket,
and Nakajima Suisan Co., Ltd., a fresh fish specialty store based in Tsukiji. MUJI KONANDAIBIRDS cooperated with these two companies to set up the dedicated food sales floor in
response to demand from local residents. This was a local issue that we discovered byvisiting various places in the neighborhood to get information starting from October 2020,prior to the opening.
In addition, we learned that a large housing complex within walking distanceof the store has an aging population of residents, and many of them have difficulty
going shopping. For that reason, we visit the complex once a week in a minivan to
conduct mobile sales. We are taking various measures to solve issues while deepening
communication with people in the community in ways such as changing the product lineup
at the request of residents, and conducting storage consultations.
We are aiming to be an essential presence in the region and revitalize the wholecommunity with MUJI as a focal point.

49 MUJI REPORT 2021

Cooperation with Universities and External Organizations
MUJI is cooperating with universities and NPOs to help revitalize regions and communities.

Special Feature

Cooperative Class with Fukushima College
MUJI collaborated with Fukushima College to hold four product development classes
using local products from Fukushima Prefecture.
The purpose of the class was to learn marketing skills through case studies of
MUJI’s product development, and to acquire the skills to develop products using
local resources while solving local issues at the same time. The theme of the class
was to develop products from sake lees made by Suzuki Sake Brewery in Namie
Town, Fukushima Prefecture (which was impacted by the Great East Japan
Earthquake and is currently operating in Nagai City, Yamagata Prefecture).
At the final presentation, various products were proposed, including baby
powder made from sake lees and Eustoma russellianum – a specialty grown inNamie Town; craft gin made by pickling the fruit peels in Kasutori Shochu (a kind of alcohol made by distilling the sake lees); andfruit bars made by combining dried fruit and honey from Fukushima with sake lees.
We plan to consider development of products using sake lees in the future.

Public Design
By designing public spaces with both conscience and innovation, we aim to create connections between individual people, between
people and nature, and between people and society, to rebuild relationships that have become fragmented in the modern world.

Special Feature

Renovation of Nichinan Station in Miyazaki Prefecture
The station building of Nichinan Station in Miyazaki Prefecture, which was renovatedin March 2020, was envisioned as not simply a place to wait for trains, but as acommunity space where anyone could comfortably spend time. Ryohin Keikaku
partnered with Nichinan City as well as local and related businesses, in transforming
the station into a place where people in the area could gather. In the project, we
cooperated in planning for station repairs and in holding hearings and workshops
for local residents.
Within the community space, we set up a free-for-use learning space, which
was requested by many students, in order to make good use of the waiting time fortrains. In response to ideas from families raising small children, we also created a© paak design
Japanese-style common room by placing tatami mats on a low platform that people
with young children can use freely. In addition, some of the exterior and window
frames are made of Obisugi cedar, a local specialty, to give the space a warm appearance.
This station building renovation received an Encouragement Award at the 39th annual Display Industry Awards, and won anaward in the Social Design category at the Japan Wood Design Awards 2020.

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A Leader in ESG Management

Community Support
With the aim of revitalizing communities by deepening interpersonal relationships and regaining harmony with nature in areas close tohome, we have launched a variety of initiatives that will help to create a better future. Ryohin Keikaku supports such activities and thepeople who take part in them through its products and services.

Special Feature

Global Industrial Support Initiatives
MUJI (Shanghai) Company Limited, which operates approximately 300 stores in mainland China, released mineral water as a productin July 2020. The water with low impurities and good taste for drinking is extracted from a natural cave in the Shibadong Cun area in
Hunan Province to support local industries. In addition to the utilization of natural resources, this initiative also led to the creation of local
employment and industrial development of the area.
In January 2021, MUJI Shanghai collaborated with the Beijing Contemporary Art Foundation (BCAF) to sell jute tote bags designed
by artists who share MUJI’s philosophy, and a portion of the revenue has been donated to the Children’s Public Service Project.
Moreover, in cooperation with Ant Forest, a public interest platform on environmental protection, MUJI Shanghai has started to give
“green energy points” from June 2021 to customers and MUJI passport members who are environmentally conscious and decline
plastic bags and paper receipts. This initiative will lead to tree planting and land conservation activities.
We will continue to think about what we can do for the environment, society and the community, and to make contributions
through our business activities.

20 Cooperation Agreements Signed with 17 Local Governments— Utilizing MUJI stores to connect people, nature, and society —Ryohin Keikaku seeks to create “a truthful and sustainable life for all,” and is involved in a variety of initiatives led by local governments andcommunity members to revitalize local areas. As of October 2021, we have signed regional cooperation agreements with 17 local
governments in Japan.
Working together with local governments, we are implementing measures that benefit people in the area by co-creating new value
such as local production for local consumption, creation of jobs and community development.
Local Government Bodies and Partners

Agreement Type2017
November: Toshima Ward, Tokyo

1. Partnership agreement on community development

2019
April: Kamogawa City, Chiba Prefecture

2. Agreement on promotion of local revitalization

July: Sakata City, Yamagata Prefecture

3. Partnership agreement for local revitalization

December: Joso City, Ibaraki Prefecture

4. Agreement on revitalization of public housing complex

2020
January: Joetsu City, Niigata Prefecture; Kubiki Jidosha Co., Ltd.

5. Agreement on comprehensive cooperation for local revitalization
6. Agreement on cooperation between Tokamachi City and Ryohin Keikaku

September: Tokamachi City, Niigata Prefecture
7. Agreement on dispatch of employees
October: Isumi City, Chiba Prefecture, Isumi Tobu Fisheries Cooperative and
SOTOBO ISUMI Co., Ltd.

8. Cooperation agreement
9. Agreement on dispatch of employees

November: Koto Ward, Tokyo
10. Cooperation agreement on Koto Ward recycling project, etc.

Children’s Cafeteria
Since its opening in December 2020, MUJI Tokyo Ariake has been involved in a number of initiatives for the benefit of the local
community. We had heard about the situation in the local community from various community associations. Through ourparticipation in support activities, we have learned that the number of children eating alone at home is increasing, and that it isdifficult for them to speak up even if they are in trouble.
Store employees discussed what could be done to address these issues, andfrom August 2021 started the MUJI Tokyo Ariake Children’s Cafeteria. This event isheld on the fourth Wednesday of each month at the Cafe&Meal MUJI located inside
the store. The store plans to hold this monthly event with the goal of making thisChildren’s Cafeteria a place where children can feel secure, and a place where people
in the community can help each other.
Through our activities with Children’s Cafeteria, we hope to create a world
where children no longer need such support 10 years from now.

11. Agreement on cooperation between Namie Town and Ryohin Keikaku
November: Namie Town, Fukushima Prefecture
12. Agreement on dispatch of employees

2021
March: Kamogawa City, Chiba Prefecture and Higashiawa Fishery Cooperative 13. Cooperation agreement
May: Yokohama City, Kanagawa City

14. C omprehensive cooperation agreement to create “a truthful andsustainable life for all”

May: Aizuwakamatsu City, Fukushima Prefecture

15. A
 greement for promotion of local community development and local
revitalization

May: Kumamoto City, Kumamoto Prefecture

16. Partnership agreement for creation of a sustainable society through water

June: Morimachi, Kayabe County, Hokkaido

17. Agreement to promote development of local communities and revitalization of
the local economy

September: Shinjuku Ward, Tokyo

18. Cooperation agreement on promotion of reduction of food loss, etc.

October: Mashiko Town, Haga County, Tochigi Prefecture

19. C omprehensive cooperation agreement for sustainable community
development

October: Kasugai City, Aichi Prefecture

20. C ooperation agreement on improvement of “a truthful and sustainable life
for all”
As of October 31, 2021

Ryohin Keikaku will continue to address various local issues and contribute to development of local communities and regional revitalization.

51 MUJI REPORT 2021

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A Leader in ESG Management

Promote High Employee Engagement andAcquisition of Problem-Solving Skills
Creation of Workplaces Where Anyone Can Fit in and Succeed

Active Use of Diverse Human Resources

Recruitment and Employment

The Ryohin Keikaku Group respects the individuality of each of its employees around the world. It is our primary goal to provide lastinghappiness to our employees.

In its employment activities, Ryohin Keikaku makes sure to understand the customs of the countries and regions in which it does business.
We also make sure to comply with the laws and regulations of those countries and regions.
In addition, Ryohin Keikaku publishes the “MUJI Employee Handbook” in three languages (Japanese, English and Chinese) to describe
its employment and labor policies and the Group Compliance Code of Conduct, etc. To ensure that all employees understand its contents,
explanations and training are provided to all employees when they join the Company.
1. We aim to achieve lasting happiness for MUJI employees.
2. We strive to ensure the mental and physical comfort, enrichment andprofessional growth of our employees.
3. We respect the individuality, human rights and privacy of our employees. We
work to eliminate discrimination and do not tolerate harassment of any kind.
4. We respect gender, nationality, ethnicity and religious diversity, learn fromour differences, and help each other grow.

Number of Employees(Ryohin Keikaku Group)
12,000

9,615

9,046

8,882

XX.X

0

2020/2

2020/82021/8A Safe and Healthy Work Environment
We ensure a safe and healthy working environment that does not put employees at risk. To this end, we provide safe drinking water andproper sanitation, lighting, temperature control, ventilation, changing rooms, etc. for our employees.
We comply with laws and regulations related to labor standards, safety, health, etc. and take into account the physical and mental healthof each and every employee. We also strive to maintain a healthy, safe and hygienic work environment and prevent workplace accidents. In
addition, we comply with international standards and local laws and regulations in terms of working hours, rest periods, and vacation time andpromote a working style that does not require overtime. In the unlikely event of a disaster, accident or other problem occurring in the workplace,
we will work to minimize the damage and put measures in place to prevent its recurrence.
At Ryohin Keikaku, in order to encourage employees to take annual and public holiday leave, all employees are required to register theirannual leave plans via the attendance management system at the beginning of the year, and the plans will be reviewed and approved by
the managers. The HR Division will monitor the registration status, and remind employees and managers if the plans are not properly submitted
or if the days of registration are insufficient. Employees will then take leave according to their plans, and the HR Division will use the attendance
management system to monitor progress, and make sure that all employees take proper leave as required by laws and regulations.

