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President's Message

Tetsuro Yoshimatsu's photo

TO OUR SHAREHOLDERS

I would like to express my appreciation for your continued support and understanding of the Company.

The 22nd business term (the fiscal year ended June 30, 2021) was a period during which the market environment was extremely harsh, as evidenced by declining demand for cosmetics and the resultant increasingly conservative marketing budgets for cosmetic brands, due to reduced opportunities for people to go out and the cessation of inbound tourism caused by the spread of COVID-19.

As the Company too was significantly affected by these factors, at the beginning of the fiscal year we positioned "disposal of and withdrawal from unprofitable business" and "further strengthening of our earnings divisions (a focus on Brand Official and the strengthening of our retailing capabilities)" as priority policies that we worked on in order to improve profitability. As a result, we were able to achieve a V-shaped recovery, posting operating profit on a single monthly basis in March 2021 and on a quarterly basis in the fourth quarter.

This V-shaped recovery was demonstrated by the following:

  • a significant reduction in the deficit, mainly through the reorganization of our Global business
  • an increase in the number of brands launched under Brand Official and increased revenue from related advertising and solutions services
  • dramatic growth of approximately 140% in the E-commerce business compared with the previous fiscal year
  • a return to profitability through the improved profitability of domestic stores (excluding the flagship store)

In addition, this recovery was achieved as a result of Groupwide efforts, including the reduction of the ratio of selling, general and administrative expenses on a companywide basis.

However, the environment surrounding istyle remains unpredictable. There is still no sign of COVID-19 being contained, and the market outlook, including the recovery of demand for cosmetics, is also uncertain. In addition, the work styles of employees have changed as society has undergone major adjustments, and the concept of a "company," which is the aggregate of these components, is also experiencing drastic change.

In the 23rd business term (the fiscal year ending June 30, 2022), as in the 22nd business term, the Company group will continue to work as one in our aim to further increase our earnings capabilities and achieve increased revenue and a return to profitability by "strengthening Brand Official-related advertising and solutions services" and through "the further growth of the E-commerce business."

I greatly appreciate your ongoing support and understanding.

September 2021

Tetsuro Yoshimatsu, President and Chief Executive Officer

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