Ryohin Keikaku’s
Business Strategies
Ryohin Keikaku’s business strategies are inextricably linked toits ESG strategies.
As a group that contributes globally to creating “a truthfuland sustainable life for all,” Ryohin Keikaku develops its products,
services and business based on four material issues.

Our Four Material Issues
1. B uild a Sustainable and Circular Society That Coexists
with Nature
Ryohin Keikaku’s Unique Product Development

Pages 39–40

ApparelPage 41

Household Goods

Page 42

Food

Page 43

Overseas Product Development

Page 44

Supply Chain Management

Pages 45–46

Raw Material Procurement

Page 47

Recovery and Recycling Initiatives

Page 48

Caring for the Environment

Page 49

Climate Change

Page 50

2. Address Local Challenges and Revitalize Regions
Store Strategy

Pages 51–52

Interview with a General Manager

Pages 53–54

Sustainable Community Design

Pages 55–56

3. Practice Business Activities in Which Each andEvery Diverse Individual Plays a Leading Role
Human Resource Development

Pages 57–58

Initiatives for Diversity & Inclusion

Pages 59–60

4. Realize Governance Aligned with Public Interest
and People-Centered Management
Working toward “Public Interest andPeople-Centered Management”

37 MUJI REPORT 2023

Pages 61–62

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Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

Ryohin Keikaku’s Unique Product Development
Product Planning• Development of apparel, household goods andfood, and services essential to daily life
• All items are original products that minimize waste
by incorporating the three perspectives of selectionof materials, streamlining of processes and simplificationof packaging• Product planning from the consumer’s point of view
• Product development that makes the most of theessential qualities of natural materials• System for reflecting customer feedback in products(IDEA PARK) https://idea.muji.net/ (Japanese only)

Recycling and Effective Useof Resources• Proactive use of recycled materials• Recycling of resources as raw materials for new products• Shifting to products made from recycled materials
to reduce use of virgin plastics• Upcycling such as re-dying, reconditioning and reselling
clothing under the ReMUJI brand• Recycling non-reusable clothing as a raw material
for new products• Providing monthly furniture rental service• Sale of used items at the Mottainai Market, etc.

Raw Material Procurement• Production area and material development that leadto resolving local social issues• Selection of raw materials harvested and cultivatedin ways that do not harm the Earth, living things or
producers• Proactive use of recycled materials• Use of primary raw materials traceable to the source
as much as possible• Visits to check on raw material production areas

Recovery of Resources• Collecting various unwanted products from customers
at stores as resources
Main products collected for reuse as raw materials:• Polypropylene products (file boxes, etc.)• Polyethylene products (soft cases, etc.)• PET bottles (toning water bottles, etc.)• Paper hangers and hooks• Apparel and textile products

Production• Ensuring production quality based on our own“Ryohin Standards”• Cooperation with production partners who share
our philosophy• Cooperative system with factories to appropriately
manage a wide variety of products

Feedback from Communities,
Society and Customers• Global environmental issues such as resource
depletion and climate change• Response to region-specific issues• Response to earthquakes and other disasters• Addressing issues such as Japan’s declining birthrate,
aging population and uneven population
distribution• Collaboration with national and regional governments• Lifestyle Organizing School program
https://www.ryohin-keikaku.jp/eng/sustainability/
co-worker/education/• Customer Service Center

Distribution• More efficient distribution by establishing centers inmajor production areas with functions that enableconsolidated transport of products purchased frommultiple countries/factories• Highly efficient distribution warehouse operations
based on the operation of distribution centers in Japanand overseas according to product characteristics• Expanded warehouses as bases for product recycling
and upcycling of items collected• Contribution to reducing environmental impact andsocial costs through joint delivery with partner companies

Sales/Services• Stores are community centers that have a positive
local impact• Approximately 1,200 stores in Japan and overseas
linked with our online store for in-store pickup of orders• Lineup of basic items essential for daily life including
apparel, household goods, and food, as well ascomprehensive lifestyle proposals• Sale by weight, water refill service, etc.
• Renovation and other space design services• MUJI SUPPORT (consultation counter for lifestyle
management)• 78.53 million downloads of the MUJI passport app• Sales of local specialty products/Shokoku Ryohin program“The More You Use Our Products, the Better the World Will Become” Will Be the Conceptbehind Ryohin Keikaku’s Product Development Going Forward
MUJI products are beneficial to people, and the more they become integrated in the daily lives of people around the world, themore they will reduce the burden on the environment and solve social issues. These are the types of products and services wewant to develop. However, this kind of product development cannot be done by Ryohin Keikaku alone. All of our stakeholders,
including suppliers, customers, local communities, governments and employees, who appreciate MUJI’s approach and productdevelopment philosophy, are free to participate in this process and share their opinions and ideas. This co-creation leads to
products with new value. MUJI intends to be a forum for this kind of open innovation. In addition, when our customers return

39 MUJI REPORT 2023

used MUJI products to the store rather than throwing them away, they are recycled as raw materials for new products. Items thatwere previously incinerated as garbage become resources when brought back to MUJI. We want to work with our stakeholders
to build communities that enable society as a whole to lower its burden on the global environment, reduce consumption of natural
resources, recycle resources and generate innovation. We will conduct planning and development that thoroughly incorporate thisapproach in MUJI’s wide-ranging product lineup of items essential to daily life in the areas of apparel, household goods and food.

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Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

ApparelHousehold Goods

Basic Policy and Strategy

Basic Policy and Strategy

We will return to the fundamentals of manufacturing—selection of materials, streamlining of processes and simplification of packaging—torenew our commitment to developing no-frills, quality products. This will include selecting materials that take the environment and producers
into consideration, minimizing waste in all processes, and providing customers with what they need, in the form they want. Our overall goal
is to offer a lineup of basic products at fair prices, created based on straightforward designs that offer just the right amount of comfort.
Based on the assumption that our products will be used for a long time, we will further strengthen recycling-related initiatives. We want
to give customers the peace of mind of knowing that their clothes may have a second life when it comes time for them to get new ones. As
for materials, our policy is to mainly use natural materials, and to switch from fossil-derived fibers to renewable materials.

In the household goods business, we will review all existing products and redefine what MUJI should be in the coming era. Our aim is toenrich the lives of our customers through our products. We look to our ideology and philosophy in determining whether our products are
truly useful and necessary in daily life. For product development, our goal is to capture the top mindshare so that when people need aproduct for a specific purpose, they think of MUJI first. As such, it is critical that we enhance products essential to daily life, and effectively
convey the value of those products and the MUJI concept. Consideration for the environment and society is a fundamental prerequisite ofour product design and development. We will update our approach to creating MUJI products based on the establishment of three newconditions: They must be made to last, promote circularity and reduce environmental impact.

Issues to Address• Progress is being made in strengthening our product lineup, but designs are still a mix of basic and trendy• Insufficient supply of products being delivered to/ordered from stores results in stockouts of mainstay products• Ensuring effective use of expanded apparel sales space at larger stores and addressing the issue of uneven productassortment at small and mid-sized stores• Declining number of customers despite an increase in the average amount spent per customer

Issues to Address• Development of products that are MUJI products for a reason, with an eye on the future and lifestyles• Improving ability to communicate product concepts and ease of use• Better communication in reminding consumers that MUJI has the products they need in daily life
• Differentiation based on price competitiveness and product value

Key Initiatives

Key Initiatives

Innovating Product Development System

Refining Mainstay Products

We are enhancing the value of our products by clarifying the functions and roles of designers and merchandising specialists—people who
design the product mix and create product stories—and by shifting to an organizational structure that assigns leaders for each function androle. In addition, we have brought in an experienced professional with a track record of success outside the Company to head our design
operations, and will work to increase the overall sense of unity in apparel and the level of quality of individual items.

We want to position MUJI household goods as a collection of reliable individual products that offer functionality and ease of use. To that end,
we will refine and further improve our mainstay products. In 2023, we carried out a major renewal of our skin care products for the first timesince they were launched. Improvements such as incorporating a rice bran extract compound that uses 100% natural ingredients and isgentle on the skin have raised the profile of our products, and enabled us to attract new customers. We even changed the bottle to one
made of 100% recycled plastic. In addition, we are making product improvements in response to feedback from customers. Examples
include making floor mops lighter, adding larger sizes for frequently used products, and enhancing the basic functions of utensils.

Clarifying and Fulfilling Roles in Each Category
We will clarify roles based on the intended use of products and price range, and ensure that they
fulfill their objective in each category.
For example, in the “core line” category, which includes items such as T-shirts and denim
clothing, we will maximize the potential of natural materials while raising the level of quality of about 60
popular mainstay products. We will improve the whole supply chain to ensure stable inventories
and appropriate prices. We will also develop products after clearly defining categories according
to intended product use and purpose, such as “clean casual,” “work and outdoor” or “sports.”

Expanding a Circular System for Clothing
We will give new value to clothes that are no longer needed by washing, dying and repairing them to promote the further expansion of
ReMUJI,* which promotes turning used clothes into new ones. By making more customers aware of our initiatives, we can increase theamount of clothes collected. In addition, improving the post-collection sorting process will help to boost the reuse rate. We also conduct
product development that utilizes synthetic fiber materials, with a focus on using 100% recycled materials.
* See page 48 for details.

Improving the Apparel Sales Floor Space
By enhancing store fixtures and raising their height, our product selection will better convey the appeal of MUJI apparel and accessories
even in smaller stores. We are also developing new apparel sales floors in 600 tsubo stores without being limited by past practices, using
MUJI Shinjuku Yasukuni Dori, a clothing specialty store, as a model. By making effective use of clothing specialty stores, we will increase
recognition of MUJI’s apparel among consumers.
Product
Showcase

Kapok, a Natural Material That Minimizes Demand on Water Resources

Kapok is a plant fiber made from the seed pods of the kapok tree. A tree that grows naturally in the tropical regionsof Southeast Asia, its strong resistance to pests means that it can be cultivated using almost no pesticides, andrequires almost no watering or fertilizers. Kapok trees can grow to great heights and continue to absorb carbon
dioxide. In addition, it is not necessary to cut down the tree to harvest the seed pods. The fiber collected from thefruit of this tree has long been used as filling for cushions and other items. The fiber has a hollow center, containing
a great deal of air, making it very light. In fact, it is one of the world’s lightest natural fibers.
MUJI has been using kapok since 2021, and has sold a variety of clothing made from this fiber including
shirts, pants, and the padding for outerwear. In the 2023 spring/summer season, we expanded the number of
items we offer to 17 in total. We will further expand series that use this material in the future.

41 MUJI REPORT 2023

Making Environmental Consideration a Fundamental Prerequisite of Product Design
Recognizing that the manufacturing retailer model has an adverse impact on the natural environment, we willfurther strengthen product development by making consideration for the environment a fundamental prerequisite.
1. Made to last: Break-resistant designs, repairability, and looks that won’t soon go out of style
2. Promote circularity: Selection of materials that can be recycled, use of innovative methods to eliminate
waste, and creation of a system that covers collection to recycling
3. Reduce environmental impact: Selection of materials that take the environment into consideration andare easy to transport/handle
We are approaching new product development with the above policies as a main focus. In addition,
we are further enhancing the system and implementation framework for our recycling initiatives with thegoal of collecting all the plastic products we sell.