Labor, Safety and Health Committee

53 MUJI REPORT 2021

Numerical target for ratio of female managers:
35% or more
Actual result: 35.0%
Ratio of female directors and executive officers:
12% (3 of 25 persons)Ratio of female employees: 55.3%
Note: Ryohin Keikaku Co., Ltd. only
(As of August 31, 2021)

8,000

4,000

Ryohin Keikaku has established a Labor, Safety and Health Committee
to investigate and deliberate on matters related to the health and safetyof business sites and to oversee the health management of its employees.
A director has been appointed as the chairperson of the committee.
The Labor, Safety and Health Committee meets monthly with healthand safety managers, occupational physicians, employee and union
representatives in order to discuss and resolve specific issues such as
store and office safety management, employee health management
and mental healthcare, etc. In addition, stores with 50 or more employees(excluding part-time workers) are required to have a Labor, Safety and
Health Committee. The committee is spearheaded by the store manager
or an occupational physician appointed for each region, and meetings
are held on a monthly basis.

Promotion of Women’s Participation and Advancement in the Workplace
In order to promote the success of all employees, Ryohin Keikaku is working on actionplans that take into account the various lifestyle changes its employees might encountersuch as nursing care, medical treatment, and childcare. To this end, we will makenecessary arrangements to make sure female employees can work with us for a long timewith peace of mind. On the other hand, we have implemented measures to give theyounger generation of employees more challenges and opportunities to gain experience
before they have to worry about lifestyle changes. We also provide training based on job
description to help them draw up their career plans at an early stage.

Employer (President)
Occupational
physicianGeneral safety and health manager

Safety manager

Dissemination to employees

Systems to Support Work-Life Balance
We have systems that allow employees to choose from a variety of work styles in order tofind balance between work and life events such as childbirth, childcare and nursing care.
We have established systems to support work-life balance that can be used by all
employees, regardless of gender, including a childcare and nursing care leave system, ashorter working hour system, a childcare system, a flextime system, and so on.
In 2016, we extended the applicability of our childcare system, which allows for
shorter working hours for employees who take care of their children, from the first year ofelementary school to the end of the fourth year of elementary school. This is part of ourefforts to create an environment in which employees can work with peace of mind.
We have also implemented a telecommuting program for headquarter employees inJapan from the fiscal year ended February 2019. In addition, from September 2020, we
further strengthened our support for employees working from home by providing anallowance for utilities and communication expenses (paid on a daily basis) and by lending
computer monitors.

Ratio of Employees with Disabilities
(%)

4.5

4.12

3.78

3.41

3.0
1.5
0

2020/2

2020/82021/8

Note: Ryohin Keikaku Co., Ltd. only
(As of August 31, 2021)

Average Number of Employees Using
the Childcare System
300

226

219

227

200
XX.X
100

0

2019/2

2020/82021/8(Including partner employees)

Organizational Vitality Surveys
Health manager

Labor, Safety and Health Committee

Employment of People with Disabilities
Ryohin Keikaku began hiring disabled individuals in Japan in 2000. In 2009, we launched theHeartful Project to promote the “sustainable happiness of co-workers,” “self-development
through mutual trust and cooperation” and “increase and stabilize employment at stores”
for the disabled. We have also established a support system that includes employment
management and guidance tailored to the characteristics and individuality of each
person and a step-up system based on evaluation to help people with disabilities reach
their full potential.
Our stores, using the our “Second Founding” as an opportunity to contribute to local
society, will promote the Heartful Project together with local communities and move forwardwith disabled people to create places for them to use their skills.

In order to gain a quantitative understanding of how employees perceive “work processes” and “human relations” at stores andheadquarters, and to further address specific issues in terms of organizational vitality, we conduct organizational vitality surveys (including
full-time employees, contract employees and part-time workers). A total of 11,172 employees (74% response rate) and 13,201 employees(77% response rate) participated in the survey in May 2018 and May 2019, respectively. A total of 14,780 employees (92.1% response rate)participated in the survey in November 2020.
Currently, we are revising the content of the survey to better reflect the corporate culture we want to build.
See pages 33, 35 and 36 regarding information on “maintaining a corporate culture of acting proactively and independently” and “being
highly sensitive to social issues and finding solutions.”

MUJI REPORT 2021

54

A Leader in ESG Management

 chieve Public-Interest and People-CenteredA
Management
Stakeholder Engagement
To contribute to the realization of “a truthful and sustainable life for all,” we believe that it is important for us to accurately understand andrespond to the demands and expectations of stakeholders. We will accomplish this through constructive communication with customers,
local communities and society, shareholders and investors, business partners and employees.

Communication with Stakeholders
Stakeholder

Main Method of Communication

Customer service at stores/events

Customers

Distribution of articles via social media, including the MUJI
passport app
Inquiries to the customer support center
Customer participation-type community site (IDEA PARK)

Local communities
and society

Participation in community activities
Regional cooperation agreement with local governments
Disaster relief support
General Meeting of Shareholders

Shareholders
and investors

Meetings with shareholders
Business results briefing
Meetings with investors
Briefing for business partners

Business partners

Questionnaires for business partners
CSR audit of business partner factories
Business partner helpline (contact point for making reports)“Good Meeting” venue
Employee meetings

Employees

Employee training
Self-assessments and feedback meeting
In-house portal site and in-house newsletters
Employee helpline (whistleblowing hotline)

Relevant Initiatives

We have increased opportunities to connect directly with customers
through the free MUJI passport app. In Japan, the total number ofdownloads has reached 24.51 million (as of August 31, 2021). In
addition, over 40,000 articles have been distributed by stores.

Since 2017, we have concluded regional cooperation agreements
for revitalization activities with Toshima Ward in Tokyo, Kamogawa
City in Chiba Prefecture, and Sakata City in Yamagata Prefecture,among others.

About 250 shareholders attended the 43rd Ordinary General
Meeting of Shareholders (99 at the venue and approximately 150
online), and the meeting was streamed on the Company website.

2030 ESG Indices
Items

Eliminate plastic in packaging
and materials

Key Performance Indicators(1) Percentage of apparel, households good and foodproducts that do not use plastic(except when plastic is required for hygiene, quality
and safety)(1) A pparel: 14.0%
Household goods: 13.2%
Food products: Switched from plastic bottles tobottle-shaped cans

(2) Total weight of plastic usage reduced(2) Apparel: 52 t
Household goods: under review
Food products: 213 t

100%

Design products for re-use andrecycling100%(1) Percentage of items designed with recycling in mind
(except when hygiene concerns preclude recycling)(1) Household goods: 28.4%

Reuse post-consumer plastic
products we collect

100%(1) Total weight of collected plastic products(2) Total weight of plastic collected for reuse (including
products other than ours)(1) 729 kg (water bottles and toning water bottles)(2) 729 kg

Percentage of products that have been certified or havetheir own standards that have been audited by a third party

ApparelCotton: 100% organic cotton (excluding MUJI Labo)
Wool: 100% non-mulesed
Down: 100% down certified to ensure animal welfare*Household goods
Cotton: 85.6% organic cotton
Wool: 100% non-mulesed
Down: 100% down certified to ensure animal welfare*

Use of natural fiber materials
that are organic and respect
animal welfare100%

In addition to the regular briefing for business partners, we held abriefing on the Code of Conduct for Production Partners, which
was amended July 2020.

“Good Meeting” is our term for an assembly that raises the senseof ownership among Group employees and challenges them toachieve management targets. Held once every six months, themeetings are an opportunity for recognizing outstanding
employees, sharing the achievements of the Group during thepreceding six months, and encouraging forward-looking action byhelping employees understand the vision for the coming six
months and beyond.

Initiatives (As of August 31, 2021)

Perform human rights due
diligence on business partners,
traced back to raw materials

100%
disclosure(1) Number of audits conducted (annual)(2) Breakdown of evaluation

Product manufacturers(1) 20 factories(2) A Assessment: 0 factories; B Assessment: 9 factories; C
Assessment: 7 factories; D Assessment: 4 factories; E
Assessment: 0 factories(We have received improvement reports from factories
with B, C and D assessments. We plan to follow-up withfactories that received a D Assessment. We will reconsider
doing business with factories that receive an E Assessment. )Material and raw material manufacturers
We are currently formulating a human rights due diligenceprocess. (We have already conducted some due
diligence. No significant violations of law or Ryohin
Keikaku’s Code of Conduct were found.)List of major suppliers, traced
back to raw materials

100%
disclosure

List of major suppliers

We are preparing of list of major suppliers for disclosure,traced back to raw materials.

Reduce carbon footprint(Scope 1 and 2)

50%
reduction(1) Scope 1 (t-CO2e)(2) Scope 2 (t-CO2e)
Baseline: 2020/2(1) 988 (t-CO2e) (2) 25,275 (t-CO2e)
Total 26,263 (t-CO2e)
CO2 emissions intensity: 12.5% reduction (compared with
2020/2)

Cooperation with External Organizations
Name
United Nations Global
Compact (UNGC)

Better Work ProgrammeJapan Sustainable Fashion
Alliance (JSFA)

55 MUJI REPORT 2021

Member Since

Mission2013

Companies and organizations that have signed the UNGC continuously make efforts to implement Ten
Principles relating to protection of human rights, abolition of unfair labor, dealing with environmental challenges,
and anti-corruption, based on commitments from senior management.

2016

This is a joint program between the International Labour Organization (ILO) and the International FinanceCorporation (IFC), which is a member of the World Bank Group. It aims to improve the stability andcompetitiveness of the supply chain of the apparel and footwear industries and realize the improvement offactory workers’ rights and their working environment, in collaboration with a variety of corporations,organizations and people. This also includes governments, global brands, factory owners and employees, andlabor unions.

2021 (supporting member
company)

The objective of the JSFA is to understand the impact of the fashion industry on the environment and society andjointly resolve common issues in the fashion and textile industries in order to achieve sustainability by eliminating
waste through appropriate production, purchasing and recycling and by achieving carbon neutrality by 2050.
Activities
Promote appropriate production and purchasing, and recycle to eliminate waste. Become carbon neutral byvisualizing environmental load and impact. Make policy recommendations to relevant ministries and agencies to help
resolve shared industry issues. In addition, create means for communication with customers.

