WATTS CO., LTD.
2735・Standard Market・Retail Trade
Business
Watts Co., Ltd. is a 100-yen shop chain operator founded in 1995. Under store brands such as "Watts," "Watts with," "meets.," and "silk," the company operates 1,868 directly-managed domestic stores and 9 franchise and other stores, totaling 1,877 stores (as of end-August 2025). Its core business consists of tenant-type stores located in shopping centers and supermarkets, primarily selling everyday consumables such as stationery, cleaning supplies, kitchenware, and sanitary goods. Domestically, it also operates new store formats such as "Buona Vita," "Real," and "Tokino:ne," while overseas it operates directly-managed stores in Thailand and Peru, as well as a wholesale business exporting to more than 30 countries. Listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
Of net sales of ¥61,578 million, directly operated stores account for ¥55,511 million (approximately 90%) and wholesale and other account for ¥6,067 million (approximately 10%). The company secures a gross margin of 38.8% while curbing freight costs through a direct shipment system from manufacturers and wholesalers combined with small-lot delivery via outsourced logistics centers. The structure aims to improve profitability through product mix improvement via the introduction of high-priced merchandise and IP-licensed products, as well as labor savings through self-checkout registers and automated ordering systems.
Company Strengths
As of the end of August 2025, the company operated 1,868 directly-managed stores and 9 franchise (FC) and other stores, totaling 1,877 stores. In FY2025 (ending August 2025), 142 new stores were opened, achieving a net increase of 70 stores. The store expansion model, centered on tenant-type stores, maintains nationwide customer touchpoints.
The number of stores converted to "Watts" or "Watts with" reached 1,516 stores (80.8% of the total), a net increase of 133 stores year-on-year. Through the introduction of high-priced products, collaboration products with celebrities and anime characters, and the original cosmetics brand "fasmy," the gross profit margin improved to 38.8% (up 0.3 percentage points year-on-year).
The equity ratio at the end of FY2025 (ending August 2025) was 47.3% (up 6.0 percentage points from 41.3% at the end of the previous fiscal year). Interest-bearing debt stood at ¥3,337 million, while cash and cash equivalents totaled ¥6,187 million, putting the company in a virtually debt-free position. The direct-from-manufacturer shipping system, which reduces freight costs, has also contributed to financial efficiency.
ENVALITH's Perspective
Performance Trend
Revenue has followed a gradual upward trend since bottoming out in FY2023 (ending August 2023) at ¥59,309 million, with cumulative revenue for the first nine months of FY2026 (ending August 2026) reaching ¥48,010 million (up 4.3% year on year). Operating profit has improved for three consecutive fiscal years since bottoming out in FY2023 (ending August 2023) at ¥622 million, and cumulative operating profit for the first nine months of the current fiscal year reached ¥1,368 million, accelerating to a 33.8% year-on-year increase. This was driven by existing-store sales at 104.0% of the same period last year and a 0.2-point improvement in gross profit margin. As an external factor, increased demand stemming from the seal boom and naphtha shortages linked to Middle East tensions provided a tailwind. The full-year forecast (revenue of ¥63,000 million, operating profit of ¥1,500 million) remains unchanged.
Growth Strategy
Aiming for sustainable growth through three pillars: strengthening domestic 100-yen shop profitability, establishing new business formats, and converting overseas operations to a wholesale model
The company continues to optimize product assortments by location and customer demographics using POS data, alongside store renovations. Watts brand stores expanded to 1,650 stores (85.4% of total) by the end of Q3, achieving existing-store sales of 104.0% year-on-year. Product mix improvement through an increased proportion of premium-priced, IP-licensed, and collaboration merchandise is contributing to gross margin improvement.
The company is promoting the introduction of self-checkout registers at tenant-type stores to reduce waiting times during congestion and streamline in-store labor. Self-checkout and cashless payment systems are also being introduced in the domestic other business (Real), advancing improvements in store operational efficiency. This is being continuously rolled out as a countermeasure against rising labor costs.
In response to the emergence of competing formats priced below Japanese-style 100-yen shops, the company has completely eliminated overseas directly-operated stores and shifted its strategy toward wholesale expansion. It is strengthening new market development and support while supplying products to over 30 countries, including the Philippines, Vietnam, Laos, and Hong Kong. Although sales declined due to the reduction of directly-operated stores, the company is prioritizing the rationalization of its earnings structure.
The variety goods store "Buona Vita", primarily deployed in commercial facilities in the Kanto region, won the Checkout/Cashier Grand Award at the "Service of the Year 2026" awards. The discount store "Real" opened a new store in Higashihiroshima City. The company is diversifying its revenue sources by expanding its offerings of the lifestyle brand "Tokino:ne" and the original cosmetics brand "fasmy", among others.
The company released a 30th anniversary web commercial featuring a dance group popular on social media, aiming to boost brand awareness and acquire new customer segments. Combined with product lineups that capture consumption trends such as the sticker boom, this is capturing steady demand for products with entertainment and hobbyist appeal.
Last updated: July 17, 2026