Expanding Offerings of Frequently Used Products
As one way to enhance convenience for customers, we will expand and improve products that are essential to daily life and require
restocking or replacing in a timely manner. Specifically, we will expand our offerings of daily necessities and consumables, such as cleaning
supplies, kitchen utensils, towels and slippers, and make improvements in ways that reflect customer feedback. We will narrow down ourrange of large products and durable goods to basic items, and will expand our lineup of sofas, storage units and lightweight furniture(products that are a familiar part of daily life), making them convenient, compact, easy to use, and compatible to any lifestyle.
Product
Showcase

A Mattress Redesigned to Ensure Long-term Use

MUJI’s bed mattress, a long-selling hit product, was given a full redesign in 2023. In addition to promoting
a good night’s sleep, we thought about how to make the mattress last a long time, and about disposal
when the time comes to replace it. The coils and cushioning material inside the mattress were redesigned
to be separable, allowing for long-term continued use of the mattress, even while making partial repairs.
Mattress with Legs, which was launched in 1991, was also redesigned so that the stainless steel
frame, coil unit, and side fabric can be detached, making partial repairs possible. This helps to minimize
waste. Packing the coil unit in a compression roll and changing the steel frame made it easier to assemble
and reduced the logistics burden. It is also possible to carry the mattress through narrow entrances andstairways. Going forward, we will continue to improve existing products and develop new products andservices from the perspectives of consideration for the environment and the benefits they offer consumers.
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Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

Food

Overseas Product Development

Basic Policy and Strategy

Ryohin Keikaku has a global production system in place, and carries out product development tailored to the needs of each country andregion. We are bolstering product development in mainland China and Southeast Asia, and while there may be differences in lifestyles,
regulations and demand, we will provide products and services that address social issues in those regions.

We will harness the potential of food to develop products and services that solve social issues, achieve the top mindshare, and bring people
together and connect them. Our goal is to increase food sales to 30% of total sales in 2030. To achieve that, we will not just increase producttypes. We will also create product lineups in each category that embody MUJI’s unique style and concept. We will also form internal andexternal teams to optimize the value chain up to the raw material procurement stage, and work with other departments to realize circular
design. In many regions, agriculture is the main industry, and the food business will play a major part in our localization efforts in such regions.
Food will also play a leading role in connecting MUJI with customers by utilizing local ingredients and creating communication spaces.

Issues to Address• Delayed development of new mainstay products that can join the ranks of existing products such as curry and baumkuchen• Adapting sales floors so that they convey elements linked to product appeal, including freshness, temperature and aroma• Ability to offer products and services in line with social changes and issues, as well as local lifestyles• Ability to create food products that contribute to local communities

Key Initiatives
Enhancing Mainstay Products
We will make improvements to current mainstay products by incorporating aspects of local foodcultures and customer feedback, and develop new mainstay products. We are evolving our retortpouch curry into a series that fits perfectly into daily life, including by expanding varieties, reviewing
the manufacturing process to reduce costs, and developing microwavable products. In response tocomments that our baumkuchen was too large and high in calories, we have launched a smaller size
to attract new customers. The new pasta series we launched in fall 2023 is being promoted as a new
mainstay product that lets people enjoy the authentic flavors of the world’s great cuisines at home.
We will continue to develop this series by adding items such as fresh pasta noodles and sauces.

Expanding Seasonal and Theme-Based Products
We will make it more enjoyable for customers to come to our stores by expanding seasonal and theme-based products. Health and gifts are
the two themes we are focusing on. For health, we are pivoting to the idea of health maintenance. We are developing products that featureseasonal ingredients and are designed to keep the body warm, products that facilitate the preparation of nutritious meals, and confectioneries
that use nutritious ingredients. For the theme of gifts, we will create more opportunities for people to connect with each other through food.

Making Sales Floor Improvements and Creating Communication Spaces
Making improvements to store fixtures and shelf layouts will lead to more lively sales floors that will make customers want to select foodproducts. In addition, we will take advantage of our in-store and dining out services to create lively communication spaces where people
can gather to experience our products and services. The style of service offered will be tailored to the size and needs of each store, ranging
from unstaffed coffee stands to staffed ice cream stands, as well as cafés and diners. We will provide places for communication among thevarious people who engage with MUJI through food. At each store, the menus and food offerings will be developed to make the most of theconnections with farmers and businesses in the area.

Implementing Initiatives That Consider the Environment and Producers
As we become more involved in raw material sourcing, we will strengthen partnerships with farms and companies that show consideration
for the environment and producers. Coffee is a good example. We source excellent beans that are small yet flavorful from a plantation in
Brazil that is active in tree planting and watershed preservation. Representatives from Ryohin Keikaku went to the plantation and checked
not only the product quality, but also factors such as working conditions. We will maintain our commitment to checking the actual producton-site and considering producers in our product development.

Highlight

Expanding Local Production for Local Consumption to Support Community Revitalization:
Café&Meal MUJI Minnaminosato (Kamogawa, Chiba Prefecture)

Based on the concept “Satoyama vegetables are sweet,” Café&Meal MUJI Minnaminosato reopened in spring
2023 as a café that can be used as a place for both working and relaxing. It features a revamped menu thatmakes liberal use of local ingredients and brings out their full flavor. The café has also started the “Kamogawa
Citizens Discount” program, which makes the entire menu available to local residents at special prices so thatthey can enjoy the pleasures of locally grown produce. At the adjacent farmers’ market, freshly harvested fruits
and vegetables grown by more than 200 producers are lined up, with around 60 different items typically for saleon any given day. We will continue working toward community revitalization through the Café&Meal businessunder the mantra of “local production for local consumption.”

43 MUJI REPORT 2023

Mainland China

Fleece Series Made of 100% Recycled Material
At Ryohin Keikaku, we are committed to product development that emphasizes recycling
throughout the Group. In mainland China, we developed and launched the Recycled Fleece
Series, in which all materials—fabric, buttons and fasteners—use 100% recycled raw materials
that are global recycled standard (GRS)* certified.
The materials, including the fabric and sewing thread, are made by converting collecteddiscarded plastic bottles into pellets, and spinning them into fiber. Even the fasteners andsmall parts are made from recycled materials, and when the product is sold, it is given to theconsumer in simple, plastic-free packaging to make maximum use of finite resources. We willcontinue to look for ways to recycle and circulate the Earth’s resources and to reduce waste.
* An international, voluntary standard established with the goal of increasing use of recycled materials.

Southeast Asia

Effectively Utilizing Resources to Develop Rubberwood Products
The sap and natural rubber of the rubber tree are used as raw materials. This tree is commonly found in tropical regions. The woodof the rubber tree (rubberwood) was not typically considered suitable for use as a wood for furniture, such as tables, beds andbookshelves, due to its thin structure. Therefore, after sap could no longer be collected from the tree, the wood was mainly used forfuel and other simple applications, and was not given another significant purpose. In recent years, the technology for drying woodhas improved, making it easier to process rubberwood into laminate. As a result, the value of rubberwood
as lumber has increased.
In Vietnam, a timber legality verification system was introduced in 2016, which made it illegal toharvest natural trees without authorization. Because of that, planting and the use of rubberwood, acacia
and other trees is being encouraged. The range of rubberwood products, which benefit society in termsof effective use of resources and environmental preservation, is now being expanded to include small
wooden accessories as well as furniture.
In Southeast Asia, since FY2023/8 Ryohin Keikaku has been stepping up development of wooden
furniture products that use rubberwood, including beds, chests and racks. The wood we use is takenfrom trees around 30 years old that have stopped producing latex at natural rubber plantations in
Vietnam. This is one way we help to make effective use of resources.

Southeast Asia

A Product That Emerged from Local Life: Baskets Made from Packing Bands
After the Vietnam War, when Vietnam was still quite poor, people in the south of the country who were looking for ways to supplement theirincome would collect the polypropylene bands used in the packaging of goods sent from overseas. The bands were typically discarded inlarge quantities. They would then weave these bands into wicker basket bags and sell them. Even today, such bags are widely used in daily
life for shopping, carrying farm tools, and other purposes because they are durable and water-resistant, and can be washed off if they get dirty.
Learning from techniques used in Vietnam, the Polypropylene Packing Band Hand-Woven Basket sold by MUJI is hand-woven
using the packing bands used for bundling packages. We further took the environment into consideration by adopting polypropylene
handles made from partially recycled raw materials, and by making individual parts(including the handles from a single material) easy to recycle after the bag is no longer
needed. Now sold in Southeast Asia and in Japan, the bags have received a positive
response from customers in Japan, who appreciate them for their stylish appearance,
their versatility due to light weight, and the fact that they do become misshapen.
We will continue to develop products and services that have been inspired by the
lives of people and wisdom gleaned from various countries around the world.
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Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

Supply Chain Management
Ryohin Keikaku outsources manufacturing and production for all of the products it handles to production partners. The cooperation ofbusiness partners is also vital in the transportation and management of products. Therefore, we ensure ethical and transparent supply chain
management, consistent with Ryohin Keikaku’s core value of “contributing to society and people.” Going forward, we will strengthen
cooperation with partners and further develop and evolve our global production system into one that contributes to maximizing sales andprofit as a Group. In addition, we will attempt new approaches to manufacturing, and further increase our product development andproduction capabilities as a manufacturing retailer committed to creating a circular society.

Strengthening the Production System
Progress of the Medium-term Business Plan
Ryohin Keikaku has been taking steps to strengthen its production system as it seeks “to complete the finest and most unrivaled
product lines essential to daily life and the procurement and production system for these products.” As one of the first steps, we havesystematized business processes and restructured our product development system, and are now undertaking work in-house that waspreviously outsourced to trading companies. In addition, we have expanded the production bases that support our production network
globally, and are currently adding human resources to optimize their operating efficiency. We are also strengthening our global productdevelopment and collaboration framework, and recently held our first joint product development conference across different regions. From an
ESG perspective, we developed a new program to enable plastic recycling, and reinforced the risk management system in areas including
traceability, human rights and environmental due diligence, and overseas product compliance.

Issues to Address• Expansion and upgrading of production bases, and improvement of conditions in terms of human resources andoperational efficiency to support that effort• Improvement of product development schedules and product development from a global perspective• Minimizing costs in the overall supply chain• Structural improvements in the areas of raw material purchasing and risk management

Future Direction and Key Initiatives
We will evolve toward a global product development system in 2030 to maximize sales and profit. In addition, we want to be “a front runnerof ESG management,” and will grow sustainably and establish a production system that takes society and the environment into account.
Key initiatives to accomplish these goals are as follows.

1) Further minimization of costs
We will reorganize in-house production operations and work to centralize management, as well as promote further in-house adoption ofvarious functions. By visualizing production capacity and promoting production leveling as well as carefully managing development andschedules, we can eliminate waste and reduce costs. We will become more involved in the processes of raw material procurement
and purchasing, and review our cost structure and various standards.

2) Achieve sustainable growth
We plan to create a product development system tailored to the needs of each region, and establish a global production system unique
to Ryohin Keikaku through expansion of production bases and the strengthening of partnerships with suppliers. To improve theefficiency of business operations, we will speed up digitalization and strengthen compliance with overseas regulations and systems.

3) Become a front runner of ESG management
We have launched a project to lessen our impact on the environment. Efforts include working to reduce greenhouse gas emissions
in the supply chain, promoting the appropriate use of water resources, managing waste and chemical substances, and further
expanding the use of materials that take the environment into consideration. In addition, we will increase supply chain transparency,
establish a global audit system that includes raw material procurement, and enhance information disclosure. Furthermore, to realize
a circular society, we will develop products with the entire product life cycle in mind, including post-use. We will also expand initiatives
related to repair, reuse and recycling.

Respecting Human Rights
Ryohin Keikaku understands that the entire supply chain for its business activities can have a direct or indirect negative impact on humanrights, and recognizes the importance of its responsibility to respect human rights. Based on this awareness, Ryohin Keikaku supports andcomplies with the United Nations Guiding Principles on Business and Human Rights and other international standards for respecting humanrights, and strives to fulfill its responsibility in that regard. We participate in external initiatives related to human rights risks. In 2016, we joined
the Better Work Programme, a partnership program under the auspices of the International Labour Organization (ILO) and the International
Finance Corporation (IFC), a member of the World Bank Group.

