WORLD CO., LTD.

Business Details

Comprised of five sub-segments: "Apparel," "Lifestyle," and "Unique (Jewelry, Intimate, etc.)" under World Brands Co., Ltd., plus "Overseas" and "Circular" managed directly by the Company. From the first quarter of FY2027 (ending March 2027), the segment was reorganized from the former "Brand Business" into the "B2C Business." Includes newly consolidated Right-on Co., Ltd. and World Style Labels Co., Ltd., aiming to maximize brand value and profitability.

Recent Overview

Achieved higher revenue and profit driven by full contribution from two newly consolidated companies and profitability structure reform, with business profit up 13.6%.

In the first quarter of FY2027 (ending March 2027) (March to May 2026), B2C Business revenue was ¥58,106 million (up 10.4% year on year), and business profit was ¥5,015 million (up 13.6% year on year). The structural reform effects at Right-on Co., Ltd. and the full contribution from the newly consolidated World Style Labels Co., Ltd. were key drivers. In Apparel, the effects of MD reform gradually took hold but fell short of the plan. Strong sales growth in Circular supplemented this. The segment classification was changed from the former "Brand Business" to "B2C Business."

Key Products

Growth Drivers

• Expanded contribution to sales and profit from the newly consolidated Right-on Co., Ltd. and World Style Labels Co., Ltd.
• Continued sales growth in the Circular business and increasingly visible profit contribution
• Progress in profitability structure reform through MD reform and strengthened full-price sales in Apparel
• Continued improvement in profitability of existing Lifestyle businesses and ongoing growth investment
• Building of overseas business foundations in Thailand, Taiwan, Hong Kong, and Malaysia and exploration of new expansion opportunities
• Reduced dependence on Apparel through growth expansion in non-apparel areas (Unique, Circular, Overseas)

Risks

• Risk of delayed profitability structural transformation as MD reform effects in Apparel brands have fallen short of the plan
• Risk of prolonged PMI and rising integration costs for the two newly consolidated companies (Right-on Co., Ltd. and World Style Labels Co., Ltd.)
• Continued challenges in both quantity and quality of merchandise assortment during the seasonal transition period (late summer to early autumn)
• Pressure of declining sales volume due to the maturing domestic apparel market and population decline
• Increased procurement costs due to rising processing fees at overseas production sites and sharp exchange rate fluctuations
• Risk of profit reduction due to occurrence of impairment losses

Business Details

From the first quarter of FY2027 (ending March 2027), the reportable segments were fundamentally revised, abolishing the former three-way classification of "Brand Business," "Digital Business," and "Platform Business." These were reorganized into three new categories: "B2C Business," "B2B Business," and "Common/Corporate." The B2B solutions functions of the former Digital Business (contracted EC operations, digital solutions, inventory management systems, etc.) were integrated into the Technology Segment of the B2B Business, while the Circular business was integrated into the Circular sub-segment of the B2C Business.

Recent Overview

The Digital Business segment was abolished due to segment reorganization. The B2B Business achieved higher revenue and substantially higher profit.

From the first quarter of FY2027 (ending March 2027), the "Digital Business" segment was abolished, and its functions were reorganized and integrated into the B2B Business (Technology, Supply Chain, Human Resources Operations) and the B2C Business (Circular). The newly classified B2B Business posted revenue of ¥24,523 million (up 4.6% year on year) and business profit of ¥1,849 million (up 31.1% year on year), representing higher revenue and substantially higher profit. External revenue was ¥17,969 million, down 2.7% year on year, but external sales expansion at MC Fashion Co., Ltd. and expansion of sales agency operations in Human Resources Operations drove profit.

Key Products

Growth Drivers

• External sales expansion in the Supply Chain Segment by MC Fashion Co., Ltd. (a key driver of B2B Business profit)
• Revenue expansion mainly through sales agency operations in the Human Resources Operations Segment
• Service improvements in the Technology Segment and enhanced solution proposals combining multiple services
• Sales growth in the Circular sub-segment within the B2C Business (continued growth of the former B2C neo-economy functions)
• Accumulation of successful cases of cross-segment proposal-based sales under the new medium-term management plan "VISION-W" and expansion of a reproducible sales foundation

Risks

• External revenue in the B2B Business declined 2.7% year on year, indicating challenges remain in expanding external sales
• Risk that segment reorganization makes performance comparison with the former Digital Business difficult, complicating ongoing monitoring by investors
• Risk of increased costs from upfront investment (system development, logistics infrastructure) aimed at expanding B2B external sales
• Intensifying competition from competitors, companies in other industries, and foreign-affiliated companies amid ongoing digitalization
• Continued risk of shrinking consolidated profit contribution from entities such as the former Laxus Technologies Inc. (equity-method affiliate)

Business Details

Comprised of three sub-segments under World Solutions Co., Ltd.: "Supply Chain," "Technology," and "Human Resources Operations." Provides OEM/ODM proposals leveraging procurement, production, and logistics functions, digital solutions such as contracted EC operations, inventory management, and core systems, and services such as sales agency operations, store development, and training to both group and external client companies. Under the new medium-term management plan "VISION-W," the Company is advancing business expansion through resolving customer challenges and strengthening cross-segment solution proposals.

Recent Overview

Achieved double-digit profit growth driven by external sales expansion at MC Fashion Co., Ltd. and revenue growth in Human Resources Operations.

In the first quarter of FY2027 (ending March 2027) (March 1, 2026 to May 31, 2026), B2B Business revenue was ¥24,523 million (up 4.6% year on year) and business profit was ¥1,849 million (up 31.1% year on year), representing higher revenue and profit. Steady external sales expansion at MC Fashion Co., Ltd. drove overall profit, and Human Resources Operations also grew revenue mainly through sales agency operations. External revenue was ¥17,969 million, down 2.7% year on year, but overall revenue increased due to expansion of inter-segment revenue. Note that the segment classification was changed this period from the former "Platform Business" and others to "B2B Business."

Key Products

Growth Drivers

• Steady external sales expansion by MC Fashion Co., Ltd. driving profit in the Supply Chain Segment
• External sales expansion mainly through sales agency operations in the Human Resources Operations Segment
• Strengthened cross-segment solution proposals combining multiple services tailored to individual customer challenges
• Expansion of a reproducible sales foundation through strengthened sales structure, expanded proposal scope, and visualization of order-taking activities
• Service improvements and external sales expansion of digital solutions in the Technology Segment
• Strengthening of human capital through personnel rotation and reskilling from the B2C Business to the B2B Business

Risks

• Risk from continued reliance on internal sales, with inter-segment revenue of ¥6,554 million against external revenue of ¥17,969 million, exposing the business to declines in intra-group demand
• Risk of increased procurement costs due to exchange rate fluctuations (affecting the Supply Chain Segment with its high overseas production ratio)
• Risk of declining intra-group demand (internal sales) due to the maturing and shrinking domestic apparel market
• Risk of delayed PMI (integration process) or cost overruns for companies newly consolidated through M&A
• Risk of slowing growth if the accumulation of successful cross-segment solution proposal cases does not progress as planned
• Risk of delayed expansion of the sales foundation if talent development and recruitment do not proceed as planned