ENVALITH
株式会社文教堂グループホールディングス logo

BUNKYODO GROUP HOLDINGS CO.,LTD.

9978・Standard Market・Retail Trade

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株式会社文教堂グループホールディングス logo
BUNKYODO GROUP HOLDINGS CO.,LTD.9978

Business

Bunkyodo Group Holdings Co., Ltd. is a holding company centered on a bookstore chain founded in 1949. Through its consolidated subsidiaries Bunkyodo Co., Ltd., J-Book Co., Ltd., and Bunkyodo Service Co., Ltd., the company operates two segments: retail sales (sales business) of books, magazines, stationery, and general merchandise, and an education platform business offering programming classes and brain-activation classes for seniors, among others. Its main customers are general consumers, and it operates stores nationwide, mainly in the greater Tokyo metropolitan area. Business rehabilitation ADR proceedings were established in September 2019, and the company continues to pursue business restructuring based on that plan. It is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

In its retail business, which accounts for over 99% of net sales, the company sells books (43.8% of sales composition), magazines (29.6%), stationery (13.6%), and other items (12.4%) through in-store retail, and also conducts wholesale sales to franchisees. Procurement is carried out through Booksellers & Company and Nippon Shuppan Hanbai Co., Ltd., among others, with efforts to improve the gross margin by expanding the outright purchase (non-returnable) method. In the education platform business, the company earns tuition revenue, and also records incentive payment income from publishers. It utilizes multiple franchise agreements (Gashapon capsule toys, trading cards, etc.) to enhance customer traffic and profitability.

Company Strengths

The stationery and general merchandise segment continued to exceed the previous year's same-month sales at existing stores for 36 consecutive months, despite the impact of rising unit prices for merchandise. In FY2025 (ended August 2025), stationery sales reached ¥1,967 million (108.7% year-on-year), underpinning overall company earnings as the sole growth category, with purchasing volume also on an expansionary trend at 111.3% year-on-year.

The company has concluded business alliances with Maruzen Junkudo Co., Ltd. (store operation know-how and POS system integration), Dai Nippon Printing Co., Ltd. (honto membership acquisition and purchase data utilization), and Nippon Shuppan Hanbai Co., Ltd. (joint research on multi-category products and private-brand product development). This collaborative framework with major industry players is contributing to strengthening merchandise procurement capabilities and the customer base.

In December 2024, the company jointly developed the "Gakken Nou Genki Salon" (a brain-activation classroom for seniors) with Gakken and opened it at the Minami-Osawa store. Around the same time, it joined the trading card franchise of Culture Experience and opened specialty corners at three stores: Hakodate Showa, Akiruno, and Minami-Osawa. Both the number of users and sales are on an expansionary trend.

ENVALITH's Perspective

In the previous consolidated fiscal year, the company recorded a net loss attributable to owners of the parent, and the situation in which long-term agreement with its financial institutions has not been reached continues. As of the end of Q3 FY2026 (ending August 2026), interest-bearing debt is heavily concentrated in current liabilities, with short-term borrowings of ¥2,128 million and current portion of long-term borrowings of ¥1,768 million, and liquidity risk remains high. Unless the note regarding material uncertainty about the going concern assumption is resolved, this will remain the most significant negative factor for investment decisions.

Against cumulative Q1-Q3 FY2026 (ending August 2026) operating profit of ¥98 million (9 months), the full-year forecast of ¥40 million implies an operating loss in Q4 alone (a loss of approximately ¥58 million). A deteriorating cost environment—continued shrinkage of the paper publication market, elevated labor costs due to minimum wage hikes, rising logistics costs, and higher rents—is expected to weigh on second-half performance as an external factor. The full-year sales forecast of ¥14,000 million (down 3.2% year on year) indicates a fifth consecutive year of declining sales.

Strong performance in the stationery, general merchandise, and trading card segments helped secure a slight 0.6% year-on-year increase in cumulative Q1-Q3 sales. However, structural industry-wide challenges persist as market conditions, including the maturing e-publishing market, the ongoing contraction of the paper publication market, declining bookstore numbers, and high return rates, continue. It remains unclear whether growth in new product categories can fully offset the decline in book and magazine sales. Interest expenses increased from ¥45 million in the same period last year to ¥60 million, and rising financial costs are also weighing on earnings.

Growth Strategy

Restructuring of the earnings structure through expansion of high-margin merchandise, integration of the education business, and consolidation of unprofitable stores

Opened 4 new stores in the cumulative third quarter, building a network of 7 stores in total. Both new and used goods are on an expanding trend. In July 2026, a Suruga-ya buyback center is scheduled to open at the Mizonokuchi Main Store, and a Suruga-ya co-located outlet is planned to open at the new Sapporo DUO store, with the recycle shop FC franchise being nurtured as a new pillar of earnings.

From April to June 2026, 4 stores were closed—Tachibana, Sumido, CA Bunkyodo Aoyama-itchome, and Tateba—and in July, 2 more stores, Mobara and Nakano-sakaue, are scheduled to close. Meanwhile, the company is working to strengthen the competitiveness of existing stores through measures such as adding a new stationery corner at the Yokosuka MORE'S store and a full renewal reopening of the Mizonokuchi Ekimae store (planned for August 2026).

Sales in the stationery and general merchandise segment have continuously exceeded the same-month sales of the previous consolidated fiscal year. Increased book procurement from Booksellers & Company and continuation of the outright-purchase method for magazines have improved demand forecasting accuracy, resulting in an improved gross margin. Cumulative gross profit for the third quarter was ¥3,324 million, an increase of ¥117 million year on year.

The number of users of the brain-activation classroom for seniors, "Gakken Nou-Genki Salon," jointly developed with Gakken, is steadily increasing. Through the rollout of community-based classrooms such as the "Dementia Supporter Training Course," the company is pursuing both increased bookstore foot traffic and monetization of the classroom business simultaneously. The programming school "HALLO" continues to see a slowing trend in new student enrollments due to slowing spending amid rising prices.

Amid sustained high labor costs driven by minimum wage increases, the company aims to optimize labor costs through the introduction of self-checkout registers and unmanned operation at some stores. It continues to pursue cost optimization through reviewing business processes, promoting digitalization, reassessing logistics conditions, and reviewing transaction terms.

Last updated: July 17, 2026