45 MUJI REPORT 2023

Procurement Based on Code of Conduct for Production Partners
Based on its Code of Conduct for Production Partners, Ryohin Keikaku shares with its partners (including production partner factories) its
policies on the work environment, respecting human rights, and consideration for the environment in the supply chain as a whole, and asks
for compliance. We are also taking steps to ensure that human rights are respected. This code of conduct is distributed (available in Japanese,
English and Chinese) to all the production partners who handle our production worldwide. We request all partners to whom we outsource
production to sign a pledge to comply with the code of conduct, and contract only with those who do so.
Ryohin Keikaku Code of Conduct for Production Partners ▶https://www.ryohin-keikaku.jp/eng/sustainability/supply-chain/code-of-conduct/

Human Rights Policy
Ryohin Keikaku recognizes that in order to achieve its corporate
purpose—a truthful and sustainable life for all—it is crucial that thehuman rights of all people are protected and respected. We havebeen implementing human rights initiatives based on our Group
Compliance Code of Conduct and our Code of Conduct for Production
Partners. In December 2022, we formulated the Ryohin Keikaku
Human Rights Policy with the commitment of senior management
and the approval of the Board of Directors.
Ryohin Keikaku Human Rights Policy ▶https://www.ryohin-keikaku.jp/eng/sustainability/
supply-chain/humanrights/

Assessment of Respect for Human Rights

Internal Framework for Respecting Human Rights
Responsible Division/Committee

Main Themes

Compliance and Risk
Management Committee

Human rights in general (audits of Group
Compliance Code of Conduct, Code of
Conduct for Production Partners, etc.)

Occupational Safety & HealthCommittee

Occupational safety and health

Human Resources Division andRisk Management Division

Elimination of employee discriminationand harassment; ensuring fair wages andreasonable working hours; providing
contact point for reporting, whistleblowing
or consultation by employees; etc.

IT Services Division andRisk Management Division

Privacy (including personal information)

Production Division, Risk
Management Division andCorporate Planning Division

Human rights in the supply chain

Ryohin Keikaku is conducting a full-scale review of the human rights due diligence process in the supply chain. With the help of an externalorganization, we are taking a fresh approach to how we assess human rights risks in our supply chain, formulating and implementing anaction plan to prevent or mitigate risks, monitoring risk-related items, and conducting in-house training on human rights. We also plan tofurther strengthen human rights-related disclosure.
In addition, as part of efforts to promote our human rights policy, we will collaborate with external organizations to improve working
environments, reinforce the internal auditing system, and encourage and support business partners in their own audits.
▶See page 72 for details.

Monitoring of Production Partner Factories
Main Assessment Items
Ryohin Keikaku utilizes a third-party organization to conduct regularon-site audits of its production partner factories based on the Code of
Conduct for Production Partners. The audits cover 13 categories forevaluation, including human rights infringement, working environments
and environmental conservation. A detailed checklist has been establishedfor each category, covering 199 items in total. We also share the resultsof the audits with production partner factories and work together withthem to make improvements in the case of any non-compliant items.

Category
Child labor
Forced labor
Employment contracts
Health and safety
Freedom of association
Discrimination
Disciplinary actions
Working hours
Wages and compensation
Environment
Monitoring of compliance
EthicsProcurement management

Checklist Items
Is there an effective procedure for confirming
the age of employees when they are hired towork in the factory?
Are any employees subjected to illegal
withholding of wages, or required to pay
training expenses, employment agency fees,
tool expenses, uniform costs, or other nonmonetary payments with similar monetary value?
Are employees able to take time off when they
are ill or pregnant if they submit a doctor’scertificate or note?
Is there any evidence of forced, penal, bonded,indentured or trafficked labor?

Assessment Results in FY2023/8
In FY2023/8, we conducted on-site audits of a total of 116 factories, comprising 73 Tier 1 factories and 43 Tier 2 factories. The results were as follows.
A assessment at 4 factories; B assessment at 66 factories; C assessment at 21 factories; D assessment at 13 factories; and E
assessment at 12 factories.

Factories with no non-compliant items receive an A assessment. For factories with D and E assessments, we plan to conduct afollow-up audit in FY2024/8.
Non-compliant items of E assessment factories included locked emergency exits, unsatisfactory safety measures due to fire
extinguishers and evacuation routes being blocked by objects, and inadequate management of working hours. We have agreed on
improvement plans for all of these factories and are confirming the completion of improvements.
Results of Monitoring of Production Partner Factories ▶https://www.ryohin-keikaku.jp/sustainability/supply-chain/monitoring/pdf/20240228_monitoring_material_fy2023_eng.pdf

Disclosure of List of Production Partners
We believe that increasing transparency in the entire supply chain is our responsibility to stakeholders. To realize appropriate working
environments, we are increasing transparency and disclosing our list of production partners.
List of Production Partners ▶https://www.ryohin-keikaku.jp/eng/sustainability/supply-chain/partners/

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Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

Raw Material Procurement

Recovery and Recycling Initiatives

Selection of Materials

MUJI CYCLE

To enhance the value of its products, one of its core themes, Ryohin Keikaku will use inspiration gained from the wisdom of people all over
the world to develop materials. We will focus on the impact on the environment, harmony with nature and the creation of industry in the
production areas. We will also continue to pursue the possibilities of new materials by going to the actual locations and learning from people’s
daily lives and the production areas. We select materials that are produced in an ethical way and with consideration of their impact on thenatural environment, animal welfare and society. By procuring more of these types of materials, we can contribute to the creation of a circular,
ecological and sustainable society.

Ryohin Keikaku is seeking to build a sustainable and circular society that coexists withnature. To move closer to achieving a society in which it is easier to circulate precious
natural resources, MUJI collects some of its products that are no longer needed from
customers at its stores, and then reuses or recycles them as reused products or recycled
raw materials. In product development going forward, we will not only work to reduce
our use of resources, but will incorporate circular design principles based on resource
recycling into our products.

Raw material procurement ▶https://www.ryohin-keikaku.jp/eng/sustainability/activities/material/

Six Core Themes and Examples of Materials We Use
We are working on the following six core themes as measures to develop products that apply inspiration gained from the wisdom of people
all over the world and pursue the possibilities of materials.
1) Product development that applies inspiration gained
from the wisdom of people all over the world

2) Industrialization of production areas

Vietnamese Bamboo

Mongolian Cashmere

Bamboo grows very quickly and is available at a low price. It is also durable
and resistant to moisture. Because of these attributes, it is an indispensable
material that is widely used in Vietnam, including in houses, bridges, hats andother accessories, agricultural water wheels, and more. Since a large volume
can be produced in a short period of time, the use of bamboo contributes tothe conservation of forests. MUJI took notice of the sustainability, durability
and beauty of bamboo, as well as handicraft traditions, and is developing
various products made from the material,
including storage items and lightweightfurniture. Taking lessons from life in Vietnam,
we will connect the potential of bamboo
to new product development.

In Mongolia, desertification is a serious problem. When buying raw wool, we
pay a premium to fund environmental countermeasures, and make mediumto long-term purchases of cashmere wool at fixed prices. We believe thiswill reduce excessive fluctuations in cashmere wool prices and support
producers in earning a stable income. Our expenditures for environmental
countermeasures include covering thecost of surveys to determine the status
and causes of desertification in the areas
where we purchase raw wool. There areplans to use funds for planting trees andrepairing wells in the future.

3) Materials and industries developed to address issues in
production areas

4) Utilization of unused resources

Cotton Thread Recycled from Textile Waste

Indonesian Kapok

Making comfortable clothes that fit the contours of the body from a square
sheet of fabric inevitably results in textile scraps that cannot be used up
even if creativity is pushed to the limit. The rate of scraps generated isroughly 15%, the equivalent to one article of clothing for every sevenmade. Instead of disposing of these textile scraps,
MUJI is repurposing them as material for new
products. In addition to cutting costs, this also
reduces waste, which is a major issue in theapparel supply chain. In FY2023/8, the textile
waste generated in manufacturing of MUJI
products was reduced by 66 tons.

Kapok trees require almost no pesticides, fertilizers or watering, and it is notnecessary to cut down the tree to harvest the seed pods. As a result, they cancontinue to absorb large amounts of CO2 as they grow to great heights andlive to be more than 70 years old. Because the fibers of the tree’s seed pods
were considered too short to be used for thread, they have mainly been usedas filling for pillows, stuffed toys and similar items, as well as the padding in life
jackets. In recent years, however, new technology has made it possible to spinyarn from kapok fiber, and it is attracting interest as a lightweight and comfortable
natural fiber that has low environmental impact. On the island of Java in Indonesia,
our supply source for kapok, trees are being
planted about 5 meters apart, and grownin close to natural conditions. In FY2023/8,
the volume of kapok fiber handled by Ryohin
Keikaku reached 168 tons.

Product Collection

Reuse

Recycling

Collected
products

Products
brought in

For more details ▶https://www.muji.com/hk-en/campaign/cycle/

MUJI stores

Recycled raw
materials

Recycled
products
Factory

Reuse Initiatives
ReMUJI

Mottainai Market

ReMUJI was launched in 2015 as
an initiative to promote reuse of
apparel products. Main products
include re-dyed clothes, in which
items that are no longer needed
are re-dyed in indigo or black;
Tsunagaru fuku, which are items that have been remade by connecting
different clothing items together; and Arainaoshita fuku, which arecarefully washed second-hand clothes. In FY2023/8, we increased
the reuse rate by changing the collection and sorting methods,
and more clothes were collected thanks to the cooperation of
more customers. This led to more stores selling ReMUJI products.
Through the ReMUJI program, which gives collected clothes
a second life by slightly modifying them, we reduce waste andcirculate resources while encouraging customers to care about
their clothes and wear them for a long time.

Some things are too good tolet go to waste. That’s the idea
behind Mottainai Market, where
shoppers can find used items
that are still very usable, like-new
and used furniture, and otherproducts at bargain prices. Used items are mainly furniture that wasused as part of MUJI’s monthly rental service, and then resold after
making repairs such as replacement of worn-out parts. Like-new
items are products that were scratched during transport, or thatwere returned unused because of customer preferences.
In addition, we also sell non-standard household goods andapparel that did not clear the guidelines for regular products.
Mottainai Market is available in MUJI’s physical stores as well as
through the online store. It promotes reuse while also offering
furniture and other goods that can be put to use in daily life.

For more details ▶https://www.muji.com/jp/re-muji/ (Japanese only)

For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/

https://www.ryohin-keikaku.jp/eng/sustainability/environment/waste/

waste/

Recycling Initiatives
In July 2020, Ryohin Keikaku started collecting used toning water and moisturizing milk bottles, My Bottle for Water reusable bottles andother bottles for recycling. Besides helping to reduce plastic waste, this initiative has led to reducing the need for new petroleum-based raw
materials through the recycling of collected bottles into polyester raw materials.
In February 2023, we also greatly expanded the range of MUJI plastic products that we accept for collection, further strengthening ourefforts to promote recycling. Stores all over Japan1 began collection of plastic storage items, dust boxes, stools and other items that are nolonger needed. A total of 251 items2 are now eligible for collection (as of August 31, 2023). Of the plastic products collected, those thatmeet standards are resold as used items, and those that do not meet standards are crushed, washed and then returned for use as recycled
raw materials. Currently, we are developing a program to recycle more of these raw materials into MUJI plastic products.

