Y's table corporation

There is a risk that impairment losses may occur if the profitability of directly-operated stores significantly declines or if a decision is made to close a store. Both impact and likelihood are assessed as high, and the potential financial damage is significant. The Group is addressing this risk by maintaining and improving store profitability and improving overall company profitability through reductions in head office expenses and other costs.

There is a risk that prices of key food ingredients may surge due to factors such as weather, international conditions, and foreign exchange rates, with both impact and likelihood assessed as high. As cost increases directly squeeze profits, the impact on the Group, whose core business is high-value-added restaurants, is significant. The Group is working to curb price increases through continuous review of menu offerings and ingredients used, as well as strengthening collaboration with suppliers.

There is a possibility that progressing labor shortages may make it impossible to secure the personnel necessary for store operations, with both impact and likelihood assessed as high. In some cases, raising wage levels to secure personnel may be necessary, raising concerns about both a decline in net sales and a decline in profit. The Group is implementing measures such as improving employee treatment to strengthen recruitment and improve retention rates, as well as improving store productivity and reducing costs.

Since XEX Group stores are large in scale and have high fixed costs, there is a risk that a significant operating loss may occur if net sales decline. The impact is assessed as high, and the effect on the Group's overall business performance is significant. The Group continues efforts to enhance value-added offerings and improve customer satisfaction, while also advancing productivity improvements through cost reductions and other measures.

There is a possibility that stable procurement of key food ingredients may become impossible due to weather, international conditions, and other factors, with the impact assessed as high. Procurement instability carries a risk of directly leading to a decline in net sales. The Group conducts continuous information gathering on the supply-demand situation of key food ingredients and carries out procurement activities that also consider the use of substitute ingredients.

If an accident related to store hygiene, such as food poisoning, occurs, there is a risk of a decline in net sales due to business suspension and claims for damages from victims. The impact is assessed as high, and this could develop into a serious situation accompanied by a loss of trust in the brand. The Group works to prevent such incidents through thorough compliance with hygiene-related manuals and regular hygiene inspections conducted by external contractors.

Various expenses related to store operations, such as utility costs and office supply expenses, are on an increasing trend, with the likelihood assessed as high. Cost increases carry a risk of directly squeezing profits. The Group aims to secure profits through energy conservation via equipment upgrades, continuous review of items used, and improvements in store productivity.

If personal information such as membership information, credit card information, and delivery information is leaked, there is a possibility of reputational risk, incident response costs, and claims for damages from victims. Both impact and likelihood are assessed as medium. The Group has implemented measures such as strict management of access rights to personal information management systems, thorough proper disposal of media, and enrollment in personal information leakage insurance.

The directly-operated store "atelier Morimoto XEX" and "CÉ LA VI TOKYO," operated by equity-method affiliate ICONIC LOCATIONS JAPAN Co., Ltd., are operated under licenses granted by third parties, and there is a possibility that the store names may become unusable upon termination of these agreements. There are concerns about a decline in net sales due to reduced brand strength and recognition. The Group is working to reduce its dependence on these store names by maintaining and strengthening relationships with licensors and enhancing the value provided as stores.

As of the end of February 2025, the balance of interest-bearing debt was ¥1,705 million, accounting for 35% of total liabilities and net assets, indicating a high degree of dependence. Some interest-bearing debt carries variable interest rates, and there is a risk that interest expenses may increase if market interest rates, which are on a rising trend, increase further. The Group is working to reduce interest-bearing debt through improvements in cash flow.