VALOR HOLDINGS CO.,LTD.

Business Details

The segment is centered on Valor Co., Ltd. and comprises multiple SM subsidiaries and food processing subsidiaries. Its strength lies in a "manufacturing retail business" model that vertically integrates procurement, manufacturing, logistics, and sales, and it pursues a "destination store" strategy centered on fresh food, prepared meals, bakery items, and similar categories. In November 2025, the company made Domy Co., Ltd. a wholly owned subsidiary, accelerating store openings in the Kanto and Kansai areas. This is the core segment, accounting for approximately 58.5% of the group's total operating revenue.

Recent Overview

The SM business drove 31 consecutive years of revenue growth; Domy consolidation brought the store count to 364

In the SM business for FY2026 (ending March 2026), operating revenue was ¥540,761 million (up 11.9% year on year) and operating profit was ¥22,123 million (up 13.6% year on year), representing increases in both revenue and profit. Total sales at all Valor Co., Ltd. stores performed strongly, rising 10.2% year on year. In November 2025, Domy Co., Ltd. was made a wholly owned subsidiary, adding 32 stores; combined with 12 new store openings and 5 closures, the group's total store count expanded to 364. Geographic expansion into the Kanto and Kansai areas also progressed, with "SM Valor Yokohama Shimonagaya", the first store in the Kanto region, winning an industry award. Although SG&A expenses increased, driven mainly by personnel and facility costs, this was absorbed by the increase in gross operating profit.

Key Products

Growth Drivers

• Deepening dominance in the Kansai area (expanding the SM group, including Shiga Prefecture, to a total of 52 stores and approximately ¥75.0 billion in sales) and accelerating store openings in the Kanto area (2nd and 3rd stores in preparation)
• Incorporation of Domy Co., Ltd.'s 32 stores in the Mikawa region through its full consolidation (November 2025) and introduction of the manufacturing retail model and private brand products
• Enhanced product competitiveness through the vertically integrated manufacturing retail model (destination store strategy centered on fresh food, prepared meals, bakery items, fresh fruit desserts, etc.)
• Improved quality and cost control achieved simultaneously through manufacturing infrastructure development such as the Valor Dessert Center and the Hokuo Club Ena Plant
• Strengthened capacity to support new store openings through logistics infrastructure development (operation of the Hirakata Logistics Center and the Nagoya Minato Dry Logistics Center)
• Capital and business alliance with Kaneko Shoji Co., Ltd. (basic agreement in February 2026) to complement store site coordination and customer acquisition in new areas

Risks

• Continued cost increases in personnel expenses, utilities, and rent sustain upward pressure on SG&A expenses
• Downward pressure on customer spend and purchase volume due to heightened consumer thrift and defensive spending awareness
• Intensifying competition across industry categories and formats (competition with drugstores, discount stores, etc.)
• Initial investment burden associated with accelerated store openings in the Kansai and Kanto areas, and a time lag before new stores become profitable
• Rising financial costs due to higher interest rates and increased interest-bearing debt (non-operating expenses up 28.4% year on year)
• Risk of impairment losses on fixed assets (the group as a whole recognized impairment losses of ¥3,454 million in the fiscal year under review)