6) Use of materials that transcend product categories

Eligible Items

Volume of Plastic Products Collected

Lyocell

Warm Cotton• Storage items and other household goods made of polypropylene
or polyethylene(kg)
25,000

Lyocell is a fiber made from cellulose extracted from the pulp of the eucalyptus
tree. Ryohin Keikaku procures lyocell produced through an eco-conscious
process that includes using sustainably sourced wood as the raw material,
and recovering and reusing more than 99% of the water and solvents usedin the manufacturing process. Its excellent moisture absorbability makes
the fabric highly breathable, and it feels naturally cool and silky smooth on
the skin, even on sweltering summer days. Because of these qualities, it iscommonly used in bedding, innerwear
and pajamas to keep users comfortablein the heat of summer.

By using a special technique during the raw cotton stage of the process toincrease the number of molecules that bind with sweat and moisture, wecreated the Warm Cotton series of innerwear. This series takes the natural
moisture absorbency and heat generating qualities of cotton to an even higher
level. As the molecular structure has been altered, absorbency and heatgeneration are not diminished even after repeated washing, and these qualities
are a semi-permanent aspect of the product. We are expanding the productcategories that use this material to include
bedding such as box sheets and comforter
covers, as well as socks. We will develop
this series as a way to stay warmer andmore comfortable during the cold season.

• PET bottles, including toning water, moisturizing milk, and booster
essence lotion bottles

15,0005) Use of functional materials

47 MUJI REPORT 2023

• My Bottle for Water reusable bottles
Product Development Using Recycled Raw Materials
MUJI is actively developing products that use recycled raw materials.
We also use some virgin raw materials to maintain safety and ensure quality.

21,88420,00010,000
5,000
0

729

1,130

2021/82022/82023/83

1. Number of stores collecting items: 492 (As of August 31, 2023)
2. Limited to items sold in MUJI stores or the online store as of August 31, 2023
3. T
 he number grew substantially in FY2023/8 because we expanded the rangeof plastic products eligible for collection in February 2023.

MUJI REPORT 2023

48

Material Issue 1. Build a Sustainable and Circular Society That Coexists with Nature

Business Strategies

Caring for the Environment

Climate Change

Calculation and Reduction of Greenhouse Gas Emissions

Ryohin Keikaku recognizes the importance of the Task Force on Climate-related Financial Disclosures (TCFD). We will continue to identify
the impact of climate-related risks and opportunities on our business, formulate and implement strategies and enhance information
disclosure in line with the TCFD framework.

Ryohin Keikaku is aiming for a 50% reduction in the Group’s Scope 1 and 2 emissions by FY2030/8 (compared with FY2021/8). To achieve
this goal, we will analyze carbon tax liabilities in 2030 and the impact from future store expansions. Based on this analysis, we will formulate
and implement a greenhouse gas (GHG) emissions reduction plan. In FY2023/8, we calculated Scope 1, 2 and 3 emissions for the wholeGroup in accordance with the GHG Protocol, a GHG emissions calculation guideline commonly used worldwide. Of the GHG emissions in
FY2021/8, the base year, we obtained third-party verification for Scope 1 and 2 emissions and for Scope 3 category 1 emissions. We arealso working to obtain third-party verification of emissions for FY2023/8.
Steps we have taken to reduce emissions include installing rooftop solar panels at seven stores in Japan, using renewable diesel fuel in the
MUJI SUPPORT home delivery service, utilizing ferries for domestic long-distance transport,
optimizing the number of deliveries to stores, increasing load efficiency by improving
packaging, and expanding cooperation with shipping companies working on decarbonization.
Starting in FY2023/8, we joined the CDP Supply Chain Program, and are cooperating withproduction partners to calculate and reduce GHG emissions in the supply chain.
Looking ahead, we will further refine calculation methods for the GHG emissions of theGroup, and work to reduce those emissions.
For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/climate-change/

MUJI Hakusan Kitayasuda

Ryohin Keikaku has established a basic policy regarding water resources,
and conducted a survey of the water risks in relation to its own operatingbases and major suppliers. For the survey, we used Aqueduct, a tool
provided by the World Resources Institute (WRI) to determine water risks
based on latitude and longitude. In FY2023/8, we also responded to the
CDP* water security questionnaire for the first time, and confirmed theissues we need to address.
In the future, we will continue to enhance our understanding of theactual conditions with a focus on production partner factories in highwater-risk areas and work to make improvements.
For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/water/* CDP is an NGO based in the United Kingdom that runs a global disclosure system.
For more details ▶https://www.cdp.net/en/

Disclosure Based on TCFD Recommendations
Categories

Governance

Water Usage
Water usage(m3)
150,000

143,779

141,141

147,783

147,783

Wastewater

144,429

Strategy• We work to identify factors that could impact our business, and then implement action plans after qualitatively and quantitatively
evaluating the size of the impact based on criteria such as importance to business strategy. We also look at financial impact interms of revenue and costs, and the relevant time frame.

RiskManagement• The Compliance and Risk Management Committee, which oversees Group-wide risks as part of the risk assessment process,assesses probable exposure to risks at least once a year based on their significance and likelihood of occurrence.

Metrics andObjectives• In the medium-term business plan, our goal is to design all products based on an ESG perspective. As a key initiative, we areworking to launch businesses and products that create a positive social impact, with reuse and recycling as the central theme.

Ryohin Keikaku conducted a scenario analysis of the risks and opportunities presented by climate change, based on the premise that
reducing risks and expanding opportunities is essential for sustainably increasing both corporate and social value.
Risks and Opportunities in 2030 under the 1.5°C Scenario

144,429

100,000

Carbon Taxes
50,00002021/82022/82023/8

Scope of aggregation: MUJI stores, Café&Meal MUJI, IDÉE, headquarters,
distribution centers, and campsites in Japan
Note: Some estimates are included

Biodiversity

FossilResource Price
Fluctuations

Under its basic approach to biodiversity, Ryohin Keikaku has set the goal of using sustainably sourced materials for all products that use
palm oil, wood/paper and cotton sold domestically by 2050. In FY2023/8, we conducted a survey of our usage of palm oil, wood/paperand cotton as major materials. For palm oil, we became a member of the Japan Sustainable Palm Oil Network (JaSPON) in December
2023, and are now gathering information and taking steps toward sourcing certified palm oil in the future. We are also working toward ourgoal of using 100% sustainable wood and paper by 2030, and are promoting the use of certified timber (FSC, PEFC and SGEC), and othernon-certified materials such as recycled wood.
For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/biodiversity/

Chemical Management
Initiatives
Ryohin Keikaku is committed to environmentally and socially sustainable product development, and in June 2023 became a member of the
Apparel and Footwear International RSL Management Group (AFIRM), an organization that works to reduce the use and impact of harmful
substances in the global apparel and footwear supply chain. Accordingly, we require internal departments and all production partners tocomply with the MUJI Product Restricted Substances List, which adds our own standards for textile products to the AFIRM Restricted
Substance List (RSL). We will ensure compliance in actual operations by conducting random tests of products based on the standards.
In the future, we will also take steps to create and disclose a list of product-related restricted substances for household goods. Throughour involvement with AFIRM, we will monitor industry trends and the actions of other companies, and make timely updates to the RSL basedon this information.

49 MUJI REPORT 2023

More Stringent
Regulation of
Plastics andMarketFluctuations

Policies and Actions for Transition Risks and Opportunities• Visualize Group-wide emissions and formulate a reduction
roadmap to reduce GHG emissions. In Japan, reduce• We expect carbon tax liabilities to have a large financial impact.
emissions through measures such as introducing renewable• We estimate that our GHG emissions (Scope 1 and 2 total)energy at stores and distribution bases and installing solar
will increase by about 2.7 times through 2030 as our businesspower generation systems for facility use.
grows if we do not implement initiatives to reduce them.
• Visualize GHG emissions throughout the supply chain with aview to reducing Scope 3 GHG emissions.
• We expect a large financial impact from rising energy costs.
• We estimate that our electricity consumption will increase byapproximately 5.3 times through 2030 as our business grows
if we do not take steps to reduce it.
• We expect a medium financial impact from rising plastic raw
material prices.
* Based on our reference scenarios, we assumed that the unit price ofplastic raw materials in 2030 will be 1.3 times the price in FY2021/8,
and that the ratio of recycled materials to total plastic materials we
procure will be 60%.

Initiatives

For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/chemical/

Key Points of Initiatives• The Board of Directors receives reports twice a year from the secretariat of the ESG Management Committee, which meets
monthly. The Board also monitors the status of the committee’s activities, holds discussions and provides guidance.
• In FY2022/8, we introduced a restricted stock compensation system for directors (excluding outside directors).

Scenario Analysis

Sustainable Water Resource Management
Initiatives

For more details ▶https://www.ryohin-keikaku.jp/eng/sustainability/environment/climate-change/• Reduce the use of energy derived from fossil resources bylowering electricity consumption through the conservation ofenergy and introduction of renewable energy.
• Work with suppliers to help them conserve energy and initiate
the use of renewable energy among other means to mitigate
increases in production costs.
• Reduce the use of fossil resource-derived plastics, andreduce the weight of products and packaging materials.
• Transition from fossil resource-derived materials to recycledmaterials and alternative materials.

* Based on our reference scenarios, we assumed a 20% reduction in
products made with plastics derived from fossil resources, and a 60%
ratio of recycled materials to total plastic materials we procure.

• Given the projected increase in demand for sustainableproducts and services, promote the use of environmentally
responsible materials and product development.
• Promote recycling of our own products, and transition fromfossil resource-derived materials to recycled raw materials.
• Structure sustainable systems that include commercializing
secondary distribution in order to promote reuse.

Physical Risks and Opportunities in 2050 under the 4°C Scenario

Policies and Actions for Physical Risks and Opportunities• We expect a large financial impact from decrease in sales of
products made with plastics derived from fossil resources.
• We expect a large financial impact from increased sales of
products made with recycled plastics.

• We expect that 2 main business sites in Japan and 11 overseas• Implement countermeasures for flooding at stores, distribution
will experience damage from flooding or storm surge.
centers, and supplier production sites with high hazard risk.
Damage Caused• In terms of exposure to significant impact, our analysis coveredby Natural• Fulfill our responsibilities and contribute to local communities
sites including stores, distribution centers and supplier production
Disastersby quickly reopening stores in affected areas and deliveringsites in the countries and regions where we operate, based onnecessary supplies.
metrics including revenue, inventory value and procurement volume.
Note: W e referenced several scenarios, including the Stated Policies Scenario (STEPS) and the Sustainable Development Scenario (SDS) from the World Energy
Outlook of the International Energy Agency (IEA); the Intergovernmental Panel on Climate Change, IPCC RCP 8.5; and the Global Ambition policy scenariopresented in the Global Plastics Outlook Policy Scenarios to 2060 presented by the OECD.
We have set financial impact as follows:• Large: ¥10 billion ≤ revenue; ¥1 billion ≤ cost
• Medium: ¥1 billion ≤ revenue < ¥10 billion; ¥100 million ≤ cost < ¥1 billion• Small: revenue < ¥1 billion; cost < ¥100 million
MUJI REPORT 2023

50

Material Issue 2: Address Local Challenges and Revitalize Regions

Business Strategies

Store Strategy

Strengthening Independent Store Management
Ryohin Keikaku is promoting the evolution of MUJI stores throughout Japan as local community centers. To achieve that, it is important forevery store staff member to think about what they can do to be of benefit to the customers right in front of them, and act on it. Putting people

Based on its two missions, Ryohin Keikaku is committed to creating a community-based business model to support the basic aspects ofdaily life throughout Japan. By developing various sales channels to comprehensively support daily life in each region, and by providing
products, services and stores tailored to local needs through independent store management centered on people, we want our stores tobecome community centers that are an essential part of their areas.

at the heart of our business and promoting the autonomous growth of staff will lead to high-quality and independent store management for
local customers. This will be a driving force for sustainable business growth.

