TOP CULTURE Co.,Ltd.

Business Details

Operates large-format multi-category retail stores under the "TSUTAYA BOOKSTORE" brand, consolidating books, specially selected goods, stationery, CD/DVD sales, and rental services within a single storefront. Under the concept of "providing everyday entertainment," the segment promotes value creation through book-centric cross-category offerings (books × X). Real estate leasing income is also one of its revenue sources. Effective April 1, 2026, the company made Meibundo Co., Ltd. (which succeeded to a bookstore operation business of 9 stores via a company split from Meibundo Planner) a consolidated subsidiary, strengthening its store-opening foundation in the Hokuriku region.

Recent Overview

Succeeded to 9 Meibundo stores, expanding into the Hokuriku region; segment turned profitable in the interim period.

Effective April 1, 2026, the company succeeded to a bookstore operation business of 9 stores (in Toyama, Ishikawa, and Saitama) from Meibundo Planner Co., Ltd. via a company split, making Meibundo Co., Ltd. a newly consolidated subsidiary. As a result, the number of stores in the TSUTAYA BOOKSTORE Business increased to 44 (107 stores group-wide). Segment sales for the current interim period were ¥8,337 million (99.5% year-on-year), a slight decline, but thanks to thorough cost management that reduced selling, general and administrative expenses, segment profit turned positive at ¥39 million, up from a loss of ¥191 million in the same period of the prior year. In connection with the Meibundo succession, the company recorded a gain on bargain purchase of ¥748 million as extraordinary income. As a subsequent event, the company transferred real estate (land and buildings) of a store in Chuo-ku, Niigata City effective May 29, 2026, and plans to record an estimated gain on transfer of approximately ¥440 million as extraordinary income in FY2026 (ending October 2026).

Key Products

Growth Drivers

• Strengthening the store-opening foundation and expanding scale in the Hokuriku region (Toyama, Ishikawa) through the business succession of Meibundo Co., Ltd.
• Creating store-visit motivation and dwell-time value through book × X combined offerings (DAISO, Rakuten Mobile, amusement, pop-up shops, etc.)
• Differentiating the book sales floor through enhanced "book gifting" proposals and original promotions/fairs
• Generating sales through real-and-online co-creation via stable maintenance of EC sales
• Expanding the rollout of Kaitori Daikichi (new business) (opened at MORIOKA TSUTAYA in November 2025 and at TSUTAYA BOOKSTORE Koide store in April 2026)
• Improving the profit structure through thorough cost management and reduction of selling, general and administrative expenses

Risks

• Structural sales decline due to digitalization of CDs, DVDs, and rental services (rental down to 76.5% year-on-year, DVD sales down to 65.6%)
• Risk of shrinking sales scale due to year-on-year decline in book sales (96.1%) and a decrease in store count
• Increasing caution in personal consumption due to price increases and stagnant real wages
• Rising store operating costs due to increases in labor and logistics costs
• Increased costs associated with store closures and renovations (renovation costs for stores of the newly consolidated subsidiary are also expected to arise going forward)
• Risk that profitability improvement at stores succeeded from Meibundo does not proceed as planned (allocation of acquisition cost is still under provisional treatment)
• Fragile financial base, with an equity ratio of 8.3% (net assets per share of -¥43.92)
• Full-year earnings forecast undetermined, creating uncertainty regarding second-half performance