STUDIO ATAO Co., Ltd.

Business Details

Under the management philosophy of "Bringing Entertainment to Fashion," the company operates four brands: ATAO, IANNE, ILEMER, and StrawberryMe. Centered on the planning and sale of original bags and wallets, the company promotes an OMO strategy combining directly-operated store sales with internet sales through ATAOLAND+, Rakuten, Yahoo!, and other channels. The company has continued to expand its store network, including the opening of a new ATAO Abeno Harukas store in April 2026 and the expansion and relocation of the IANNE brand's flagship store to Hibiya Chanter.

Recent Overview

In-store sales increased due to the effect of new store openings; net income improved significantly, up 25.1% year-on-year

In the first quarter of FY2027 (ending February 2027) (March to May 2026), net sales were only slightly up at ¥1,071 million (up 0.3% year-on-year). By channel, internet sales came to ¥526 million (down 6.5% year-on-year) due to a decline following the prior period's major hit product "Block Party Shangri-La Pink," while in-store sales grew to ¥544 million (up 8.1% year-on-year) due to the opening of the new ATAO Abeno Harukas and ILEMER Shinjuku stores and an increase in existing store sales. The cost of sales ratio improved (from 32.0% in the same quarter of the prior year to 29.0% in the current quarter) due to a decrease in inventory valuation losses and other factors, and net income for the quarter improved significantly to ¥64 million (up 25.1% year-on-year). There is no change to the full-year earnings forecast (net sales of ¥4,500 million, operating profit of ¥330 million), and the first-quarter progress rate was 23.8% for net sales and 28.1% for operating profit.

Key Products

Growth Drivers

• Expansion of in-store sales through the opening of the new ATAO Abeno Harukas store (April 2026) and ILEMER Shinjuku store (April 2026), and the expansion and relocation of "ILEMER TOKYO avec le IANNE" to the 1st floor of Hibiya Chanter
• Strengthening of OMO integration between physical stores and e-commerce and improved advertising effectiveness through the expansion of ATAOLAND+, the ATAO Rakuten Ichiba branch store, and the ATAO Yahoo! store
• Attracting new customers, male customers, and younger demographics through the launch of new products such as the "SAFARILAND Series," "Block Party Candy Mix," and "SAFARILAND Classic Chess"
• Overall brand uplift driven by strong performance of the IANNE brand's "Graffiti Series" apparel-related goods
• Expanded brand recognition for ILEMER driven by favorable reception of the Little Twin Stars 50th anniversary collaboration items and the brand's 10th anniversary limited Happy Doll
• Improved cost of sales ratio due to a decrease in inventory valuation losses and other factors (gross profit margin: 68.0% in the same quarter of the prior year to 71.0% in the current quarter)

Risks

• Since the intellectual property rights and customer information of the former e-commerce site belong to the outsourced operator, the ongoing issue of customer confusion caused by similar brands persists, requiring continued active investment in sales promotion expenses to re-expand internet sales
• Risk of a rebound decline following the prior period's major hit product (internet sales were down 6.5% year-on-year in the current first quarter)
• Risk of profit pressure due to temporary costs associated with new store openings and store relocations
• Risk of rising material and procurement costs due to the continued depreciation of the yen
• Risks related to changes in fashion trends and maintaining brand strength
• Risk of sales concentration on specific business partners, such as Daimaru Matsuzakaya Department Stores Co., Ltd.
• Risk of earnings volatility due to fluctuations in the effectiveness of promotional strategies for internet sales