Store Opening Strategy and Sales Channel Development

To foster a proactive culture at stores, the monthly store managers’ meeting has evolved from a forum to share information to a place fordiscussion, and we have introduced a Company app through which employees can post things they have noticed in their stores in a timely
manner. With these and other initiatives, we have created a system that enables issues at individual stores to be taken up by the whole
Company and resolved more quickly. To address the substantial workload on stores that receive frequent business guidance from headquarters,
we will continue working to reduce unnecessary instructions.

We will carry out store openings throughout Japan with stores of 600 tsubo (approx. 2,000 m2) next to supermarkets as the standard,aiming for one store per 100,000 people. We will further strengthen development of new sales channels, such as sales in convenience
stores and a home delivery service. We will also promote sales inside healthcare facilities and a vending machine business.

Achievements and Issues
Maintain an Organizational Culture of Acting Proactively and Independently

Progress of the Medium-term Business Plan

Securing and Developing Human Resources

Store openings in FY2023/8 generally proceeded according to plan, with 75 store openings in Japan and 65 outside Japan, primarily inmainland China, Taiwan and Thailand. In FY2024/8, we will continue to open stores where we can be profitable, mainly in residential areas.
We plan to open 75 stores in Japan, and 96 stores outside Japan, mostly in mainland China and in Southeast Asia, a growth region.
Looking further ahead to FY2026/8, we will continue to open stores in mainland China and speed up the pace of openings in Southeast
Asia, aiming for a net increase of 70 stores per year in Japan and mainland China and 50 stores per year in other regions.

We are improving employment conditions by increasing the hourly wages of store staff, aggressively hiring local employees, and enhancing
store employee training programs to support independent store management. However, securing the necessary human resources andupgrading personnel systems to support store expansion, both in Japan and overseas, are ongoing challenges that we need to address,
including in regions where recruiting is difficult for a variety of reasons.

Store Opening Plan and Progress

As one measure to increase sales per square meter at our stores, we will share examples of successful initiatives taken proactively by employees
throughout the entire Company. In FY2023/8, to improve sales per square meter at standard 600 tsubo stores—an urgent issue at Ryohin
Keikaku—we took advantage of the larger sales floor space to enhance displays of comprehensive lifestyle solutions, reorganized product categories
according to the intended use, and revamped sales floor layouts. In addition, we enhanced measures to attract customers using tabloid newspapers,
television and other media; launched specialty stores; and took other steps to strengthen communication about the value of our products.

Number of Stores in Japan and Overseas*

Results for 2022/8

Results for 2023/8

2024/82026/8

1,072

1,188

1,331

1,750

* Excluding overseas licensed stores, Café&Meal MUJI and IDÉE

Partnership with Lawson
In May 2022, we teamed up with Lawson, Inc. to begin sales of MUJI products at Lawson convenience stores. As of August 31, 2023, MUJI
products are available at approximately 12,600 Lawson stores in all 47 prefectures of Japan. About 200 MUJI items for daily life are offeredon dedicated shelves, including toning water, stationery items, clothing, retort pouch curry and confectioneries. By making MUJI products
available at Lawson stores, which are committed to “Creating Happiness and Harmony in Our Communities,” we are bringing lifestyleessentials to every corner of Japan.

Collaboration with Co-op Home Delivery Services
We have been expanding collaboration with consumers’ co-operatives (co-ops), starting with CO-OP Sapporo in March 2022. We began
supplying our products to Tokai CO-OP in October 2023, and to COOP Tohoku in November 2023. MUJI products can now be purchased
through the home delivery services of the three co-ops in the Tokai region in central Japan that are supplied by Tokai CO-OP, and the eight
co-ops in the Tohoku region that are supplied by COOP Tohoku. Through this collaboration, we are able to provide daily necessities tocustomers who live in hilly and mountainous areas of these regions, which in turn will help to improve the infrastructure essential for daily life
there. We will continue to collaborate with co-op home delivery services, and plan to establish a nationwide network in the near future.

Supply of Products to Supermarkets
Sales of MUJI products in supermarkets began with sales at Okinawa-based supermarket chain SAN-A in 2021 (8 stores as of August 2023).
In addition, in September 2023, we began supplying products to Albis Co., Ltd., which operates supermarkets in three prefectures in the
Hokuriku region and two prefectures in the Tokai region. MUJI products are sold at five Albis stores as of September 30, 2023.

Special Feature

New Retail Business Format: MUJI 500
Ryohin Keikaku is developing a new business model based on the floor space of stores. The newformat, called MUJI 500, was rolled out in September 2022. We are opening MUJI 500 stores inlocations that are easily accessible in daily life—inside train stations, underground shopping
centers at train stations and downtown areas—taking advantage of the compact sales floor
space compared with typical MUJI stores. There are 30 MUJI 500 stores as of August 31, 2023.
Offering mainly daily necessities and consumer goods priced at 500 yen or less, thesestores sell everyday products such as detergents and cleaning supplies, kitchen consumables, hygiene products, stationery items,
batteries, skin care products, underwear and socks, food products such as soup and curry, and cookies and other confectioneries.
By focusing on daily necessities, these stores make it easy to rediscover appealing products that tend to get lost among the othermerchandise in larger stores—one reason they have received a positive response from customers. We will continue to enhance ourlineup of daily necessities, and evolve our approach to product development and sales.

51 MUJI REPORT 2023

Improvement of Sales per Square Meter

Solidifying Store Foundations
To make the customer experience at MUJI stores even better, we expanded introduction of self-checkout registers, and enhanced the customer
consultation service. We also worked to solidify the foundation of store operations with measures such as refining daily operating procedures,
implementing a system for individual store sales and inventory planning, and renewing computers and communication devices. On the other hand,community center model stores are facing challenges in balancing commercial viability and social impact, and improving the profit structure is necessary.

Key Initiatives
Promotion of Independent Store Management
After ensuring that it covers all the basics of customer satisfaction as a retail business, each store will be operated based on the idea of taking
the perspective of local customers. We aim to create the conditions for independent store management by using business plans put together
by store staff on their own initiative. By standardizing basic tasks across divisional boundaries, we can support store employees in planningand promoting independent store management. We will also strengthen the framework for discussing the direction of the Company, including
product development and business process improvement, based on feedback from stores.

Strengthening 600 tsubo Stores
We will place priority on improving the profitability of 600 tsubo stores, which offer a complete
selection of products used in daily life, and will be our standard store format going forward.
In particular, we will work to create more emotionally engaging displays by effectively utilizing
the uniqueness of MUJI in that it has apparel, household goods and food products available
in one place. In the past, merchandise has been grouped according to product category orindividual product to create a sense of unity on sales floors. The problem is that as the floor
space becomes more spread out, the impression it creates tends to be less vibrant andmore mechanical. Therefore, by creating emotionally engaging displays that evoke the reallife situation in which products will be used, and by grouping related products by theme, we can develop sales floors that make the productstory easy to understand, and convey excitement that makes customers want to physically interact with products. Through communicationthat conveys the appeal of products in multiple ways, we will also encourage customers to browse around the various departments in stores.

Evolution into Community Centers
We want MUJI stores to serve as local community centers—places where residents can actively participate in community revitalization. First,
we will create model stores in our priority regions—Chiba, Kyoto, Nara, Hiroshima and the Shinetsu area—and work to develop regional
specialty products and resolve local issues in collaboration with local business owners and governments.
In addition, we will enhance services involving customer participation and communication, such as MUJI CYCLE1 and MUJI SUPPORT,2
to create reasons for people to visit our stores and deepen the customer experience.
1. See page 48 for details.
2. A consultation service offered by MUJI for customers. Services are being expanded from lifestyle advice on interior decoration, tidying up, and so on, to consultation on office spacedesign, fashion coordination, and more.

MUJI REPORT 2023

52

Material Issue 2: Address Local Challenges and Revitalize Regions

事業戦略

Interview with a General Manager
design. Another prominent feature is the more than 60 mannequins

Ryohin Keikaku carries authentic apparel that people of all

located throughout the store. Torso only mannequins had previously

ages, genders and races can wear and enjoy for a long time, but

been the norm in stores. The number of full-body mannequins has

we are also selective about the materials we use, and develop andbeen greatly increased, making it possible to display coordinatedsell items that set us apart from the competition. Our natural color

outfits plus accessories. This has contributed greatly to sales. With

cashmere sweaters, which were launched in October 2023, arethe coordinated mannequin outfits at MUJI Shinjuku Yasukuni Dori

only available at two stores, one of which is MUJI Shinjuku Yasukuni

serving as models for stores across Japan, we are leading efforts

Dori, and our online store. For the cashmere used in these sweaters,

to maximize the appeal of MUJI apparel, and are playing a role inthe cost of environmental measures is accounted for in raw material

spreading this approach to all stores.

prices, and we use the funds for environmental protection and

In addition, we find staff members from nearby stores who have

The first MUJI specialty clothing store has opened in Shinjuku. It will
embody the new essence of MUJI and explore the possibilities of clothing.

afforestation projects in cooperation with local governments in Mongolia,

an interest in clothing and give them intensive training to upgrade

where the cashmere is produced. The cashmere is finished in its true,

their skills. This helps to increase their motivation, and that is reflectednatural color and texture, undyed and unbleached, and is woven tightly

in sales. The staff themselves enjoy wearing MUJI clothing, andto keep its shape while maintaining its soft feel. The sweaters havepass along the knowledge they gain from doing so to customers.

been a big hit with customers. Ryohin Keikaku, in its quest to realize

Being a part of a new challenge has boosted their motivation, anda “a truthful and sustainable life for all,” develops apparel that helps

they are working hard to promote sales every day. Ryohin Keikaku

reduce environmental burden and solves the social issues facing

has adopted “Put people at the heart of our business and view profit

people and the environment in production areas. MUJI Shinjuku

as an outcome, not the goal” as a slogan, and it has become clear

Yasukuni Dori embodies that philosophy and is playing a leading role.

that putting people at the center of everything has really changed
the way we do business, and is leading to growth in profits.
2. Staff members who utilize creative displays and other design elements to evoke
the different seasons and make suggestions for improvements.

Mariko Oguri

A Place That Expresses the Appeal of the
Shinjuku Area
The Shinjuku area, which includes Shinjuku Station, the world’s
busiest train station, is an attractive market with many visitors from

General Manager of Western Japan (General Manager of Shinjuku Business Division as of August 2023), Store Management Groupother countries. The store’s entry rate increased remarkably after itreopened with a wider entrance. Almost all of the products it carries
are the same as those found in other MUJI stores, but because of thecreativity in how they are presented, many customers are once again

Taking on New Projects in the Shinjuku
Business Division
Since joining Ryohin Keikaku after I graduated from university, I havebeen involved in store management, including as a store manager
and area manager, and later spent about a decade at headquarters
as part of the PR Division and in other positions. I then returned tosales as the store manager of MUJI Seiyu Ogikubo, right when ouroverlooked in our stores was that the design of the space did notdiscovering the appeal of our products, and we are receiving comments

adequately highlight clothing and because we carry so many items.

like “I had no idea MUJI had clothes like this!” To ensure that MUJI

MUJI Shinjuku Yasukuni Dori specializes in apparel, and we areapparel remains the preferred choice of customers, we will continue

challenging ourselves to find ways to create sales spaces that show

to improve our sales floors, customer service, and other services.

the value of our clothing in the most attractive way.
1. Now MUJI Shinjuku Yasukuni DoriWe want to spread these activities from Shinjuku to the whole world.

