YAMAKI CO.,LTD.

Changes in work styles have led to a decline in suit-wearing, and the distinction between core dress shirts and casual shirts is becoming increasingly blurred. Furthermore, substitute items such as knit cut-and-sewn tops and T-shirts have penetrated business style, increasing the risk of being more affected by trend changes. As countermeasures, the company is actively promoting the development of new materials in cooperation with major spinning manufacturers and product planning for new work styles.

There is a risk that abnormal weather conditions—such as extreme heat, storms, typhoons, and heavy snow—during the peak demand seasons for spring/summer (April to July) and autumn/winter (October to January) could depress sales at retail customers and consumption in general. The frequency and scale of abnormal weather events are increasing due to the effects of climate change and global warming. As a countermeasure, the company is working to level out seasonal fluctuations in product demand by strengthening sales of business casual items such as knit shirts and cut-and-sewn products.

If a natural disaster such as an earthquake or typhoon occurs at the Company's own overseas factory (Laos) or during transportation, there is a risk that production and transportation will be delayed due to damage to production sites and facilities. The Group has a high dependence on overseas production, and supply disruptions directly lead to lost sales opportunities. As a countermeasure, the Company maintains a certain level of inventory and has established a system for providing substitute products in the event of delivery delays.

There is a risk that if a large volume of defective products or product liability incidents occur in overseas production, the company could suffer damage such as deterioration of its corporate image. While the company has established strict quality control standards under its quality-focused policy, maintaining quality across a broad supply chain including overseas partner factories remains an ongoing challenge. As countermeasures, the company has developed its own quality control manual, dispatches engineers to partner factories, and conducts quality verification through regular on-site inspections and online meetings.

There is a risk that product supply may be disrupted if political instability, conflict, terrorism, deteriorating security, or large-scale disasters occur at the company's own factory in Laos or at partner factories in China, Vietnam, Indonesia, and Bangladesh. Concentration of production in specific countries increases the risk of supply disruption. As a countermeasure, the company diversifies its overseas production locations across multiple countries to avoid concentration of country risk.

If a business partner goes bankrupt or experiences unexpected financial collapse, there is a risk of bad debt on accounts receivable or delays in the supply of merchandise. The company conducts regular collection of credit information using credit management services, but it may be difficult to respond to sudden changes in the business environment. As a countermeasure, the company periodically conducts portfolio analysis by a guarantee company and has concluded a comprehensive bulk-rider guarantee agreement to prepare for bad debt on accounts receivable.

Transactions with overseas factories are settled predominantly in foreign currency, so if the yen depreciates against the dollar, procurement costs will rise, creating a risk of reduced profit margins. There is also a risk that foreign exchange gains or losses will arise from the translation of foreign-currency-denominated assets based on the exchange rate at fiscal year-end. As a countermeasure, the company conducts forward foreign exchange contracts related to procurement to minimize this risk, but it states that it is impossible to completely control cost increases.

The company develops products under licensed brands, mainly for department store sales, but there is a risk that discontinuation or termination of a license agreement could halt product development under that trademark, leading to a decline in sales. Dependence on Western license brands inherently carries a business continuity risk stemming from external factors. As a countermeasure, the company is promoting a shift from Western license brands to its original brand "CHOYA," and is working to enhance brand value through department store brand corner展開...

During the COVID-19 pandemic, the issuance of states of emergency and the resulting economic downturn had a significant impact on the sales of the Company Group. There is a risk that sales could decline again should a similar infectious disease outbreak occur in the future. Infectious diseases have wide-ranging effects, causing both a sharp drop in demand and disruptions to the supply chain simultaneously. As countermeasures, the Company has established a system for flexibly activating measures based on its BCP (Business Continuity Plan), including grasping the situation across the entire Group, implementing telework and staggered commuting hours, taking infection prevention measures for employees, addressing delivery delays, and reducing expenses.