Ensure stores use renewableenergy100%

Number of stores and distribution centers that use
renewable energy (including headquarters and campsites)

Installed at Hatoyama Distribution Center
Preparing to introduce at other locations

Equip stores (independent
store buildings) with rooftop
solar panels

100%

Number of stores and distribution centers with solar panels(excluding stores that cannot install solar panels such as
those in shopping malls)

Installed at Hatoyama Distribution Center
Preparing to install at other locations(1) Average age(2) Ratio of female managers(3) Ratio of female employees(full-time employees)(4) Ratio of non-Japanese employees(5) Ratio of employees with disabilities(1) Average age: 37.9
(Male: 39.6; Female: 36.6)(2) Ratio of female managers: 35.0%(3) Ratio of female employees (full-time employees): 55.3%(4) Ratio of non-Japanese employees: 1.2%
(5) Ratio of employees with disabilities: 3.41%

Demonstrate commitment to diversity andinclusion by disclosing workforce
composition by age, gender and race

* We only use feathers that have been procured in a manner that meets the Five Freedoms of Animal Welfare defined by the Farm Animal Welfare Council and have beenreviewed and certified as being such. This means we use do not use feathers from animals that have been force fed or had their feathers taken while still alive. (Ministry ofAgriculture, Forestry and Fisheries, “Livestock breeding management with consideration of animal welfare”)

MUJI REPORT 2021

56

Basic Information

Management Team (As of November 26, 2021)(Back row, left to right)(Front row, left to right)

57 MUJI REPORT 2021

Jun Arai

Shingo Kawanokami

Asako Shimazaki

Satoshi Shimizu

Satoshi Okazaki

Masaru Hattori

Kei Suzuki

Outside Corporate Auditor

Corporate Auditor

Director

Senior Managing Director

Director

Outside Corporate Auditor

Full-time Corporate Auditor

Masayoshi Yagyu

Satoru Matsuzaki

Masaaki Kanai

Nobuo Domae

Isao Endo

Atsushi Yoshikawa

Outside Director

Vice Chairman and Director

Chairman and Representative Director

President and Representative Director

Outside Director

Outside Director

MUJI REPORT 2021

58

Basic Information

Directors and Corporate Auditors (As of November 26, 2021)
Responsibility

Attendance at meetings ofthe Board of Directors(Fiscal year ended August 31, 2021)

Number of years
in officeNumber ofshares owned*

Corporate
management

Retail/Sales/
Marketing

Product
development

Production/
Procurement/
Logistics

Chairman and
Representative Director

Board of Directors
Remuneration Advisory Committee
Nomination Advisory Committee

16/16(100%)

21 years,
6 months

112,800
shares〇〇〇〇Satoru Matsuzaki

Board of Directors

16/16(100%)

10 years,
6 months

16,900shares〇〇President andRepresentative Director

Board of Directors (Chairperson)
Remuneration Advisory Committee
Nomination Advisory Committee

16/16(100%)

2 years,
6 months

5,500
shares〇〇Satoshi Shimizu

Board of Directors

16/16(100%)

6 years,
6 months

3,500
shares〇〇〇〇Board of Directors

16/16(100%)

6 years,
6 months

4,300
shares〇〇〇〇Board of Directors—

Newly elected

9,490
shares〇〇〇Board of Directors
Remuneration Advisory Committee(Chairperson)
Nomination Advisory Committee

15/16
(94%)

10 years,
6 months

20,800sharesBoard of Directors
Remuneration Advisory Committee
Nomination Advisory Committee(Chairperson)

15/16
(94%)

5 years,
6 months

2,700
shares〇Board of Directors
Remuneration Advisory Committee
Nomination Advisory Committee

16/16(100%)

3 years,
6 months

2,800
shares〇—

Newly elected35,600shares〇Board of Directors
Board of Auditors

16/16(100%)

2 years,
6 months

600
sharesBoard of Directors
Board of Auditors

16/16(100%)

13 years,
6 months

19,900shares〇Board of Directors
Board of Auditors

14/16
(88%)

1 year,6 months

700
shares〇Name/Position

Masaaki Kanai

Vice Chairman and Director

Nobuo Domae

Senior Managing Director

Satoshi Okazaki
Director

Asako Shimazaki
Director

Isao Endo
Director

OutsideMasayoshi Yagyu
Director

Atsushi Yoshikawa
Director

Kei Suzuki
Full-time Corporate Auditor

Shingo Kawanokami
Corporate Auditor

Masaru Hattori
Corporate Auditor
OutsideJun AraiCorporate Auditor

Board of Directors
Board of Auditors (Chairperson)

〇

〇

〇

IT/Generaltechnologies

〇

〇

〇

Culture/Society

ESG/
Sustainability/
Diversity

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

—

〇

〇

—

〇

〇

Overseas
operations〇

Administration

Legal affairs/
Riskmanagement∙O utside Director; Audit andSupervisory Committee Member,
Members Co., Ltd.

〇

〇

—

∙ Outside Director, Monex Group, Inc.

〇〇

Concurrent positions

—

〇

〇

∙R
 epresentative Director, Cena
Corporation∙ Outside Director, Sompo Holdings,
Inc.
∙ Outside Director, Nextage Co., Ltd.

〇

〇

〇

〇

〇

〇

〇

〇

〇

∙O
 utside Director, Chubu ElectricPower Grid Co., Inc.

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

∙A
 dvisor, Nomura Real Estate
Development Co., Ltd.

—

—

〇

〇

〇

〇

〇

—

∙ Outside Director, Sumitomo
Mitsui DS Asset Management
Company, Limited∙ Outside Director, Kyowa Kirin Co., Ltd.

Note: The above does not encompass all of the experience and knowledge possessed by the officers. Only the major aspects are presented.
* As of August 31, 2021

59 MUJI REPORT 2021

MUJI REPORT 2021

60

Basic Information

Messages from Outside Directors
We are building an independent corporate culture to solidify ourbusiness foundation.

We will make further advances by thoroughly following the basics ofmanufacturing with our production partners.

“taking root in local society.” This is a very appealing strategy

logistics operations to are spread out around the world, athat is characteristic of the Company. The SDGs and ESG arestronger framework to control them is now essential. The

becoming household terms, and to that end I think MUJI’s core

Company must further raise efficiency as it expands its scale,concepts and origins have always been rooted in sustainability.

and never allow the risk of being unable to meet quality, delivery,

Simply stated, the times have caught up with MUJI, so Ryohin

and cost targets to materialize. Therefore, I believe the key to

Keikaku now has to take another step forward. Now is the time

success is to join hands with suppliers who understand ourfor the Company to raise all aspects of management – risk

philosophy and will cooperate with us to gradually reduce costs

management, governance, operations, and so on – to a higher

while maintaining quality through continuous improvements.

level. Consequently, there is a pressing need to recruit talented

To ensure human rights in the supply chain, we should

professionals from outside, in addition to in-house development

verify conditions locally with our own eyes. In addition, we mustof human resources. Collaboration between existing employees

sharpen our own skills and acquire the ability to engage with

who empathize with MUJI’s ideas and talented people fromsuppliers on an equal footing, with an eye on on-site conditions

outside will lead to further evolution. In fact, that change isand manufacturing standards as well as a focus on our leadershipalready starting to happen.

capability. Teaming with production partners who are prepared
to work in partnership will enable us to achieve higher goals.

It is also necessary to elevate the strategy from “sharing” to“empathy.” First of all, directors and other officers need to speak
policies in their own words. Division managers then need to talk

Energizing the Board of Directors with
Diverse Opinions

to area and store managers to develop employees who have a

We have time to chat with the chairman and president before

sense of ownership. This will take time and effort, but it will

Board meetings, which is an opportunity to talk frankly about theresult in employees empathizing with managers who put

items on that day’s agenda. We also receive briefings on thepassionately to division managers about the new strategies andIsao Endo
Outside Director

strategies into practice on the front lines, which will lead tostate of discussions, circumstances, and results of activities

actions that help achieve targets. In addition, the phrase “taking

Masayoshi Yagyu

root in local society” does not specify how or what we will

Outside Director

our opinions.

contribute. A key factor in achieving the goals of the medium-inside the Company, which is very useful in terms of formulating
Currently, the outside directors, all of whom have expertise

At a Major Turning Point, Board Discussions
Are Going Deeper

term business plan will be increasing the number of people who
do not seek answers from upper-level management, but findBringing Together Employees Who Share
Our Philosophy

in specialized fields, express their opinions freely. I provide

Since I was appointed as an outside director in 2011, MUJI has

and implement the answers in front-line operations – in other

Since I became an outside director, I have made dozens of visits

which are my areas of expertise, and I have been watching theaggressively opened stores overseas, and grown from a Japan-

words, independent employees. If we foster an independent

to factories in Malaysia and Vietnam that manufacture products

evolution of the Company’s factories and distribution centers. As

centered business into a global brand. However, some issues

corporate culture by developing independent employees, I

for MUJI, as well as factories, distribution centers and otherchairperson of the Nomination Advisory Committee, I also listen

have become apparent, such as excess inventories and core

believe we can establish a sustainable organization that is suitedsites in Japan. The basics of manufacturing are no different fromto the ideas of many candidates in various settings, makeinformation systems. Ryohin Keikaku is now at a major turning

to the Company.

the automotive parts manufacturer where I serve as an advisor.

judgments that take their performance into account, and selectpoint, and I see this as a reset period for achieving the new

At Ryohin Keikaku, employees with strong individuality whomonitoring and advice in the fields of production and logistics,

people who seem qualified.

share the Company’s philosophy of humbly developing products

Directors meetings are becoming more focused and substantial,

Overcoming Challenges and Bringing Out Our
Full Potential

as an antithesis to the mass consumption society, comeproducts are women. By adding more women to the Board ofand are being conducted with greater vigor – for example, bySome shareholders wonder why we can’t grow more when wetogether and work hard to develop and sell those products.

Directors, we can deepen discussions about MUJI’s various

sending back proposals that are not practical. Even though thehave such great potential, and feel our efforts are insufficient.