A Store for Enjoying Clothing, and Thinking
about the Future

Pursuing the Possibilities of MUJI ApparelOur store concept is connecting clothing, goods and people to the

In principle, MUJI stores are designed to create a calm, peaceful

future. In carrying out the renovation, the theme was “zero waste.”

the renovation of MUJI Shinjuku1 (opened in 2008) into a clothing

environment based on wood, metal and earth materials. At MUJI

We focused on separation and reutilization of industrial waste

specialty store, the first of its kind for Ryohin Keikaku, and working as

Shinjuku Yasukuni Dori, though, we wanted to create the optimal

generated during the renovation, and aimed to recirculate resources

the store manager of MUJI Seiyu Ogikubo. After that, I was appointed

environment for viewing the colors and textures, design and stylingby using furniture and fixtures made from recycled and reusedto the position of full-time general manager of the Shinjuku Businessof the clothing itself, so we thoroughly considered every element

materials, even going as far as using recycled tiles on the floors.

Division. We are promoting localization in the city under a new

down to the lighting, furniture and fixtures, mannequins, walls and floors,

We are proud to have the largest range of ReMUJI products,

approach of narrowing the category focus of stores and working

and even the material used in the ceilings. In addition to using recycled

in which collected used garments are transformed into new clothes

with other stores in the Shinjuku area, including MUJI Shinjuku

aluminum in some of the merchandise shelves, we also adopted

by making slight modifications. In particular, our Tsunagaru fuku, a line

Yasukuni Dori, a clothing specialty store, and MUJI Shinjuku Dori,digital floor maps, neon signs and many other features to make itof used clothing that has been refreshed and combined with othera household goods and food specialty store that was renovated at

fun for customers to look for, find and try on the clothing items.

clothing, has been well-received by customers, and is a key driver ofstores were changing in line with the “Second Founding.”
Around that time, I was splitting my time between helping plan

the same time.

We think of the store as the largest forum for engaging withgenerated in the production process, such as cloth scraps as well as

food products. However, in looking at purchasing trends, what

approach. For a clothing specialty store, it is imperative for sales staff

previously unusable yarn, etc. The second floor contains a recycling

stood out to us was that customers were buying only in specificto have broad, in-depth knowledge about clothing and the skill to offer

station, where we collect not just clothes, but any textile product sold by

categories—for example, they would buy only skin care products,

coordinated styling proposals. That is why we recruit and select

MUJI that has finished serving its purpose, as well as plastic products,

or only food. The core customer base for apparel in particular wasdedicated visual merchandising staff2 from MUJI employees throughout

paper hangers used in merchandise displays, and even surplus foodwomen in their 40s and 50s, and we were not able to fully convey

Japan. We also appointed visual merchandising professionals fromfrom households (as part of food drives). Together with customers,

the appeal of our products to the younger generation and otheroverseas, who keep store displays looking fresh while honing their

we want to think about a society in which resources will continue todemographics. We recognized that the reason for apparel being

specialized skills, including on-the-job training in styling and sales floor

be recycled in an almost effortless way well into the future.

53 MUJI REPORT 2023

shop cards with store recommendations selected based on MUJI’s
unique perspective from among the countless shops in the Shinjuku
area, and usually have cards for 80 to 100 shops available in ourstore. The response has been very positive, and we can hardly print
the cards fast enough. As many of the shops we recommend use
MUJI products, customers can also see how easy those products
are to use by stopping in. I will continue to promote locally rooted
activities together with the store manager and staff to help maintainthe vitality of the Shinjuku area.

sales at this store. We also offer clothing made from materials that are

customers, and the store staff also play a very important part in that

MUJI has a broad lineup of apparel, household goods andBased on our wish to contribute to the area, we are also
promoting an initiative called “SHINJUKU to GO.” We have created

MUJI REPORT 2023

54

Material Issue 2: Address Local Challenges and Revitalize Regions

Business Strategies

Sustainable Community Design
Health and Safety: Supporting the Physical and Mental Health of Local Residents
Ryohin Keikaku is building a platform for realizing a truthful and sustainable society in eachregion. Our stores will support the foundations of daily life as community centers, and seek
to be an integral part of the regions in which they operate. We are engaged in a variety of
projects throughout Japan, both in our stores and in the community at large, and by helping
to address local challenges and revitalize regions we will design sustainable communities.
To drive these initiatives forward, we established the Social Good Business Division, andbased on our role as a company that is essential in supporting social common capital,* Ryohin
Keikaku aims to create a system for realizing public good and mutual assistance in society
and a situation where the economy, culture and the environment are organically connected.

Realizing a Truthful and Sustainable Society

Social Good Business Division

Platform for realizing a truthfuland sustainable society
Role of stores

Stores as community centers* Social common capital: The concept that the natural environment and social institutions are capital that make it possible for all people in a country or a specific region to lead a prosperous
economically stable life and to maintain an appealing, stable and sustainable society.

Childcare Support: Passing Down Natural, Historical and Cultural Resources

MUJI with a Library Inside
MUJI Yoshizuya Kani, a unique store that also features a public library, opened in November 2023
in Kani, Gifu Prefecture. Typical libraries expect people to be quiet, which makes it difficult forpeople to go there with small children. As a first step to solving that problem, this store set up alibrary in the store where people who want to read aloud with their children can feel free to stopin and spend time. In addition to a selection of books that children can enjoy alone or with theirparents, the library features a display of the Himawari-go, the mobile library that served as thecity’s library for many years, as a symbol. We aim to make this a store that people of all ages
who feel attached to the city will want to visit.

Communities: Connecting People, Connecting Communities

Community Market Event
MUJI holds a variety of events, including talks featuring prominent people in the region, exhibitions,and workshops given by the staff of MUJI and senior employees. One such event is the Community
Market, which is held on an irregular basis at MUJI stores throughout Japan, based on the concept
of “connecting people, connecting communities.” The event generates a great deal of excitement
every time it is held. Community Market is a limited-time, market-style event developed andoperated together with people from the local community. The exact content differs depending on
the store, but it may include stalls selling local foods, specialty products and handicrafts, a children’s
clothing exchange event, workshops, and more.
By holding events that bring together people of all generations in cooperation with local residents, in a form that is suited to eachspecific region, we transform MUJI stores into community centers where people can rediscover what makes their community special
and feel more connected to it.

Healthcare Centers
Ryohin Keikaku has initiated the Healthcare Center Project as part of its commitment to resolving
the social issues of maintaining mental and physical health, preventing illness, extending healthy
life expectancy, eliminating health disparities, supporting health maintenance in areas with limited
medical services, and preventing social isolation. Healthcare Centers are open in three stores* asof November 30, 2023, and we plan to expand the project to more stores to support the physicaland mental well-being of local residents. Users have access to a personal medical logbook as wellas measuring instruments including a blood pressure monitor and body composition analyzer. In
addition, a pharmacist, nurse, registered dietician, physical therapist and other specialists are available for consultation free of charge.
Going beyond health maintenance, these centers hold a variety of events and activities that help build connections among local residents.
These activities include physical exercise classes, yoga, leisurely walking tours, dementia prevention events, parent-and-child baby
massage sessions, diet seminars, and a traditional Chinese medicine course. We are also working on health-related product development.
In November 2023, we launched seven traditional Chinese medicine items for problems and symptoms that affect women, such as cold
sensitivity, menstrual pain and menopausal disorders. We also expect to launch the Digital Health Center project in spring 2024, andthis will support health management and health consultations via an app. Using in-store and online channels in collaboration withgovernments and local healthcare facilities, we will accelerate efforts to ensure that local residents can seamlessly obtain services that
support health maintenance, healthcare and nursing care, and community connections, regardless of where they live.
* MUJI Naoetsu, MUJI Hiroshima Alpark and MUJI Youme Terrace Gion

Development of Launching Points for Community Activities: New Lifestyle Proposals

MUJI BASE Kamogawa: Old Folk House Renovation
While Japan’s population is concentrated in the Tokyo metropolitan area, the growing number ofabandoned traditional folk houses (kominka) throughout the country and the survival of local
culture have become social issues. With the acceleration of work style diversification brought onby the COVID-19 pandemic, lifestyles that are not tied to one place are now possible. In that
context, MUJI BASE Kamogawa in Chiba Prefecture opened in August 2023 as a facility that
supports local revitalization and proposes a new way of living, effectively utilizing an idle property
as a medium- to long-term stay facility.
The entire renovated 100-year old house is available for stays of two nights or longer. Based on the theme of “food and agriculture,”
MUJI BASE Kamogawa collaborates with local business owners to give guests the chance to experience the Kamogawa way of life
while learning about farming from local growers. We want to develop MUJI BASE facilities throughout Japan to let guests experience
Ryohin Keikaku’s concept of “a truthful and sustainable life for all,” and offer new lifestyle possibilities that creates a sense of attachment
to places outside of people’s usual surroundings.
For more details ▶https://www.muji.com/jp/ja/special-feature/mujibase/kamogawa-en/

Frameworks for Local Mutual Assistance: Collaboration with National and Local Governments

ITSUMO MOSHIMO* Life in Art is a project to spread art (culture) based on the theme of everyday art. It was started in 2011 by the interior brand IDÉE.

“Always ready for emergencies”—that is the concept behind ITSUMO MOSHIMO, a project aimed
at raising the disaster awareness of society as a whole by incorporating preparedness into everyday
life. As part of the project, we are conducting educational activities that are open to everyone,from children to adults, including disaster prevention workshops and events held in collaboration
with local governments. We want to make familiar daily necessities and food products a part ofdisaster preparedness. By connecting communities, businesses and governments without any
boundaries, we are helping to enhance the disaster preparedness of the whole region.
ITSUMO MOSHIMO is also being expanded to Group companies outside Japan. In August 2023, MUJI Taiwan held an exhibition
showing how MUJI products can be part of preparedness in daily life, and a class in which participants of a wide range of ages practiced
responding to earthquakes and other disasters, administering first aid and using a fire extinguisher.
We also formed agreements with the cities of Fukuyama in Hiroshima Prefecture and Nishinomiya in Hyogo Prefecture, under which
predetermined stores will sell designated products upon request by the local governments in the event of a disaster. By selling and managing these
items as regular products (channel inventory) during normal times, goods that have expiration dates can be kept in stock while automaticallyrolling them over when necessary. In addition, we will help to secure space for storing disaster stockpiles and simplify management operations.

For more details ▶https://atelier.muji.com/jp-en/

For more details ▶https://www.muji.com/jp/ja/special-feature/other/itsumomoshimo/ (Japanese only)

Culture and the Arts: Future Lives Connected to the Past

ATELIER MUJI and Art Events
ATELIER MUJI is an activity that began with the concept of “a workshop where you can go backto the basics of life and find hints for moving forward into the future.” As a reflection of Ryohin
Keikaku’s vision of creating cultural crossroads, we organize various events on themes such as
art and design, and hold exhibitions at the gallery inside MUJI Ginza as well as online.
In 2023, Life in Art* “TOKYO MODERNISM 2023” was held for the second time. At thegallery in MUJI Ginza, the Japanese modern exhibit included various chairs created in Japan. At
the adjacent MUJI HOTEL GINZA, galleries and vintage shops from across Japan were featured,and guest rooms were used for exhibitions and sales of vintage furniture and products. We will continue to provide opportunities forpeople to encounter culture and art, learn about the background through communication, and enrich lives in the future.

