ESTELLE HOLDINGS CO.,LTD.

There is a risk that the spread of mutant viruses or new infectious diseases could result in states of emergency or developer decisions causing many stores to be unable to operate for extended periods. Even after operations resume, economic slowdown and sluggish personal consumption may continue, potentially having a significant impact on business performance. The company aims to build a business structure resilient to economic conditions through high-quality products and the best hospitality.

Natural disasters such as earthquakes and typhoons, increased national burden associated with the declining birthrate and aging population, and geopolitical risks may affect the global economy, causing significant economic fluctuations. The Group, centered on the Jewelry business, is highly susceptible to economic conditions, and its operating results can be significantly affected by external factors. The company is responding by providing high-quality, highly reliable products and the best hospitality.

There is a risk that the spread of internet sales and changes in consumption styles brought about by COVID-19 could significantly transform the conventional retail business model centered on face-to-face sales. As e-commerce expansion progresses, the advantage of in-store sales may decline. The company plans to respond by enhancing sales staff capabilities to provide added value, and by focusing on internet sales to create synergy with in-store sales.

The Group's production bases are concentrated in Vietnam, and geopolitical risks, lockdowns due to infectious diseases, domestic economic instability, and unstable power supply may give rise to unforeseen events such as conflicts, strikes, or power outages. If production activities are significantly disrupted for an extended period, this could have a material impact on business results. The company is considering measures to address this by balancing suppliers outside the Group.

Precious metal bullion such as gold and platinum, and precious stones including diamonds, which are the main raw materials for the Jewelry business, are constantly exposed to market price fluctuation risk. If there are significant market fluctuations, it may be difficult to promptly reflect these in selling prices, potentially affecting business results. The securities report does not specify concrete hedging measures or other countermeasures.

Raw materials such as precious metal bullion and diamonds are exposed to foreign exchange fluctuation risk, and if there are significant exchange rate fluctuations, it becomes difficult to promptly pass these on to selling prices. In particular, in overseas transactions including production activities in Vietnam, yen depreciation and fluctuations in local currencies may push up procurement costs. The securities report does not specify concrete hedging measures or other countermeasures.

The company holds personal information obtained from customers in retail sales, and if an information leak occurs due to unforeseen factors, it could lead not only to the occurrence of damages but also to a loss of social credibility, potentially affecting business results. The company conducts strict management through the establishment of internal systems, ensuring the security of information infrastructure, and providing employee training.