Board of Directors already has outside directors and outside

While we have unique strengths, I think there are certain

corporate auditors, I think that adding women and non-challenges we have been unable to overcome. At Board of

Cementing Relationships of Trust with
Production Partners

Japanese people to the Board will promote deeper discussions

Directors meetings up to now, we have conducted discussions

The Company has set the very ambitious targets of increasingfrom even more diverse perspectives.

about strategy, but there has also been considerable debate

sales by six times and profit by 10 times by 2030. To achieve

about dealing with operational issues. As an outside director

those targets, it has established two key pillars: strengthening

Creating an Independent Corporate Culture
Suited to the Company

who speaks for shareholders, I will continue to monitor

the supply chain to build a solid procurement network by 2024,

management while engaging in in-depth discussions to help theand creating a global merchandise headquarters. ProductWe are striving to achieve our vision for the period leading up to

Company truly overcome the issues it faces and build on its

planning and sales will be done by Ryohin Keikaku, but since2030 – “being an indispensable part of daily life for people,” andstrengths to achieve growth.

many of the companies that it outsources production andmedium-term business plan. Therefore, discussions at Board of

61 MUJI REPORT 2021

Finally, many of the customers who purchase MUJI

measures from more diverse angles, which will support theCompany’s further evolution.

MUJI REPORT 2021

62

Message from an Outside Corporate Auditor
A clear and consistent philosophy and support from local
communities are the keys to growth.

We aim to become a company that leads the sustainability
movement with the ideals of change and improvement.

people working on the front lines to speak up when they

Continually Asking “What Is a Good Product?”discover a risk. That is true risk management.

I have been an outside corporate auditor for about a year and a

Local Roots to Support Organic Growthhalf. My impression of Ryohin Keikaku is that it is a company
that supports daily living by bringing people “good products”

The medium-term business plan is aimed at establishing athat are truly necessary for their lives, and products with no frills.

business structure and local management teams to support

Up to now, Ryohin Keikaku has expanded its business withorganic growth in each overseas market. In entering overseas

considerable speed. The Company’s values embodied by MUJI

markets, we first need to clearly define the objective of ourstores have clearly been accepted by many people.

expansion in that country or region – for example, do we want tohave also begun to move in a new direction after completing

Change, Improvement and the Challengeof Sustainability

Chapter 11 proceedings in August 2021, but our objective is not

Ryohin Keikaku’s core value is “to contribute to people andjust to expand overseas operations; it is vital to achievesociety.” However, I feel that the lifestyles of people around thesustainable growth by developing stores in countries andworld are changing dramatically. I have the sense that society

regions where there is a need for MUJI products and services.

and lifestyles will not go back to the way they were before even

A key element in putting overseas expansion on track is human

after the COVID-19 pandemic ends. To meet the constantly

resources. It is important to appoint local employees who likechanging requirements of society, Ryohin Keikaku needs to

MUJI and want to be involved in MUJI’s management tochange the added value it creates while preserving its coremanagerial positions. When I visited our stores in Vietnam andvalue. A major key for any company’s growth is its ability to

the Philippines, MUJI’s concept was displayed prominently on

respond to changing markets. We cannot rest on past

the walls. If that leads people who share MUJI’s ideology andsuccesses but must reform by focusing our energy on the things

want to work with us to join the Company, and if more of them

we should change, and maintain and further strengthen the

can grow and master the basics of their job, we will broaden our

things we should not change. Whether we will be able to keep a

Jun Araiaccess to a better pool of human resources.

good balance between these two objectives will depend on theOutside Corporate Auditor

sell products or source products there? Operations in the U.S.

Atsushi Yoshikawa
Outside Director

success of the current medium-term business plan. This

Maintaining MUJI’s Uniqueness Is Most
Important

Becoming a Company That Is AppreciatedWhen I was appointed outside director, the agenda items andCompany is implementing wide-ranging reforms, including in

based on premises that have no room for compromise – notI have been an outside director for three years. I feel that MUJI

materials for Board meetings were not always provided ahead ofstore expansion, product development and sales, personnel,

time, but that has since been improved. For major topics ofneglecting the quality and safety of products, for example.

products are made from the viewpoint of people, with a clear

and the compensation system.

and consistent philosophy. The presence of MUJI products has

discussion, such as the new compensation system, outside

also grown naturally in my own home. As a user of those

directors from diverse backgrounds express their opinions and“contributing to people and society,” is a brand that has highhave discussions in the Executive Advisory Committee, which is“defensive” governance. For Ryohin Keikaku, which is aiming to

products, I think the reason for MUJI’s existence would be lost

affinity with sustainability, which is becoming increasingly

separate from the Board of Directors. I am also involved in theachieve its “Second Founding,” strengthening defensive

if customers thought products didn’t have that MUJI uniqueness

important worldwide. I would like Ryohin Keikaku, which

director appointment process as a member of the Nomination

governance is critical. For example, to ensure that identificationor suspected the company was just trying to clear out

continues to support many people’s daily lives, to strive to be a

Advisory Committee, and have been considering potentialof risks and rapid reporting and response when matters of

inventory. I believe the most important risk management task isleader in ESG management and go forward with thecandidates for the next representative director since about aconcern arise are not delayed due to expansion of the scale offor all employees to work on maintaining the qualities that

determination to be a company that leads sustainability at ayear ago. I also have opportunities to judge their character, andbusiness, steps are being taken such as creating a system tomake MUJI unique.

global level.

correctly grasp information including product trends in a timely

But implementing risk management does not mean that all
risks will go away. When a risk manifests, it is important that we
not avert our eyes, but take swift, appropriate action to address

challenge is positioned as the “Second Founding,” and the

MUJI, which was created from the core value of

have been able to fully vet them from my position as an outside
director.
Currently, the Company has set forth a management

Boosting the “Second Founding” from Diverse
Perspectives

If reform and improvement are “aggressive” governance,then enhancement of internal controls and the like would bemanner.
At Board of Auditors meetings, we have discussions frommultiple viewpoints, and express our opinions to management.

it. Senior management in particular, should openly and promptly

philosophy of “public-interest and people-centered management,”

Some hold the view that confirming the legality of management

and is committed to becoming a leader in ESG management. I

As a corporate auditor, I am committed to boosting the “Second

share information about risks within the Company, and sincerely

operations and the details of financial statements is the primary

am committed to doing my part as an outside director to ensure

Founding,” strategy, which is aggressive governance, while closely

respond to them. If employees only look at the work in front ofrole of a corporate auditor, but I believe that we also have thethat the Company makes products that are unique to MUJI andwatching the progress of defensive governance improvements.

them, they might overlook risks or turn a blind eye to risks inimportant duty of judging whether management always thinks

their own department. In my view, creating an organization inreflect the ideas it has upheld since its founding, so that people inabout Ryohin Keikaku and society before moving forward. The

which employees pay close attention not only to their own

the communities where we operate will be glad that MUJI is there.

pursuit of profit is important for a company, of course, but that is

department but also to earlier and later processes encourages

63 MUJI REPORT 2021

MUJI REPORT 2021

64

Basic Information

Corporate Governance
Basic Policy

１

Number of meetings: 16
Attendance rate: 98%

We place a high priority on the creation of a highly transparent management system based on our belief that establishing a management
structure and internal control system and improving corporate governance will lead to continuous improvement of our corporate value. In
addition, we strive to maintain and develop good relationships with all stakeholders (shareholders, customers, employees, society, andpartner companies), and to proactively disclose information in a timely manner.
2

Corporate Governance System

Board of Directors

Board of Auditors
Number of meetings: 15
Attendance rate: 100%

Shareholders’ Meeting
Appointment/
Dismissal

Board of Auditors

2

Board of Directors

1

Two inside corporate auditors
Two outside corporate auditors

5

Six inside directors
Three outside directors

AdviceAdviceAudit

3

Remuneration Advisory Committee
Two inside directors
Three outside directors

Appointment/
Dismissal

Appointment/Dismissal

Audit

Appointment/
Dismissal

3

Accounting Auditor

Nomination Advisory Committee

Supervision
Report3

Executive Advisory
Committee
Accounting
audit

The Company has adopted an audit board system. Currently, the Board of Auditors comprises four members(including one full-time corporate auditor). Two of the four members are appointed as independent officers inaccordance with rules stipulated by the Tokyo Stock Exchange and these members are registered to the TSE.
The Board of Auditors audits the directors’ execution of their duties by attending Board meetings and checking
important documents. In addition, the Board of Auditors regularly liaises with the Internal Audit Office, which
conducts internal audits, and with the accounting auditor, who conducts accountancy services.
The Remuneration Advisory Committee (consisting of three outside directors, including one chairperson, and two
inside directors) advises the Board of Directors on the payment of directors. The Nomination Advisory
Committee (consisting of three outside directors, including one chairperson, and two inside directors) advises
the Board of Directors on the nomination of directors.

Remuneration Advisory Committee: 7 times, 100%
Nomination Advisory Committee: 6 times, 100%

Two inside directors
Three outside directors

Representative Directors
ReportRemuneration
Advisory Committee
Nomination
Advisory Committee

Currently, taking into account the size of the Company, its organizational status and staff mobility, the Board
comprises six inside directors (six directors doubling as executive officers) and three outside directors, who wereappointed as independent directors in accordance with rules stipulated by the Tokyo Stock Exchange, and who
are registered to the TSE. The supervisory functions and managerial responsibility of the Board of Directors areclearly stipulated, and we also promote delegation of authority, including reviews of the board system anddecision-making systems as appropriate, in order to accelerate the implementation of processes.

4Internal Audit Office

The Internal Audit Office, which currently comprises seven members, conducts internal audits. The office audits
the status of compliance with internal rules and manuals at stores and headquarters, the appropriateness andeffectiveness of overall business activities and procedures, etc. Audit results are regularly reported to therepresentative directors and the Board of Directors.

5

Accounting Auditor

As for financial audits, we have established an environment for fair auditing with a team comprising two certified
public accountants (Ms. Miho Kawabata and Mr. Yosuke Sato), six assistant certified public accountants, and 14
other members associated with KPMG AZSA LLC.

6

Advisory Board

The Advisory Board is an organization unique to Ryohin Keikaku. It meets to discuss and make policy on thepath MUJI should take and how to respond to the times based on our founding philosophy and sense ofincongruity with society.