55 MUJI REPORT 2023

MUJI REPORT 2023

56

Material Issue 3: Practice Business Activities in Which Each and Every Diverse
Individual Plays a Leading RoleBusiness Strategies

Human Resource Development
Creating Organizations and Developing Human Resources to Practice “Public
Interest and People-Centered Management”
Based on its core value of contributing to society and people, Ryohin Keikaku places employees with a sense of ownership in leading roles,
where they take the initiative to pursue “a truthful and sustainable life for all” in which the activities of individual employees and stakeholders
benefit the public interest. We define this management approach as “public interest and people-centered management.”
For Ryohin Keikaku, the greatest form of management capital is its employees who practice “public interest and people-centered
management.” Development of human resources and the creation of organizations is the cornerstone of our management strategy. As such,
we are recruiting and developing human resources and creating organizations in line with our six pillars of human resource development.

Six Pillars of Human Resource Development and Key Initiatives
1. Recruit and develop employees who have the ambition to embody Ryohin Keikaku’s corporate purpose and values
The hiring of new university graduates and mid-career professionals to support Ryohin Keikaku’s future is proceeding as planned. We intend to
significantly increase hiring of new graduates to support stores we will open in Japan and overseas. In every country and region where we operate,
we will prepare for future growth by stepping up recruitment of management andRecruiting Results
store manager candidates who are knowledgeable about the region to lead on-site
2021/82022/82023/8
Number of new
operations. We have also partnered with external organizations in developing training
28
103
142
university graduate hires
programs to ensure managers have a deep understanding of the MUJI corporate
Mid-career hires
38
105
224
Ratio of mid-career hires
purpose and the specialized skills needed to contribute to the community, and began
57.6%
50.5%
61.2%
to total new hires
an eight-week program for leaders who are active in their respective regions.
Note: Ryohin Keikaku Co., Ltd. only

2. Foster a healthy corporate culture in which diverse employees can show their individuality, think independently
and act on their own initiative
We conducted our own engagement survey to assess the degree to which employees share Ryohin Keikaku’s corporate purpose and two
missions, and are able to take action to realize them. Management, divisions and stores have established forums for discussing the issues
identified in the survey. We have formulated and implemented action plans for the whole Company as well as divisions and stores. In
addition, 180 people (as of August 31, 2023), have participated in the Leadership Talent Development Session, a forum for dialogue anddiscussion on Ryohin Keikaku’s ideal form of management. We will further develop this session on a Company-wide basis.

3. Create a working environment where employees can be themselves, realize physical and mental well-being andcontinue to work with peace of mind
Ryohin Keikaku has a variety of systems in place to ensure it is a company that is attractive to job seekers, and one that people want tostay with for a long time. We have expanded eligibility and subsidies for comprehensive health screenings and gynecological exams topromote the health of employees. In addition, we are pursuing even greater flexibility in work style options, including the introduction of aflextime system with no core hours, and will also consider other support measures for various life events. In FY2023/8, we implemented awage increase of 6% on average across the Company.

4. Train and assign leaders capable of bringing out the individuality and potential of diverse employees andmaximizing organizational performance
The Human Resources Committee discusses the development and promotion of leadership candidates who will shape the Company’s
future. It is currently deliberating on the method of cultivating individual leaders and domestic and overseas job rotations. Management iscommitted to fast-tracking candidates by identifying the strengths of each individual and determining issues to be addressed. We also
conduct a store manager training program to support new store openings in Japan and overseas and provide on-the-job training so thateach person can effectively learn the necessary business skills. In addition, we have introduced a mentoring system to support store
managers and a program in which headquarters members actively offer support by connecting face-to-face with store employees.

6. Establish and operate a personnel system to support employees’ sense of participation and willingness to takeon challenges

Medium termLong term
Short term
We have established a grade system that ensures employees’ growth and(3 years)(upon retirement)
achievements are reflected in their compensation earlier than in the previous
J-ESOP
E-Shipsystem. Discussions are taking place in the Evaluation and Training Conference
Fixed salary
Challenge
to ensure that performance evaluations are done fairly, and we have also begun+
Shareholding
Shareholding
expectation
association
association
Annual bonus
points*monitoring whether adequate feedback is being given to individual employees.
The employee stock ownership plan (J-ESOP) and the trust-type
employee stock incentive plan (E-Ship), which were introduced to foster a sense of ownership
Number of Employees in Employee
Shareholding Associationand managerial awareness, are currently offered only in Japan, but we are preparing to
make them available to employees outside of Japan as well.
2021/81,848* Challenge expectation points: Points that can be converted to shares of the Company’s stock upon retirement are awarded
to employees who take on challenges at a high level, regardless of their membership in the shareholding association.

57 MUJI REPORT 2023

A training program in action

2,626

2023/82,623

Human Resource Training and Development Strategy
Issues to Address
In Japan, the working-age population (15 to 64 years old) was 74 million as of 2023, but is projected to decline to 70 million by 2030.* Thisis expected to make recruiting more difficult every year, and workplaces with poor work environments and unattractive companies may not
make it in the recruiting market. The companies of choice will be those that are rewarding places to work, are utilizing automation and AI todrive efficient productivity improvements, and are able to make full use of the resulting margins to allow for self-actualization. In Japan, wemust prepare to actively hire people of foreign nationalities, housewives/househusbands and students. We recognize that further change
will be necessary as a company that can maintain employees’ work motivation and personal health, provide long-term employment, andaccommodate diverse work-life balance needs.
* Source: Population Projections for Japan (2023 revision) published by the National Institute of Population and Social Security Research

Three New Strategies
Securing human resources and improving and maintaining the work environment are essential for future corporate growth. We will strive to create
an environment where employees can devote themselves to their work with peace of mind, align themselves with the Company’s direction,and enjoy doing their jobs. This will result in the creation of more proactive employees who take the initiative as well as a higher level of engagement.
1. We will establish an environment in which each and every employee can embody Ryohin Keikaku’s corporate purpose and two missions, takecharge of their own career development, and enjoy achieving their own goals.
2. To create a vibrant organization, we will recruit the people necessary to support new store openings in Japan and overseas, provide management
training to develop future managerial talent and headquarters and overseas personnel, and aggressively promote fast tracking and promotion to
key positions. In particular, we will enhance the development of systems to create a positive environment for store personnel.
3. We will maintain a workplace environment that offers rewards such as work-style flexibility, long-term employment, support for life events, and asystem for asset building for retirement. We want employees to feel that working for Ryohin Keikaku will lead to lifelong peace of mind, and help
bring out the vitality of each individual.

Key Measures
Recruitment • We will build a system that enables us to make use of regional networks to recruit people who deeply understand Ryohin Keikaku’s
corporate purpose. We will actively hire new university graduates, people who have worked one or two years after graduation andlocal employees, as well as promote employees from within the Company based on our store opening strategy and workforce plans.
• We will attract high-caliber talent and aggressively recruit professionals in various fields. We want these people to lead store operations,store openings, product development, material development, resource recycling initiatives, logistics, business development, IoT andtechnology.

5. Develop and establish education and training systems to support the needs of employees who want to learn andgrow through their careers
We have revised the Company-wide education system, reorganized training systems
for each grade from newly hired employees to top executives, and greatly expanded
training programs featuring guest lecturers. Among our new initiatives are programs to
support self-directed career development, including regular study sessions for employees
to learn about the work and current activities of people in other divisions, workshops
where employees think about their own career path, an overseas training program,and a Company-wide job posting program. We will remain committed to providing anenvironment in which employees can develop their own careers independently andcontinue to grow and learn.

2022/8Training• Executives and division general managers have already participated in the Leadership Talent Development Session, a forum fordiscussing Ryohin Keikaku’s desired corporate culture, organizational climate and approach to work. We will further expand thisinitiative to include all Company employees.
• By instilling the ideas of quality control and industrial engineering throughout the Company, and encouraging employees to review
and further evolve their work processes, we will develop a corporate culture of proactivity and taking the initiative.

Systems• To foster a mindset of taking on challenges among employees, we will revise the performance-based bonus system and consider
further expanding use of trust-type stock incentive plans.
• We will establish an environment and design systems to enable diverse employees to flourish, regardless of their age, birthplace,nationality or gender. In addition, we will build a framework to support employees in developing their careers and achieving their goals.
MUJI REPORT 2023

58

Material Issue 3: Practice Business Activities in Which Each and Every Diverse
Individual Plays a Leading RoleBusiness Strategies

Initiatives for Diversity & Inclusion
Recruitment and Employment
In its employment activities, Ryohin Keikaku makes sure to understand the customs of thecountries 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) as a way to present its employment and labor policies andthe Group Compliance Code of Conduct. To ensure that all employees understand its content,
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 and professional growthof 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 from our differences,and help each other grow.

Number of Employees (Ryohin Keikaku Group)
Employees

Non-regular employees*

24,00020,795

18,16319,009

9,281

9,834

8,882

9,175

10,0742021/82022/82023/816,00010,721

8,000

0* Average number of employees per year based on aneight-hour workday calculation method

Average Number of Employees* Using theChildcare System

Approach to Working Hours

Initiatives
Career Workshop for Women in Their Twenties

227

200

0

2021/82022/82023/8

Conventional Work System
9:00

11:30 12:30

18:00

Break
Work from 9:00 a.m. to 6:00 p.m. as a general rule

Flextime System (Super flextime with no core hours)
5:00

22:00

Time period in which employees can arrive and leave at any time

Ratio of Employees with Disabilities
(%)

4.5

3.69

3.41

3.23

3.0
1.5
0

2021/82022/82023/8

Note: Ryohin Keikaku Co., Ltd. only

Ratio of female managers at the deputy
manager level and above: 27.8%
Ratio of female directors: 37.5%2
Ratio of female employees: 54.8%
1. Ryohin Keikaku Co., Ltd. only
2. As of November 23, 2023

Career workshop

One of the current issues we face is that only a small number of the female employees who are raising children are employed as store managers.
There is a reason behind that. Until now, being able to work full-time and work late shifts was a requirement for promotion to store manager,
which made it difficult for working mothers to take on that position. From now on, we must create an environment in which all employees with thedesire and ability can take on any position they aspire to, and shift to a culture that enables talented people to thrive.
In FY2023/8, we conducted a questionnaire and interviews of current store managers who are working mothers and working mothers who
aspire to be promoted to store manager to better understand the actual situation. We have implemented improvement measures that reflect thesystematic and awareness problems that were discovered, and made promotion-related and system reforms. As a result, 10 women have been
newly promoted to the positions of store manager and manager. To further promote the success of working mothers, we will continue to assessand develop each person’s business skills, and create support systems.

Special Feature

Interview with a Working Mother and Store Manager

Special Feature

An Employment Environment That Facilitates Taking Childcare Leave

59 MUJI REPORT 2023

Through interviews, we found that many younger female employees are worried about theirlong-term career development and advancement. To help them manage their own careers
and raise their motivation to work, we conducted career development training for female
employees in their twenties. The aim is not just to help them envision their career path, but toalso make it more actionable by also looking at actual issues and potential biases, and thento create opportunities for making changes in behavior.

Results for FY2023/81

Support for Working Mothers

Break

Employment of People with Disabilities

As part of our efforts to make Ryohin Keikaku a great place to work, we have improved various
systems, established a consultation contact point, and updated our childbirth and parenting
guidebook to help employees take childcare leave that suits their needs, regardless of gender.
In October 2022, we amended three systems. The amendments included loosening
the conditions for taking childcare leave, establishing paternity leave, and enabling childcare
leave to be split into parts. Paternity leave is available in several different patterns, according
to the employee’s family circumstances. One such example is postpartum support-type
leave in which the start of leave coincides with the birth of the child. There is also a batonpassing option in which paternity leave is timed to coincide with the partner’s return to work.
As a result, the percentage of men taking paternity leave has been increasing every year.

