Matsuya Co., LTD.

The Group has a high proportion of inbound sales, and disruption to international order caused by war, political conflict, and other factors could lead to supply chain fragmentation or a decrease/loss of inbound demand, potentially affecting business performance. As countermeasures, the Group is working to mitigate risks specific to particular regions through the development of real estate-related businesses, expansion of domestic regional co-creation businesses, and restructuring of its overseas customer portfolio.

Demand in the department store and food & beverage businesses is affected by economic conditions such as domestic and overseas business trends, consumption trends, and stock market conditions, as well as changes in cost structure due to rising labor costs and prices. These fluctuations could directly pressure the Group's sales and earnings, and the Group aims for sustainable growth by formulating and executing management plans that flexibly respond to changes in the environment.

Changes in market structure due to population decline, the advance of the falling birthrate and aging population, changes in consumer preferences and behavior, and the emergence of new businesses could affect the performance of the mainstay Department Store Business. As countermeasures, the Group is promoting the evolution of its department store business model through the creation of sales floors unbound by conventional frameworks, strengthening of CRM, and construction of an Omnichannel Platform.

Further expansion of the e-commerce market and the spread of sales methods utilizing digital technology could affect the sales of the Department Store Business, which is centered on store sales. There is also a risk that delayed response to rapid digitalization could lead to a decline in competitiveness. The Group is working to expand digital touchpoints and increase customer LTV (lifetime value) through the construction of an Omnichannel Platform.

If efforts to address social issues such as climate change and respect for human rights are insufficient, disasters caused by climate change could disrupt the supply chain and make it difficult to continue store operations, potentially affecting business performance. The Group is promoting reductions in greenhouse gas emissions through endorsement of and disclosure in line with TCFD recommendations, energy-saving measures (such as conversion to LED lighting), and the phased introduction of renewable energy.

Against the backdrop of a declining working population and increasing labor mobility, difficulty in acquiring personnel with high skills, specialized knowledge, and a hospitality mindset, or the loss of existing personnel, could lead to a decline in the quality of products and services, damage to brand value, and difficulty achieving management targets. There is also a possibility that increased recruitment and training costs could have a material impact on earnings, and the Group is responding through improvements to treatment and systems and strengthening investment in human capital.

Fixed assets such as stores, real estate, and goodwill may require the recognition of impairment losses in the event of deteriorating operating income, a significant decline in market prices, or damage caused by a large-scale natural disaster, which could have a material impact on financial position and business results. In addition, held shares carry the risk of valuation losses due to a sharp decline in the stock market or deterioration in the business condition of investee companies, and the Group responds by grasping fair value on a quarterly basis and continuously reviewing its shareholdings.

As the Group relies on financial institutions such as banks for working capital and investment funds, instability in financial markets, rising interest rates, or deteriorating business performance could increase fund procurement costs or make timely procurement difficult. The Group strives to secure stable fund procurement by strengthening its financial position and researching diverse fundraising methods such as asset finance.

In the event of large-scale natural disasters such as earthquakes or wind and flood damage, the spread of infectious diseases, acts of terrorism, fires, or other incidents, the Department Store and Food & Beverage Businesses could experience voluntary suspension of store operations or a decrease in domestic and overseas demand, potentially affecting financial position and business results. In particular, large-scale disasters such as a major earthquake directly beneath the capital are expected to have a serious impact, and the Group responds through the establishment of a crisis management committee, development of business continuity plans, and enrollment in various types of insurance.

In the event of equipment damage, system outages, or leakage of confidential information due to cyberattacks or unauthorized intrusion, or leakage of customers' personal information due to unforeseen accidents or fraudulent acts, business performance could be affected through disruption to business activities, damage to credibility, decreased sales, and the incurrence of damage compensation costs. The Group responds through a multi-layered security approach combining technical, physical, and human measures, and by operating a strict management system based on its personal information protection policy.