4Internal Audit Office
ReportInternal audit

Business Process Standardization Committee

Management Executive Meeting
Sales Meeting

Compliance and Risk Management Committee
Helpline

Merchandise Strategy Committee

6

Advisory Board

Executive officers

Consultation

Head of Each Department

Group Companies
Employees

Execution of duties is led by the organizational bodies (primarily the Board of Directors) that review and confirm policies and issues related
to management and business operations. At Board of Directors meetings, which are held once a month in principle, important management
decisions are made, and the directors’ execution of duties is monitored. In the Executive Advisory Committee, which is convened by the
representative director, key issues and measures are examined. Appointment of people involved in management and the plan for amount of
remuneration in line with business results are decided through the Nomination Advisory Committee and the Remuneration Advisory
Committee. We have also established the HR Succession Planning Committee, Business Process Standardization Committee, Complianceand Risk Management Committee, Merchandise Strategy Committee, Occupational Safety and Health Committee, and Quality
Improvement Committee as forums for cross-organizational deliberation and implementation of measures for Company-wide issues. The
Board of Auditors, which audits management and operations in general, comprises four corporate auditors (two of whom are outside
corporate auditors) and is a highly independent organization. It regularly meets and liaises with the accounting auditor and the Internal Audit
Office, which oversees internal audits, and reports and exchanges information on accounting and compliance matters at meetings of theBoard of Auditors. The full-time corporate auditor is a regular member of the Business Process Standardization Committee and works tostay informed about activities in front-line operations. In addition to these systems, we have three outside directors on our Board of
Directors and are strengthening our governance system.
Monitoring of directors’ execution of their duties is done by the outside directors and outside corporate auditors, and we believe that
our appointment of three outside directors and two outside corporate auditors has made adequate verification from professional andobjective viewpoints possible.

65 MUJI REPORT 2021

Assessment of
Effectiveness of theBoard of Directors

The Board of Directors conducted an analysis and assessment of the Board’s effectiveness based on thecorporate governance policy set by the Company. The results of that assessment are summarized below.

Summary ofAssessment Process(1) The Board of Directors set the following evaluation categories it believes are necessary for assessment of the Board’s
effectiveness and conducted a survey of directors and corporate auditors.
Evaluation categories in the questionnaire:1) Composition of the Board of Directors2) Operation of the Board of Directors
3) Enhancement of discussions in the Board of Directors
4) System supporting the Board of Directors
5) Enhancement of relationship with shareholders and other stakeholders
6) Other comments(2) Based on the assessments of the directors and corporate auditors with the above questionnaire format, the Board
secretariat summarized the results.
(3) Based on these results, the Board held discussions on each issue.

Results of
the Assessment(1) Summary of Scores (Average score for each category)
Note: Assessment scores are set on a scale of 1 to 5, with “1” meaning improvement necessary, “3” meaning the minimum necessary level, and “5”meaning adequate.

1) Composition of the Board of Directors (Average score: 3.9) (Previous assessment: 4.3)
2) Operation of the Board of Directors (Average score: 3.6) (Previous assessment: 3.4)
3) Enhancement of discussions in the Board of Directors (Average score 3.7) (Previous assessment: 3.6)
4) System supporting the Board of Directors (Average score: 3.4) (Previous assessment: 3.1)
5) Enhancement of relationship with shareholders and other stakeholders (Average score: 3.4) (Previous
assessment: 3.3)
(2) Summary of Assessment Results
The results of the questionnaire above showed that the Board of Directors is evaluated as exceeding the minimum
necessary level for the most part. However, we identified issues including the need to increase opportunities formaking reports and discussing business execution in relation to business plans and strategies. Other issues included
enhancing the system for supporting the Board of Directors through timely information sharing and further enhancementof opportunities to exchange information among independent directors.
MUJI REPORT 2021

66

Corporate GovernanceFuture Initiatives

Policy for Appointment
and Dismissal of Directors

Ratio by Type of Compensation
The ratio of performance-linked compensation for directors of the Company increases the higher the position.
The ratio of base compensation, performance-based bonuses, and non-monetary compensation, etc.,
is designed so that the composition will be as shown in the table below if 100% of the target is achieved.
In addition, performance-based bonuses range from 0% to 200%, depending on the level ofachievement. The percentage of long-term incentive (LTI) non-monetary compensation varies from 30%
to 100% depending on the level of target achievement.

Based on the issues identified through the effectiveness assessment of the Board of Directors, we will work on thefollowing measures to further enhance the Board’s effectiveness.
(1) E nhancement of strategies related to medium-term business plans and regular reporting and discussions regarding
the status of revolving issues with business execution(2) Enhancing exchange of opinions among independent directors and optimization of opportunities for information sharing(3) Ensuring early distribution of documents for Board of Directors meetings in advance(4) Enhancement of appropriate disclosure of information to all stakeholders

Policy for Appointment of Officers
In nominating directors, the Nomination Advisory Committee, of which independent outside directors
make up the majority of members, discusses each candidate’s qualifications, taking into consideration
their previous experience, accomplishments, ability to execute tasks, and character, and reports its
recommendations to the Board of Directors. In addition, when nominating outside director candidates,
we select management professionals who have experience, accomplishments, and knowledge in theirrespective fields. The nomination is discussed by the Nomination Advisory Committee, taking into
consideration the candidate’s opinions and judgments that will contribute to enhancement of theCompany’s medium- and long-term corporate value, and is then reported to the Board of Directors.

(%)

Performance-based
bonuses

Restricted shares

Representative director

33.3

33.3

33.3

100

Director

40

40

20

100

Outside director

100

—

—

100

Total amount by type of compensation (Million JPY)
Base
compensation

Stock
options

Bonuses

251

171

43

36

–

43

6

(excluding outside corporate
auditors)

12

12

–

–

–

–

1

Outside officers

50

50

–

–

–

–

6

Officer category

Directors(excluding outside directors)

Support System for Outside Directors and Corporate Auditors
There is no specific person or department in charge of the support system for outside directors andoutside corporate auditors, but the Corporate Planning Office provides information, including distributing
the agenda of Board of Directors meetings in advance, and the Internal Audit Office, which conducts
internal audits, assists outside auditors in execution of their duties.

Determination Process
Base compensation:	Determined according to position after discussion by the Remuneration
Advisory Committee, of which outside directors make up the majorityof members, and the results of the discussion are reported to theBoard of Directors.
Performance-based bonuses:	Determined after discussion by the Remuneration Advisory
Committee, of which outside directors make up the majority, and theresults of the discussion are reported to the Board of Directors.
Non-monetary compensation:	Determined after discussion by the Remuneration Advisory
Committee, of which outside directors make up the majority, and theresults of the discussion are reported to the Board of Directors.

67 MUJI REPORT 2021

Non-monetary
Retirement compensation,
benefits
etc. included
at left

1. C
 ompensation paid to the Company’s directors (excluding outside directors) in the form of share acquisition rights issued
as stock options was approved at the 37th Ordinary General Meeting of Shareholders (May 25, 2016) to be JPY 100 million
or less per year. The amount above is share acquisition rights granted to six directors, as approved at the Board of
Directors meetings held on June 24, 2020 and December 23, 2020.
2. B
 onuses are directors’ bonuses charged to expenses as provision for bonuses for directors (and other officers) during the
fiscal year.
3. N on-monetary compensation of directors (excluding outside directors) is all in the form of stock options.
4. T he total amount of compensation of each officer is not disclosed as there are no officers whose total compensation
exceeded JPY 100 million.
5. In addition to the compensation above, the Company issues paid stock options for which payment is made at fair value.

Training Policy
We encourage directors and corporate auditors to learn about matters such as the responsibilities,
duties and legal risks of officers, and to work on self-improvement such as acquiring businessknowledge of the operations they supervise. External training is also provided as necessary.
Policy for Determining Executive Remuneration
To enhance corporate value, remuneration of the Company’s directors consists of three types: paymentof base compensation, which is a fixed amount according to the director’s position within the total
remuneration limits set by the General Meeting of Shareholders; payment of a performance-based
bonuses as a short-term incentive linked to the Company’s performance; and non-monetarycompensation as a long-term incentive to continuously increase long-term corporate value andshareholder value.
Remuneration of outside directors and corporate auditors consists solely of base compensation,and there are no components that fluctuate with performance.

Number of
officers
eligible

Total
compensation(Million JPY)

Corporate auditors

Executive Remuneration
System

Total

Base compensation

Amount of compensation by officer category, amount by type of compensation and number ofofficers eligible

Number and Term of Directors
The Company’s Articles of Incorporation stipulate that the number of directors shall be no more than 11.
For the term of directors, a proposal to shorten the term from two years to one year was approved at theGeneral Meeting of Shareholders held in November 2021, for the purposes of clarifying the management
responsibilities of directors and creating a management structure that enables us to respond quickly tochanges in the operating environment.

Support and Training
Policy for Outside
Directors andCorporate Auditors

Non-monetarycompensation

Monetary compensation

Composition

About CrossShareholdings

Basic Policy
We will consider holding stocks as cross-shareholdings only in cases where the effects, such as
facilitation of business, are recognized as significant. We specifically verify those effects to determine
whether the purpose of holding the stock, and the related benefits and risks, are commensurate with thecapital cost. For cross-held stocks whose effect has diminished, the Board of Directors judges therationality of continuing to hold the shares each year, and if it judges that holding them is no longer
appropriate, we reduce the cross-held shares after considering the effect on the stock market and theCompany’s financial condition.
In exercising voting rights of shares held as cross-shareholdings, we vote appropriately after judging
the pros and cons of each proposal by comprehensively examining factors such as whether the proposal
will contribute to enhancement of the investee company’s corporate value, whether it will contribute toenhancement of Ryohin Keikaku’s sustainable growth and medium- and long-term corporate value, andwhether it conforms to the purpose of holding the shares.
(Million JPY)

Cross-Shareholdings
Number of stocks
Total amount on balance sheet

2018/2

2019/2

2020/2

2020/82021/8

8

6

5

5

4

12,321

4,199

3,791

3,792

4,730

MUJI REPORT 2021

68

Basic Information

Compliance and Risk Management
Basic Approach

Any person may make a report to the helpline by telephone, email (including those using an anonymous
system) or in person.
The results of investigations, with the exception of the names of whistleblowers, will be reported to thepresident, and, if necessary, internal procedures may be taken as provided in the Rules of Employment,
including the formulation of measures to prevent recurrence, the issuance of work orders and instructions,and disciplinary action and other personnel measures, as well as necessary external measures such aspress releases, media relations and criminal charges.
A total of 98 consultations were received in the fiscal year ended August 31, 2021.

