WORKMAN CO.,LTD.

Many of the products handled are manufactured in China and ASEAN countries, and there is a risk that fluctuations in the political and economic situation in these regions or the spread of infectious diseases could disrupt the stable supply of products. While the Company intends to pursue alternative procurement sources, delays in procurement could result in lost sales opportunities and increased procurement costs, which may affect business performance.

The Company operates its chain mainly through franchise agreements with individuals. If sluggish sales at individual stores due to changes in the economic environment or intensified competition lead to a decline in the number of prospective franchisees or those wishing to continue their contracts, the Company may be forced to expand directly managed operations by employees (Training Stores), leading to an increase in personnel expenses and other costs, which may affect business performance.

In the event of a large-scale natural disaster such as an earthquake, infrastructure paralysis could degrade information and logistics functions, and distribution centers and store facilities could be damaged. The resulting recovery costs and suspension of store operations may affect business performance.

The products handled include seasonal items and rainwear whose sales volumes are significantly affected by weather conditions. There is a risk that demand may decline in the event of abnormal weather such as a cool summer, warm winter, or a rainy season with little rainfall. The resulting decline in sales and occurrence of excess inventory may affect business performance.

Outdoor, sports, and casual products are more susceptible to short-term changes in trends and individual preferences compared to professional-use products. If such trend changes occur, they may lead to increased inventory, decreased product demand, and increased discount sales, which may affect business performance.

PB (Private Brand) Products, which account for 71.9% of total chain store sales, are generally procured directly from overseas. There is a risk that purchase prices may rise due to a greater-than-expected depreciation of the yen, sharp increases in raw material prices, or rising ocean freight costs. Although the Company implements foreign exchange risk avoidance measures through forward contracts and reviews its trade-on/trade-off and production management systems, complete avoidance cannot be guaranteed, and if such cost increases cannot be fully absorbed, they may affect business performance.

There is a risk that unauthorized access to core systems such as sales and accounting systems, or cyberattacks via computer viruses, could result in information leaks or system malfunctions. In addition to the Company's own security measures, a dual management system has been established across the entire Beisia Group, and the Company has also taken out cyber protection insurance. However, if damage occurs despite these measures, it may affect business performance.