UNITED ARROWS LTD.

Business Details

A single segment engaged primarily in the planning and sale of men's and women's apparel and related products. The group operates multiple brands targeting the trend market and mid-trend market, with "UNITED ARROWS," "BEAUTY&YOUTH UNITED ARROWS," and "green label relaxing" as its core brands. As of the end of FY2026 (ending March 2026), the group operated 273 stores overall (excluding Coen Co., Ltd.). Overseas expansion into Taiwan and China is also being pursued.

Recent Overview

Achieved increased revenue and profit in the final year of the medium-term management plan; completed transfer of Coen and resolved to move to a holding company structure

In FY2026 (ending March 2026), the company achieved increased revenue and profit in the final year of its medium-term management plan, with net sales of ¥164,603 million (up 9.1% year on year) and operating income of ¥9,126 million (up 14.3% year on year). Gross margin improved by 0.3 points to 52.4%. The company completed the transfer of all shares of Coen Co., Ltd. to G-ZET Co., Ltd. effective March 2, 2026, and removed it from consolidation. Although the company recorded ¥1,974 million in extraordinary losses, including a loss on sale of shares of affiliated companies, net income surged 42.7% year on year to ¥6,112 million due to the tax deductibility effect. At the Board of Directors meeting on May 11, 2026, the company resolved to transition to a holding company structure (via absorption-type company split) effective October 1, 2026, and plans to change its company name to "TABAYA Holdings Co., Ltd." Under the new medium-term management plan for 2026-2028, the company targets consolidated net sales of ¥185,000 million to ¥195,000 million and operating income of ¥11,500 million to ¥12,500 million for FY2029 (ending March 2029).

Key Products

Growth Drivers

• Continued growth in existing store sales: existing store sales for standalone retail plus online sales rose 6.8% year on year (FY2026 (ending March 2026)), driven by structural transformation through MD evolution premised on climate change and reduced reliance on winter outerwear
• Improvement in gross margin: achieved a gross margin of 52.4% (up 0.3 points year on year) through continued price increases and refined pricing in line with improved product quality
• Deepening of OMO initiatives: UA Club member sales grew by double digits year on year, with steady growth in the number of active members and the proportion of repeat purchasers, strengthening the customer base
• Expansion of global operations: opened a second store in Shenzhen, China, a 15th store in Taiwan, and a second franchise store in Thailand; launched the cross-border e-commerce site "UNITED ARROWS Global Online"
• Expansion into new format and lifestyle areas: expanded customer base through brick-and-mortar rollout of new format brands such as OSOI and NICE WEATHER
• M&A and business diversification through holding company transition: the transition to a holding company structure in October 2026 will accelerate expansion into lifestyle areas beyond apparel and M&A activity
• Supply chain optimization: began centralized management of product cost information, improving inventory allocation accuracy to reduce lost sales opportunities and logistics costs
• New medium-term management plan 2026-2028: targeting net sales of ¥185,000 million to ¥195,000 million and ROE of 14.3% to 15.7% for FY2029 (ending March 2029), pursuing a high-sensitivity, high-value-added strategy

Risks

• Climate change and temperature variation risk: prolonged summers, mild winters, and other increasingly normalized climate changes affecting sales opportunities for seasonal products (requiring continuous MD revisions)
• Cost increase risk: rising procurement costs due to continued yen depreciation, increased personnel costs from wage hikes and staff increases, and higher depreciation and system amortization costs associated with store openings and head office relocation
• Risk of downturn in consumer sentiment: impact on personal consumption from continued price increases, and uncertainty stemming from US trade policy, Middle East conditions, and financial and capital market fluctuations
• Intensifying competitive environment: chronic labor shortages in the apparel retail industry, competition with fast fashion, and fluctuations in inbound demand
• Holding company transition and organizational restructuring risk: changes in business continuity and governance structure associated with the absorption-type company split and transition to a holding company structure in October 2026, and goodwill impairment risk associated with M&A execution
• Overseas business expansion risk: geopolitical risk, local regulatory risk, and foreign exchange risk associated with store expansion in China, Taiwan, Thailand, and other markets
• Cash flow deterioration risk: operating cash flow of ¥5,551 million in FY2026 (ending March 2026) (down ¥1,546 million year on year) and investing cash flow of ¥(9,626) million (up ¥3,386 million in spending year on year), resulting in cash and cash equivalents declining to ¥3,445 million