We believe that the foundation for gaining the trust and support of local communities is not only legal compliance, but also fair, honest andethical conduct by all Group employees. Therefore, the Ryohin Keikaku Group Compliance Code of Conduct has been established and isposted on the Company website as well as in a booklet distributed to directors, corporate auditors, executive officers and employees. The
Group Compliance Code of Conduct is reviewed by the Board of Directors periodically, and decisions regarding its revision are made after
discussion at meetings of the Board of Directors.

Compliance and Risk Management Structure
Board of Directors
ReportingCompliance and Risk Management Committee
Personal information protection
Disaster risk
Domestic/overseas economic conditions
Human rights in supply chain, etc.

Reporting of individual risks
Business
Divisions

Anti-Corruption
Measures

Initiatives for Fostering
Compliance AwarenessInternal Reporting
System69 MUJI REPORT 2021

Domestic Group
Companies

Overseas Group
Companies

Risk management is overseen by the Complianceand Risk Management Committee under thesupervision of the Board of Directors. The
Compliance and Risk Management Committee,
chaired by an officer of the Company, meetsregularly to gather information on compliance andrisks and to further discuss important issues.
Matters discussed by the Compliance and Risk
Management Committee are regularly reported to
the Board of Directors and are shared with directors
and corporate auditors. The committee isindependent of the Board of Auditors, and ischaired by a different person from the chairpersonof the Board of Auditors.

We have established anti-corruption regulations (Ryohin Keikaku Group Anti-Bribery Regulations, AntiBribery Guidelines) approved by the Board of Directors, which aim to prohibit bribery of public officials
and ensure compliance with anti-corruption laws and regulations with regard to entertainment, gifts,
invitations, donations, facilitation payments, insider trading, money laundering, embezzlement,
obstruction of justice, etc. Bribery is explicitly prohibited in these regulations. Entertainment, gifts, invitations
and donations are subject to the prior approval of either the department manager or the Compliance andRisk Management Committee chairperson, who approves only those items that are not deemed to bebribery. In addition, the Company seeks to fully prevent corrupt practices through the implementation of
employment regulations stipulating that employees shall not offer improper entertainment, lend or borrowmoney or goods, or give or receive money or goods improperly in the course of business.
The Ryohin Keikaku Group Compliance Code of Conduct has been established to promote compliance withethical standards and social norms, laws and internal regulations through in-house training programs andawareness raising activities. In accordance with the Group Compliance Code of Conduct, anti-harassment
training is conducted regularly for newly appointed managers in order to prevent harassment and improve
management skills. From September to December 2020, approximately 130 employees participated in thistraining. The Ryohin Keikaku Group also regularly holds training sessions for its employees to ensure thatthey are fully aware of the anti-corruption policies. In the fiscal year ended August 31, 2021, no employees
were disciplined or dismissed for violation of our anti-corruption regulations or for violations of regulations
related to corruption as set forth in the employment rules. In addition, we have not paid any fines, penalties
or settlements in connection with corrupt practices.
We have established the Ryohin Keikaku Group Helpline to improve the effectiveness of the self-correction
process, control reputational risks, ensure public trust and protect whistleblowers. The helpline helps toprevent and detect legal violations, misconduct and harassment at an early stage, and also adds to thecompliance knowledge of officers and employees.
This support system is available to all employees of Ryohin Keikaku and its domestic and overseas
subsidiaries. This includes directors, employees (including contract employees, partner employees andpart-time workers) and temporary employees.

Tax Policy

The overall aim of the tax policy is to reflect and support our business. The policy covers issues including
ensuring a sustainable tax rate, mitigating tax risks in a timely and cost-efficient manner and complying
with applicable tax laws and regulations in the countries or regions in which the Group operates.
We are committed to:• Complying with all applicable tax laws and regulations in the countries or regions in which the Group operates. We will also
follow the standards regarding tax activities issued by international organizations (OECD, EU, UN, etc.).

• Minimizing the tax risk arising from legislative and regulatory changes in each country or region.
• Applying diligence and due care in our management of the processes and procedures by which all tax-related activities areundertaken, and ensure that our tax governance is appropriate.

Our Approach to
Risk Management

We identify and assess potential risks, and depending on the possible impact and likelihood of
manifestation, take measures to minimize such risk.

Risk Management
Initiatives

The Compliance and Risk Management Committee has prepared a risk management list to help eachdepartment recognize possible risks and understand how to respond to them. The risk management list
corresponds to Ryohin Keikaku’s operations manual, ensuring that information on specific responses andmeasures is made easily accessible. The Compliance and Risk Management Committee meets at least
twice a year to determine issues, discuss responses and monitor the progress of responses. It reports theresults periodically to the Board of Directors. A reporting contact point has been set up to collectcomprehensive information on risks. Meetings of committees in various specialized fields are also held
regularly. In particular, product quality, the Group’s most important operating resource, is discussed fromvarious angles in the Quality Improvement Committee, with the aim of further enhancing quality control.

Response to Natural
Disasters

Information Security

We ensure the safety of our employees in the event of a natural disaster. We have introduced a systemthat enables employees to quickly report status using a smartphone application, and in order to improve
effectiveness, we regularly conduct safety confirmation drills and lectures on initial responses to disasters.
The headquarters office stockpiles foodstuffs on a rolling stock basis, and stores are equipped withflashlights and other emergency supplies.
We have established a global information security policy, and work to ensure the security of our
information assets.
Global Information Security Officer

Countermeasure
instruction/auditing

Information Security Officers ofEach Company

Director in charge of IT Services Division

Reporting

IT Services Division Manager

Appointment

Reporting

Countermeasure
instruction, auditing
instruction

Information Security Office (Ryohin
Keikaku Co., Ltd.)

Office contact point

Person Responsible forInformation Security

IT Services Division: Division manager,
person in charge

Consultation,
reporting

Person in charge of IT Services

MUJI REPORT 2021

70

Basic Information

Financial and Non-Financial Highlights

Operating Revenue

Net Assets/ROE*

Operating Profit/
Operating Profit Ratio

Number of Employees/
Percentage of Female Employees*
Number of employees at the end of the period.

(Million JPY)

(Million JPY)(%)

(Million JPY)(%)

500,000

50,00015

240,000

40

453,689438,71345,286400,000 379,551

12
10.9

300,000

2,234

182,992

180,000 174,426

30

2,000

50

80

9.4

9

120,000
18.6

20

18.8

60

1,500

6

11.8

60,000

252
40

35.7

35.0

34.5

35.0

228
200

150

30

100

20

183

173

17.3
54.0

20,000

211

198

200

300

221

216

210

2,035

Number of New Employees
Hired*

(%)

250

36.7

8.3

179,392

2,285

100

36,38030,000200,000

2,343

195,189

11.9

40,000214,871

208,492

44,74342,447

409,697

(%)

2,446

2,500

Number of Women in Managerial
Positions/Percentage of Total
Managerial Positions*

10

55.0

56.2

54.7

55.3
40

1,000

100

75
100,000

10,00000872
2018/2

2019/2

2020/2

2020/82021/8

Total Assets/ROA*

2018/2

2019/2

2020/20.5

2020/82021/800(60,000)(%)

393,357 40

400,000

20.3

0

2018/2

2019/2

2020/2

2020/82021/800

2018/2

2019/2

2020/2

2020/8Percentage of total managerial positions (Right scale)

Number of Stores (Total)
in Japan and Overseas(Includes licensed stores, Café&Meal MUJI and IDÉE)

50

50

1,033

30.1

1,029

(t-CO2)80

30,000

474

517

556

550

25,0002021/8

Total of newly graduated and mid-career hires

Percentage of
Outside Directors

15.0

12.0

33.3%

44.2

10.7

40

12.0
10.1

9.5
9.0

15,0008.82021/8

11,614

20

12.3

22.2
300
10

2020/826,26325,10920,000

571

600

10

2020/218.0

18.4

100,000

2019/2

60

31.8

20

2018/2(t-CO2 per JPY 100 million)

29,486
27,073

66.9

928

30

0

Note: Ryohin Keikaku Co., Ltd. (Scope 1 and 2) only

1,068

900

30.0

CO2 Emissions/ Emissions per
Unit of Operating Revenue

( t)

975

40

36.4

34.5

1,200

40.0

41.1

38.7

Volume of Textile ProductsCollected*

店舗数（合計）国内／海外

20

12.8

0

2021/8

Number of women in managerial positions (Left scale)

(%)

30

(10)

Percentage of female employees (Right scale)

260,075
238,3132021/8

10

Number of employees (Left scale)

(JPY)

30

2020/850

ROE (Right scale)* ROE (Net profit ÷ Shareholders’ equity)40

306,5122020/220

Net assets (Left scale)343,918

300,000

2019/2500

Operating profit ratio (Right scale)

配当金／配当性向(Million JPY)

(8.8)
2018/20Operating profit (Left scale)

Dividends Per Share/
Dividend Payout Ratio

総資産／ROA

200,000

3

10

24.2

20
454

458

477

479

10,000

6.0

5,000

3.0

17.1

497

5.0

0

0.2
2018/2

2019/2

2020/2

2020/82021/8

Total assets (Left scale)
ROA (Right right)* ROA (Ordinary profit ÷ Total assets)000
2018/2

2019/2

2020/2

2020/82021/8Dividends per share (Left scale)
Dividend payout ratio (Right scale)Note: The dividend payout ratio for the period
ended August 31, 2020 is not presented as
the Company recognized net loss per share.

0

2018/2

2019/2

2020/2

2020/82021/80

2018/2

2019/2

2020/2

2020/82021/80

2018/2

2019/2

2020/2

2020/8

Number of stores overseas

CO2 emissions (Left scale)

Number of stores in Japan

Emissions per unit of operating
revenue (Right scale)

2021/80.0* Ryohin Keikaku Co., Ltd. only

Note: 2020/8 was a six-month period from March 1 to August 31, 2020 due to a change in the fiscal year.

