ENVALITH
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RENAISSANCE,INCORPORATED

2378・Prime Market・Services

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RENAISSANCE,INCORPORATED2378

Business

Renaissance, Inc. is an integrated health service company founded in 1979, with sports club operations at its core. Its main business is the Sports Club Business, encompassing fitness clubs, swimming, tennis, and golf schools (141 directly operated facilities and 86 facilities under operational contracts, among others). The company also operates a nursing care rehabilitation business (87 facilities) centered on "Genki Gym," a rehabilitation-focused day service; a Home Fitness Business utilizing e-commerce and TV shopping; and a Health Promotion Business for Regions & Municipalities (BtoG), including designated facility management operations. Its consolidated subsidiaries include Kaede no Kaze Co., Ltd., BEACH TOWN Co., Ltd., and RENAISSANCE VIETNAM, INC., and the group operates a total of 330 facilities nationwide. Its main customers span a wide range, including individual members (442,085 enrolled), corporations and health insurance societies, municipalities, and nursing care users.

Business Model

The main revenue source is monthly membership fees for sports clubs (fitness and school members), with unit prices rising following the October 2025 price revision. In addition, the company combines nursing care rehabilitation revenue from long-term care reward income, product sales revenue from EC and TV shopping in the home fitness business, and management fee income from designated management and outsourced operations of municipal facilities. The corporate monthly membership program for businesses also contributes to stabilizing the membership base.

Company Strengths

As of the end of FY2026 (ending March 2026), the company operates 330 facilities nationwide, comprising 232 sports club facilities, 87 nursing care rehabilitation facilities, and 9 outdoor fitness facilities. Membership stood at 442,085 (up 1.7% year on year), continuing to exceed the prior year's level. The merger with Sports Oasis has added a store network in central urban locations, expanding the sales base for both corporate and individual customers.

In addition to fitness club operations, the company has built a nursing care rehabilitation business encompassing rehabilitation-focused day service facilities "Genki Gym" (Genki Gym) (52 directly operated and 35 franchised facilities) and Kaede no Kaze (13 directly operated day care facilities and 23 franchised facilities), enabling it to serve users ranging from mild to relatively severe care needs. In April 2026, the company also completed the acquisition of the business of 5 "My Reha" facilities, continuing to expand its facility network in the nursing care domain.

The company has continuously expanded its facility network through M&A and business acquisitions, including making Tokyu Sports Oasis a wholly owned subsidiary and merging with it (2024-2025), making Kaede no Kaze a wholly owned subsidiary (December 2025), and deciding to acquire 8 facilities from Tokyu Sports System (planned for July 2026). The company has also leveraged a takeover-style opening approach for competitors' facilities, achieving expansion while keeping initial investment costs low.

ENVALITH's Perspective

Net loss attributable to owners of parent for FY2026 (ending March 2026) was ¥2,106 million (a reversal from a profit of ¥766 million in the previous period). The main causes were impairment losses of ¥3,056 million on 38 facilities and a provision for store closure losses of ¥442 million. The equity ratio declined from 21.8% to 17.0%, and net assets per share also decreased from ¥534.87 to ¥405.89. Total net assets decreased by ¥2,429 million, from ¥12,118 million to ¥9,689 million, clearly indicating deterioration of the financial structure. The company itself has positioned the first two years of the "2026-2030 Medium-Term Management Plan" as a "period for restoring and strengthening the impaired financial structure."

Cash flow from operating activities improved to ¥4,122 million (from ¥3,510 million in the previous period), but investing cash flow expanded to -¥4,399 million (from -¥3,158 million in the previous period) due to ¥3,726 million in acquisitions of property, plant and equipment and ¥592 million in acquisition of Kaede no Kaze shares, among other items. Short-term borrowings increased from ¥4,200 million to ¥5,500 million, and long-term borrowings (including current portion) also increased from ¥7,539 million to ¥8,951 million. The debt redemption period improved from 8.2 years to 7.5 years, but the business profit interest coverage ratio deteriorated from 2.6x to 1.9x, requiring attention to the risk of increased financial burden in a rising interest rate environment.

The consolidated earnings forecast for FY2027 (ending March 2027) projects net sales of ¥68,000 million (up 4.7% year on year), operating profit of ¥1,800 million (up 15.0% year on year), and net income of ¥500 million, anticipating a return to profitability. However, the fact that the "2024-2027 Medium-Term Management Plan" formulated in May 2024 (targeting net sales of ¥75,000 million and operating profit of ¥5,500 million for FY2027) was significantly revised during the current period and replaced with the "2026-2030 Medium-Term Management Plan" is a factor that undermines market confidence in the feasibility of achieving the plan. As an external environment factor, the rise of low-cost unmanned gyms and persistently high utility and labor costs are headwinds to earnings recovery.

Growth Strategy

Under the 2026-2030 Medium-Term Management Plan, the company prioritizes recovery of its financial structure, targeting net sales of ¥77,000 million and operating profit of ¥3,500 million in FY2030 (ending March 2031)

Decided to withdraw from 6 unprofitable, high-rent facilities located in central urban areas, recording the withdrawal costs in a lump sum during the current fiscal year. Completed response to facilities showing signs of impairment as of the fiscal year-end. The first half of the 2026-2030 Medium-Term Management Plan (FY2026-FY2027) is positioned as a period for restoring and strengthening the financial structure, and a review of cash allocation is being promoted.

Decided to acquire 8 comprehensive sports club facilities and others operated by Tokyu Sports System, a wholly owned subsidiary of Tokyu Corporation, effective July 1, 2026. Aims to expand sales and membership in the Sports Club Business by acquiring a member base in prime locations in the greater Tokyo metropolitan area.

Made Kaede no Kaze (13 directly operated day care facilities and 23 franchised facilities) a subsidiary in December 2025, and acquired the business of 5 Leben Community "MyReha" facilities in April 2026. Strengthening approaches to users with higher levels of care needs, and building a business foundation in anticipation of revisions to the nursing care fee system.

Implemented a price revision in October 2025 targeting fitness members and school members, achieving an increase in the average membership fee. Expansion of monthly corporate membership for corporations and health insurance societies, leveraging Sports Oasis's prime central urban locations, contributed to the increase in the number of enrolled members (up 1.7% year-on-year to 442,085 members).

Under the 2026-2030 Medium-Term Management Plan, aims to achieve in FY2030 net sales of ¥77,000 million, operating profit of ¥3,500 million, operating profit margin of 4.5%, ROE of 10.0%, ROIC of 6.0%, dividend payout ratio of 40.0%, and equity ratio of 20.5%. This plan follows a major revision in response to the failure to achieve targets under the previous medium-term plan (2024-2027).

Last updated: July 19, 2026