Promotion of Participation and Advancement of Women in the Workplace* Including partner employees
Note: Ryohin Keikaku Co., Ltd. only

296

300

Work-Life Balance Proposals

Ryohin Keikaku began hiring individuals with disabilities in Japan in 2000. In 2009, we launchedthe Heartful Project to promote the “sustainable happiness of co-workers,” “self-development
through mutual trust and cooperation” and “expansion and stabilization of employment at stores”
for those with disabilities. We have also established a support system that includes employment
management and guidance tailored to the characteristics and individuality of each person andan evaluation-based step-up system to help people with disabilities reach their full potential.
Using the “Second Founding” as an opportunity to take root in local society, our stores will
promote the Heartful Project together with local communities and move forward with people
with disabilities to create places in which they can make the best use of their skills.

Ryohin Keikaku launched the Diversity Committee as a Company-wide committee in FY2022/8, recognizing the critical importance of having anenvironment in which diversity is respected, regardless of gender, age, nationality, or other characteristics, and where diverse human resources
can thrive, balance work and life events, and remain motivated. Chaired by the director in charge of the Human Resource Development Division,
this committee is tasked with promoting change, including by devising strategies and systems for building an organization and corporate culturethat can make the most of diversity of people, values and lifestyles, and by proposing ideas for transformation.
The committee investigated in-house problems and issues by conducting interviews and through questionnaires. It identified “promoting theparticipation and advancement of women in the workplace” as a topic of high urgency and priority. Therefore, the Company narrowed its focus tothis theme in FY2023/8. Female directors and women working in stores also participate in the monthly meetings of this committee, where they
help identify issues and develop strategies for improvement.

One of the reasons that Ryohin Keikaku is promoting the participation and advancement of
women in the workplace is that female employees have a higher turnover rate than male
employees, and as a result, the percentage of women in managerial positions is low. In orderto ensure that all employees have an equal opportunity to succeed, we believe it is urgent
that we become a company where women are encouraged to have a long career and thrivewith a sense of security. That is why we are creating an environment that takes into accountvarious lifestyle changes, and the need to balance work with childcare, nursing care, disease
treatment, and other life events.

372

400

100

We have systems that allow employees to choose from a variety of work styles in order to findbalance between work and life events such as childbirth, childcare and nursing care. Thesesystems include childcare and nursing care leave, a shorter working hour system, and a familycare system, and can be used by all employees regardless of gender. We have also offered abalanced four-day workweek system since May 2021.
Eligibility for the childcare system, which permits employees who are raising children towork shorter hours, was expanded to partner employees in November 2021, and the applicable
period was extended from “until the age of 3” to “until completion of the 4th grade of elementary
school.” These are some of the ways in which we are creating an environment where employees
can work with peace of mind. In September 2022, we introduced a flextime system with nocore hours for headquarters employees. This allows for high flexibility in work arrangements,
and through work style options to accommodate various needs employees are able to improvetheir self-management skills as well as their efficiency and productivity.

Diversity Committee

Percentage of Employees Taking Childcare
Leave
(%)

150

Female

105.8
100

Male

141.6
102.9
59.0

50

9.3
0

2021/821.4
2022/82023/8

Note: Figures are calculated in accordance with the new
calculation method of the Ministry of Health, Labourand Welfare.

I joined Ryohin Keikaku in 2009, and have built a career as a store manager. When I first returned to work aftermaternity leave, I did not hold this position, but once my child’s health became stable, I again thought I would like tochallenge myself as a store manager. After numerous interviews with people in the Human Resources (HR) Division,
managers and executive officers, I became the store manager of MUJI Tokyo Midtown in 2023.
In working as a store manager, I was able to clearly communicate my preferences, including the area I work in,which days and hours I work, the extent of sales promotion activities at the facility where the store is located, and a
Yuki Shiraki
desire for a computer for personal use. Almost all of my wishes were taken into consideration, and now I am also able
Store Manager
to take on the challenge of advancing my career in a very positive environment. I regularly have talks with my boss and
MUJI Tokyo Midtown
people in the HR Division, and I feel I am being supported in maintaining work-life balance. At the same time, I also feelthe importance of having a solid foundation in place for store operations that make diverse work styles possible,
including securing adequate staffing, fostering a climate of understanding, and having an advanced human resource development system.
Currently, Ryohin Keikaku is actively working to create a positive work environment for all employees. In addition to working mothers, there
are other employees facing a variety of other life situations, including working fathers and caregivers for family members. As for me, making sure
my voice is heard by the Company and helping to further improve the environment have led to the job satisfaction I enjoy now.
MUJI REPORT 2023

60

Material Issue 4: Realize Governance Aligned with Public Interest and People-CenteredManagement

Business Strategies

Working toward “Public Interest and People-CenteredManagement”
Strengthening Engagement with Shareholders and Investors

Customers

We promote the practice of “public interest and people-centered management,” where each of
our employees has a sense of ownership and takes a leading role in our business activities that
contribute to the public interest. These activities include those held at locally rooted stores, andalso ones promoted by each employee together with customers, local communities and business
partners. By engaging in constructive dialogue with stakeholders and reflecting their opinions andrequests in our business activities, we strive to make a positive impact on society.

Business
partners

Employees

Local
communities
and society

Shareholders
and investors
Governments

Stakeholder engagement ▶https://www.ryohin-keikaku.jp/eng/sustainability/muji-sustainability/stakeholder-engagement/

Strengthening Internal Communications
In order to realize “public interest and people-centered management,” it is necessary for employees to participate in management, andmake suggestions to the Company while working in unison with managers. To foster a sense of ownership in each employee, we are sharing
information about management and increasing opportunities for communication between management and employees. Starting in FY2023/8,
we have worked to strengthen communication between stores and headquarters, and between general employees and management, toimprove employees’ engagement and sense of involvement in management.

Company-wide Meetings
To achieve these goals, Ryohin Keikaku holds Company-wide
meetings in various forms as opportunities to share the Company’s
philosophy, business condition and daily business activities as
it works toward its ideal structure.

Good Meeting venue

Name of
Meeting

Meeting
Frequency

Main
ParticipantsContent

Good Meeting
venue

Twice ayear

All Group
employees

Message from management, presentationof semi-annual initiatives of the wholeGroup, recognition of products andemployees, presentation of good practices

MUJI Dialogue
venue

Once amonth

All employees

Message from management and Q&A
sessionStore managers
meeting

Once amonthStore Sales
Division employees(store manager
level and higher)

Discussion and information-sharing onsales strategies

Employeemeetings

Once amonth

Headquarters
employees

Introduction of the work and initiativesof each division and presentations by
the people in charge

Store managers meeting

To effectively practice “public interest and people-centered management,” we believe it is important to build an appropriate shareholder
composition with well-balanced ownership among domestic investors, overseas investors, and individual/employee shareholders. As such,
we are actively engaged in IR both inside and outside the Company. Measures to strengthen our internal IR activities include encouraging
online participation in employees’ shareholder meetings and holding financial results briefings specifically for employees.

Redesign of In-house Newsletter

Printed edition of MUJI NEWS (in-housenewsletter)

Team ESG Activities
To foster a Company-wide awareness of being a front runner in ESG management, we have enhanced ourefforts to publicize Ryohin Keikaku’s ESG material issues, targets and initiatives in forums such as the
MUJI Dialogue venue and employee meetings. In July 2023, we launched Team ESG, a group of volunteers
who are very interested in the topic of sustainability. All interested employees, including partner employees,
are welcome to participate no matter which department or region they work in. As of December 31, 2023,
approximately 150 people have joined the team.
In online meetings, Team ESG holds study sessions and engages in discussions on major themes
and good practices in the Company related to ESG management. Members are also active on the message
board and in area cleanup activities to build connections between participants.

61 MUJI REPORT 2023

Engagement with Shareholders at the General Meeting
To encourage the participation of more shareholders, we hold the General
Meeting of Shareholders on a public holiday, and a separate Shareholders’Meeting after the general meeting to further deepen direct communication
with shareholders. The combined in-person and online attendance was about
800 people in 2022 and 950 in 2023. As part of efforts to build relationships
with shareholders, we have introduced a shareholder benefit program in whichshareholders who own at least 100 shares (one lot) receive a 5% discountby presenting their Shareholder Card when shopping at MUJI stores.

Shareholders’ Meeting after the
General Meeting of Shareholders

Shareholder Card

Engagement with Individual Shareholders and Investors
Ryohin Keikaku holds store-based Shareholders’ Meetings in small groups to provide an opportunity for individual shareholders to speak
directly with executives and store managers. We are also working to enhance disclosure to individual investors in ways such as posting
videos of Shareholders’ Meetings on the Ryohin Keikaku website. In addition, we regularly conduct Company presentations for individual
investors, and are increasing contact points.
Results for FY2023/8• Shareholders’ Meetings in stores: 7 meetings with a total of 133 participants
We hold Shareholders’ Meetings at stores throughout Japan to explain to shareholders the direction inwhich Ryohin Keikaku is moving and initiatives at stores. This helps to deepen understanding of ourbusiness activities, and the questions and comments we receive from shareholders on store operations,our product lineup and other matters are reflected in the Company’s management.
Shareholders’ Meeting held at a store• Seminars for individual investors: 2

Engagement with Analysts and Institutional Investors

Internal IR

We made changes to the in-house newsletter in order to instill a sense of ownership in Company activities,
including activities based on ESG management, and to increase employee engagement. Previously, we
distributed videos and articles on the Company’s activities, new product information, and other subjects
through the in-house portal site. In August 2023, we began issuing printed newsletters and distributing
them to stores to better ensure the information reaches store staff throughout Japan. A great deal of
information related to ESG management is published on the front page, including the progress of reuse
and recycling efforts, and local activities.

Ryohin Keikaku’s IR program promotes constructive dialogue with domestic and foreign shareholders and other investors, with the goal ofsustainable growth and long-term enhancement of corporate value. The opinions obtained through dialogue with shareholders and investors
are fed back to management and the Board of Directors, ensuring those ideas are reflected in Ryohin Keikaku’s business activities.

Arigato Cleanup (cleanup activity aroundthe former headquarters building)

Ryohin Keikaku’s president and the director in charge of IR participate in financial results briefings, and hold small-scale meetings for analysts
and institutional investors on a regular basis. In addition, the director in charge of IR and the IR officer conduct interviews that cover topics
such as ESG issues, and interviews with the executive in charge of shareholder voting. The views of investors obtained through this dialogue
are regularly reported to the management team. We also hold small-scale meetings between outside directors and domestic and overseas
shareholders and institutional investors, and post a summary of the Q&A session on our website. To improve the quality of non-financial
information, we are taking steps to promote better understanding of our business, including through product exhibitions, store tours, anddialogue exchanges about MUJI REPORT, our integrated report.
Results for FY2023/8• Individual IR meetings: 325• Dialogue between outside directors and institutional investors: In August 2023, as we did in 2022, we helda small-scale meeting between 11 representatives of 11 domestic and overseas organizations (institutional
investors) and two outside directors of Ryohin Keikaku. A lively discussion took place on topics that included
the state of the Board of Directors and the progress and challenges of the medium-term business plan.
• Dialogue with the executive in charge of shareholder voting: 13 companies that are major shareholders
Dialogue between outside directors and• Product exhibitions: 2 times
shareholders (institutional investors)• Store tours: 2 times• MUJI REPORT dialogue exchanges: 2 times

IR Email Distribution Service (Japanese Only)
We send out IR information to everyone who has registered for our IR email distribution service, including informationon the Shareholders’ Meeting and other events held exclusively for shareholders, as well as the latest news.

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