71 MUJI REPORT 2021

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72

Basic Information

11-Year Summary(Million JPY)
2011

2012

2013

2014

2015

2016

2017

2018

2019

2020/2

2020/852021

169,748

178,186

188,350

220,620

260,254

307,532

333,281379,551

409,697438,713

179,392

453,689(Domestic)

—

—

—

171,923

182,701

198,449

215,716

234,791

246,269

267,864

122,428

296,998(Overseas)

—

—

—

48,472

77,546109,080

117,563

144,758

163,425

170,846

56,961

156,691

Gross operating profit

77,271

81,59687,376

101,665

122,831

150,451

165,861

191,819

211,380

217,628

83,694

222,334

Selling, general and administrative expenses

63,371

66,15869,02480,74998,984116,012

127,583

146,532

166,636

181,248

82,821

179,887

Operating profit

13,90015,43818,351

20,916

23,84634,43938,27845,28644,74336,380872

42,447

8.2

8.7

9.7

9.5

9.2

11.2

11.5

11.9

10.9

8.3

0.5

9.4

Ordinary profit

14,22916,135

19,76023,047

26,60232,70038,582

45,98545,86136,377563

45,369Profit attributable to owners of parent

7,859

8,850

10,97017,096

16,623

21,71825,831

30,11333,84523,253(16,917)33,903

Cash flows from operating activities

7,155

9,729

13,17615,117

14,61926,133

19,742

46,982

23,68024,452(1,758)61,447

Cash flows from investment activities(3,381)(4,747)(4,945)(17,842)(22,193)(8,647)(9,856)(14,290)(5,492)(31,435)(4,239)(13,538)

Cash flows from financing activities(6,075)(3,120)(2,540)(5,385)

11,377(6,520)(14,361)(21,759)(9,505)(11,467)

63,722(15,162)

Depreciation

3,268

3,201

3,186

4,179

4,887

6,816

7,543

8,644

9,867

17,622

10,35818,969Total assets

97,481

102,293

119,360

140,229

186,947

200,919

214,705

238,313260,075

306,512

343,918

393,357

Net assets

78,502

83,52896,050111,015

128,670

143,173

157,018

174,426

195,189

208,492

182,992

214,871Return on equity (ROE) (%)

10.3

11.1

12.5

17.0

14.3

16.4

17.7

18.6

18.8

11.8

(8.8)

17.3

Equity ratio (%)

78.9

80.0

78.3

76.9

67.0

69.4

71.3

71.3

73.8

66.6

52.4

53.9

Return on assets (ROA) (%)

14.5

16.2

17.8

17.8

16.3

16.9

18.6

20.3

18.4

12.8

0.2

12.3

Turnover of merchandise (%)

—

—

—

3.73

3.10

2.89

2.55

2.55

2.44

2.28

1.87

2.19

28.59

33.04

40.95

64.46

62.75

81.84

97.50

114.70128.9288.47(64.32)128.90287.10305.56348.80407.19472.37524.79579.18647.68725.83775.77684.94806.75

Dividends per share (JPY)

11.0

11.0

11.0

15.5

19.0

24.6

29.3

34.5

38.7

36.4

5.0

40.0

Dividend payout ratio (%)

38.5

33.3

26.9

24.0

30.3

30.1

30.1

30.1

30.0

41.1

—

31.8

Number of MUJI stores in Japan

359

372

379

385

401

414

418

419

420

437

438

456

Number of MUJI stores overseas

134

163

206

255

301

344

403

457

497

533

527

546

Total sales floor space in Japan (m2)2

261,431

263,177

265,037

270,250

282,083

289,899

297,001

306,316

319,698

359,141

375,446

417,057

Number of employees
Number of temporary employees3

2,595

2,734

3,069

4,101

4,795

5,653

6,992

8,128

9,137

9,615

9,046

8,882

4,387

4,721

5,307

6,934

7,242

7,877

9,203

9,254

10,233

10,825

8,050

9,281

—

—

—

1,407

3,367

8,850

12,28916,29520,44542,741

49,38059,297

Profit and Loss (Consolidated)
Operating revenue

Operating profit ratio (%)

Financial Position (Consolidated)

Key Performance Indicators (Included inconsolidated key financial indicators)

Per-share Data
Earnings per share (EPS) (JPY)1
Net assets per share (BPS) (JPY)1

1

Other Data

Cumulative total of registered members(including MUJI passport) (thousand people)4

1. The Company conducted a 10-for-1 share split of its common shares on September 1, 2019. The amounts of earnings per share, net assets per share, anddividends per share are presented assuming that the share split was conducted at the beginning of the fiscal year ended February 2011.
2. Total sales floor space of directly managed stores, licensed stores and Seiyu
3. Average number of employees per year based on an eight-hour workday calculation method
4. Registered members of external social media sites and various communication apps in Japan have been included from the fiscal year ended February 2019and from the fiscal year ended February 2020 for mainland China.
5. 2020/8 was a six-month period from March 1 to August 31, 2020 due to a change in the fiscal year.

73 MUJI REPORT 2021

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74

Basic Information

Consolidated Financial Statements
Consolidated Balance Sheets(Million JPY)
As of August 31, 2021

(Million JPY)

(For reference)
As of August 31, 2020

As of August 31, 2021

(For reference)
As of August 31, 2020

Liabilities

AssetsCurrent assets

Current liabilities

141,716

55,923

Accounts payable-trade25,541

19,507

Short-term borrowings

4,630

4,482

Current portion of long-term borrowings

67,081360

Accounts payable – other

9,966

9,323

Accrued expenses

6,196

5,389

Income taxes payable

12,702

1,536

Lease obligations

8,357

7,253

—

3,220

1,193

964

Provision for bonuses for directors (and other officers)

66

0Provision for point card certificates

105

198

5,874

3,686

36,770105,001

Long-term borrowings

5,000

71,963

Deferred tax liabilities

820

1,970

24,77225,551

74

47

6,103

5,470

178,486

160,925

209,709

181,574

Share capital

6,766

6,766

Capital surplus

27,922

10,900Retained earnings

205,995

177,874

Treasury shares(30,973)(13,965)

2,487(1,419)

2,325

1,605

Deferred gains or losses on hedges

485

674

Foreign currency translation adjustment(324)(3,699)

Share acquisition rights

605

931

Non-controlling interests

2,068

1,905

Net assets

214,871

182,992

Liabilities and net assets

393,357

343,918

269,047

224,005

135,752

92,308

8,742

9,215

106,164

104,988

Work in process

204

233

Supplies

91

63

Accounts receivable – other

11,836

11,930

Other

6,267

5,304

(11)

(40)

124,310

119,912

Property, plant and equipment

67,06067,810

Buildings and structures

28,04427,262

Machinery, equipment and vehicles

1,591

1,968

Tools, furniture and fixtures

8,730

8,948

Lease obligations

1,537

1,866

Provision for retirement benefits for directors (and other officers)

49

57

26,43227,002673

704

29,47924,180Goodwill

2,439

2,819

Software

24,885

19,267

Other

2,154

2,094

27,77027,921

Investment securities

4,730

4,108

Valuation difference on available-for-sale securities

Deferred tax assets

2,634

2,110

Leasehold and guarantee deposits

19,595

18,624

Other

920

3,195

Allowance for doubtful accounts

(110)

(116)

393,357

343,918

Cash and deposits
Notes and accounts receivable – trade
Merchandise

Allowance for doubtful accounts
Non-current assets

Land
Leased assets
Right of use assets
Construction in progress
Intangible assets

Investments and other assets

Assets75 MUJI REPORT 2021

Lease termination liability
Provision for bonuses

Other
Non-current liabilities

Other
Liabilities
Net assets
Shareholders’ equity

Valuation and translation adjustments

MUJI REPORT 2021

76

Consolidated Financial Statements

Consolidated Income Statements(Million JPY)
Fiscal year ended
August 31, 2021 (September
1, 2020 to August 31, 2021)

Fiscal year ended
August 31, 2020 (March
1, 2020 to August 31, 2020)

Operating revenue

453,689

179,392

Operating costs

231,355

95,698Operating gross profit

222,334

83,694

Selling, general and administrative expenses

179,887

82,821

Operating profit

42,447872

Non-operating income

4,420

637

Interest income

258

123

Dividend income

103

73

Sponsorship money income

99

26

2,714

67

Subsidy income

526

89

Rental income

106

57

Reversal of allowance for doubtful accounts

34—

Foreign exchange gains

Share of profit of entities accounted for using equity method

7

8

Other

569

189

Non-operating expenses

1,498

946

1,395

710

Interest expenses
Commission expenses

00

Loss on cancellation of contracts

3

170

99

66

Ordinary profit

Other

45,369563

Extraordinary income

4,922

0

Gain on sales of investment securities

118—

Gain on sales of non-current assets

721

0

260

—

3,135

—

Gain on step acquisitions
Gain on forgiveness of lease cancellation liability
Gain on reversal of share acquisition rights

677

—

9

—

1,702

18,677

1,168

14,265

278

1,169

—

3,236

250

—

5

5

Profit (loss) before income taxes

48,589( 18,113 )Income taxes-current

16,450

1,845

Income taxes-deferred(1,531)(1,344)

Profit (loss) (after amendment dated March 28, 2014)

Other
Extraordinary losses
Impairment loss
Loss on retirement of non-current assets
Loss on cancellation of leases
Loss on cancellation of rental contracts
Other

33,670(18,614 )Profit (loss) attributable to non-controlling interests(232)(1,697)

Profit (loss) attributable to owners of parent

33,903(16,917 )Note: “Net sales” and “Operating revenue,” which previously had been reported separately, is now presented as “Operating revenue.” “Cost of sales” is now presented
as “Operating costs.” “Gross profit” is not presented.

