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Tokyo|TSI announced its Q1 Results and Medium-Term Growth Plan

Jul 12, 2018.Tokyo, JP
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Shinichi Uedatani ・New CEO

TSI Holdings announced its first quarter results on July 6th. Sales were 39,193 million yen (*US$ 349 million), an increase of 0.8% from the previous term, a gross profit of 22,199 million yen (*US$ 200 million), and a decrease of 0.9%. An operating income of 1,111 million yen (*US$ 9.8 million) , with a decrease of 34.7% from the previous term, an ordinary profit of 1.48 billion yen (*US$13 million) , a decrease of 24.4%, and quarterly net income attributable to the parent company of 578 million yen (*US$ 5 million) , a decrease of 49.1% year on year. Net sales was contributed by the street brand HUF acquired in November last year. The dissolution of its subsidiary, WAVE International, which owns womens brand GOA, influenced negative profits.
Nano · universe (9% increase from the previous term), NATURAL BEAUTY BASIC (2% increase), MARGARET HOWELL (2% increase), PEARLY GATE (4% increase) and HUMAN WOMAN (2.5% increase) are the brands which performed well in this term. Popular streetwear brand STUSSY’s net sales declined 19.8%, 1,343 million yen (*US$ 12 million) year on year as its headquarters decided to expand its domestic plan on a global scale and stopped production of Japanese planned products.
On July 9th, the new CEO Shinichi Uedatani took office on May 25th and announced the 3-year medium-term strategy plan at the settlement meeting. Core themes in the policy included: "Elimination of the deficit business, reform of the organization structures", "Investments in business & growth", "Federal management where subsidiaries can maximize their strengths". In the future, TSI will try to improve the loyalty of each brand through management that makes full use of the fields each subsidiary is good at.
Uedatani says, "There is no chance of winning to compete with overseas fast fashion and emerging apparel enterprises at price competition level. In Asia, especially Japan, there is a huge number of middle class consumers, so we will create an aggregate of brands that can sell the products at a fixed price. " He also mentioned that Arpege, a subsidiary that operates Apuweiser-riche, discontinued its mark downs since last summer and is selling only fixed prices at its brick-and-mortar store which had was doing well.
TSI will strengthen the menswear and miscellaneous prodocut category to stabilize the earning base and they are also positive about M&A in areas where they don’t have in the know-hows.

*1 USD = 111.02 JPY (July 11 2018) approx. values