77 MUJI REPORT 2021

Consolidated Cash Flow Statements(Million JPY)
Fiscal year ended
August 31, 2021 (September
1, 2020 to August 31, 2021)

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of software and others
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses for directors(and other officers)
Increase (decrease) in provision for retirement benefits for directors(and other officers)
Increase (decrease) in provision for sales returns
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sales of investment securities
Share of loss (profit) of entities accounted for using equity method
Loss on retirement of non-current assets
Impairment loss
Loss (gain) on step acquisitions
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in other assets
Increase (decrease) in other liabilities
Subscription rights to shares
Reversal of share acquisition rights
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of leasehold rights, lease deposits and others
Collection of lease deposits and others
Purchase of intangible assets
Proceeds from sales of investment securities
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Payments of long-term loans receivable
Proceeds from sale of investment property
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of lease obligations
Proceeds from share issuance to non-controlling shareholders
Proceeds from sales of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents
Net increase (decrease) in cash and cash equivalents due to the change in the fiscal year
Cash and cash equivalents

Fiscal year ended
August 31, 2020 (March
1, 2020 to August 31, 2020)

48,58915,561
3,714
847
(35)

(18,113)

62

(37)

27
0
(361)
1,395
(912)
(118)
(7)
278
1,168
(260)
1,345
(4,357)
4,541(1,034)(1,876)
353
(677)
(323)
67,920349(1,408)(5,414)61,447

6
0
(197)
710
(81)
—
(8)
1,169
14,265—(225)(1,497)(8,139)
(235)
2,963
177
—
(57)
1,658
278
(668)
(3,026)(1,758)(3)
20(8,487)(1,584)831(8,852)
218

—
4,177
(4,991)(781)
591(3,261)
—

414

—
—
—
26
(4,239)

(669)
3,104
1,468
(13,538)(342)—(8,289)199—(6,589)(140)(15,162)2,246
34,99391,5998,426
135,019

8,655
1,854
411
37

485
71,466(3,511)69
9(4,796)—
63,722(151)
57,57334,025—91,599

MUJI REPORT 2021

78

Basic Information

Stockholder Information (As of August 31, 2021)

Corporate Information (As of August 31, 2021)

Stock Overview

Company Name
Address

Ryohin Keikaku Co., Ltd.
4-26-3 Higashi-Ikebukuro, Toshima-ku, Tokyo, 170-8424

Establishment
Capital
Number of Employees

June 1989 (registration: May 1979)
JPY 6,766,250,000
18,163 (including 9,281 temporary workers and others; Ryohin Keikaku Group)

Distribution of Shareholders

Total number of authorized shares:
1,123,120,000
Total number of issued shares:
280,780,000
Number of shareholders:
70,401
Stock exchange listing:Tokyo Stock Exchange
Accounts settlement date:August 31
Ordinary General Meeting of Shareholders:
Held in November each year
Administrator of the shareholder register:
Sumitomo Mitusi Trust Bank, Limited

Financial institutions: 100,817,200
Securities companies: 17,358,238
Other corporations in Japan: 22,559,988

280,780,000

Corporations and individuals outside Japan: 100,259,177
Individuals and others: 33,864,657
Treasury stock: 5,920,740

For more information, please refer to the Ryohin Keikaku website.

Major Shareholders
Shares Held(Thousands)

Major Shareholders

Shareholding
Ratio (%)

The Master Trust Bank of Japan, Ltd. (Trust account)

27,095

9.85

Custody Bank of Japan, Ltd. (Trust Account)

24,004

8.73

Custody Bank of Japan, Ltd. (Trust Account E)

11,231

4.08

Mitsubishi Corporation

10,783

3.92

SMBC Nikko Securities Inc.

7,201

2.62

Credit Saison Co., Ltd.

6,318

2.29

Custody Bank of Japan, Ltd. (Trust Account 9)

6,224

2.26

THE BANK OF NEW YORK MELLON AS DEPOSITARY BANK FOR DR HOLDERS

5,081

1.84

STATE STREET BANK WEST CLIENT-TREATY 505234

3,880

1.41

Japan Securities Finance Co., Ltd.

3,808

1.38

WebsiteIR Information

Sustainability Information

https://ryohin-keikaku.jp/eng/

https://ryohin-keikaku.jp/eng/ir/

https://ryohin-keikaku.jp/eng/sustainability/

External Evaluations

In June 2021, Ryohin Keikaku was selected for the first time for inclusion as a constituent of the FTSE4Good Index

Notes:
1.	The Company holds 5,920,740 shares of treasury stock, but these shares are excluded from the list of major shareholders above. The 5,920,740 shares of treasury
stock do not include 600,000 shares of Ryohin Keikaku’s stock held by Sumitomo Mitsui Trust Bank, Limited for stock incentive compensation for the executives ofoverseas Group companies and 11,231,200 shares held by Mizuho Trust & Banking Co., Ltd. for the stock benefit trust (J-ESOP).
2. The 11,231,200 shares held by the Custody Bank of Japan, Ltd. (Trust Account E) are for the purpose of the stock benefit trust (J-ESOP).
3. The shareholding ratio is calculated after deducting the 5,920,740 shares of treasury stock.

Series and the FTSE Blossom Japan Index, which are leading ESG investment indexes.
The FTSE4Good Index Series comprises companies selected by FTSE Russell of the U.K. For inclusion in theindex, companies must demonstrate strong performance and meet various evaluation criteria in terms of ESG
practices. These criteria are made based on international standards including the United Nations Sustainable
Development Goals (SDGs). The FTSE Blossom Japan Index is a specialized ESG index focused on companies
listed in Japan.
These indices have become benchmarks for investors who place importance on corporate social responsibility
and sustainability. Japan’s Government Pension Investment Fund (GPIF), the world’s largest public pension fund,

Dividend Payout Ratio

has also adopted the FTSE Blossom Japan Index as a benchmark for its ESG investment management.
2015/2

Consolidated dividend
payout ratio

2016/2

30.3%

2017/2

30.1%

30.1%

2018/2

30.1%

2019/2

2020/230.0%

2020/841.1%

2021/8—31.8%

Recognition from Society

Ryohin Keikaku Ranks Second Overall and First in the Retail Distribution
Category of the Japan Sustainable Brands Index
Ryohin Keikaku ranked second overall and first in the retail distribution category in the results of the Japan
Sustainable Brands Index, a corporate brand survey conducted by Sustainable Brands Japan in response to the
SDGs. The results were announced at the International Conference on Sustainable Brands 2021 in Yokohama,Stock Price and Volume(JPY)

Stock price (Left scale)

5,000

event organized by Hakuten Corporation. The aim of the survey is to review corporate sustainability efforts from a(Thousand shares)

Volume (Right scale)

250,000

consumer perspective and to examine how consumers’ perceptions of companies influence their consumption andrecommendation patterns.
Ryohin Keikaku will continue to contribute to the communities where it operates and remain useful to its

4,000

200,000

3,000

150,000

customers.

Excellence Award at the 69th Nikkei Advertising Awards
The Nikkei Advertising Awards, sponsored by The Nikkei, started in 1952 and is one ofJapan’s leading advertising awards. At the 69th Nikkei Advertising Awards for 2020,

2,000

100,000

1,000

50,0000

2011/2

2012/2

2013/2

2014/2

2015/2

2016/2

2017/2

2018/2

2019/2

2020/2

2020/82021/8

Ryohin Keikaku’s corporate advertisement “Like water and air” won the ExcellenceAward in the Distribution and Service category.

0

Note: The Company conducted a 10-for-1 share split of its common shares on September 1, 2019. The stock price and trading volume are calculated assumingthat the share split was conducted at the beginning of the fiscal year ended February 2011.

79 MUJI REPORT 2021

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80

Basic Information

Global Network (As of August 31, 2021)
Number of MUJI Stores (As of August 31, 2021)
StoresEurope39 MUJI stores
MUJI EUROPE HOLDINGS LIMITEDRYOHIN KEIKAKU EUROPE LTD.
RYOHIN KEIKAKU FRANCE S.A.S.
MUJI ITALIA S.p.A.
MUJI Deutschland GmbH
MUJI SPAIN, S.L.
MUJI PORTUGAL, LDA
MUJI Sweden Aktiebolag
MUJI Switzerland AG
MUJI Finland Oy
MUJI Denmark ApS

East Asia

North America

412 MUJI stores

19 MUJI stores

MUJI (HONG KONG) CO., LTD.
MUJI Korea Co., Ltd.
MUJI (Shanghai) Company Limited
MUJI (Taiwan) Company Limited

MUJI U.S.A. Limited
MUJI CANADA LIMITEDMGS (Shanghai) Trading Co., Ltd.

299

30

(5)

25

20

–

(1)

(1)

Taiwan

54

3

(1)

2

South Korea

39

–

(1)

(1)

East Asia (Total)

412

33

(8)

25

U.K.

7

–

(3)

(3)

France

7

1

(1)

–

Italy

6

–

(1)

(1)

Germany

8

–

–

–

Spain

4

–

–

–

1

–

–

–

LS

1

1

–

–

–

Sweden1–––

Switzerland

1

–

–

–

Finland

1

–

–

–

1

1

–

1

1

–

–

–

U.S.A.

10

–

–

–

Canada9–––

Europe and North America (Total)

58

2

(5)

(3)

Singapore

10

–

–

–

Malaysia

9

–

–

–

Thailand

22

2

–

2

India

3

–

(1)

(1)

Denmark
PolandRyohin Keikaku Co., Ltd.
MUJI HOUSE Co., Ltd.

LS1Australia

5

–

–

–

Indonesia

LS3

–

–

(6)

(6)

Philippines

LS2

5

–

–

–

2

2

–

2

VietnamSoutheast Asia
71 MUJI stores

MUJI (SINGAPORE) PRIVATE LTD.
MUJI (MALAYSIA) SDN. BHD.
MUJI Retail (Thailand) Co., Ltd.
Ryohin-Keikaku Reliance India Private Limited
MUJI RETAIL (VIETNAM) LIMITED LIABILITY COMPANY
MUJI PHILIPPINES CORP.
MUJI GLOBAL SOURCING VIETNAM COMPANY LIMITEDMUJI Global Sourcing Private Limited

Oceania

5 MUJI stores

MUJI RETAIL (AUSTRALIA) PTY LTD

Net increase(decrease)

Hong Kong

Ireland456 MUJI stores

ClosedMainland China

Portugal

Japan

Open

Kuwait

LS3

3

–

–

–

UAE

LS3

7

–

–

–

Saudi Arabia

LS

3

5

1

(1)

–

Bahrain

LS3

2

–

–

–

LS

3

2

–

–

–

LS

3

1

–

–

–

Southeast Asia and Oceania (Total)

76

5

(8)

(3)

Overseas (Total)

546

40

(21)

19

Directly Managed (Total)

380

21

(4)

17

LS (Total)

76

4

(2)

2

Seiyu

–

–

(1)

(1)

456

25

(7)

18

1,002

65

(28)

37

Qatar
Oman

Japan
Domestic and Overseas (Total)

LS1 = Stores wholesaled by MUJI EUROPE HOLDINGS LIMITEDLS2 = Affiliated company accounted for by the equity method
LS3 = Stores wholesaled by Ryohin Keikaku Co., Ltd.
No mark = Stores directly managed by subsidiaries

81 MUJI REPORT 2021

MUJI REPORT 2021

82