J. Front Retailing Co., Ltd. · TSE:3086
J. Front Retailing — Investor Presentation (July 2023)
49 slides from J. Front Retailing's investor presentation, Jul 25, 2023
Slide 1: J. Front Retailing IR Business Strategy Presentation
J. Front Retailing IR Business Strategy Presentation July 25, 2023
Slide 2: Today's Agenda
Today’s Agenda ■Strategy of SC (Parco) Business ～Direction for the Medium to Long Term～ KAWASE Kenji Representative Director, President and Executive Officer Parco Co., Ltd. ■GINZA SIX Initiatives & Results ～Direction of Department Store Based on the Achievements of GINZA SIX～ NISHISAKA Yoshiharu Ma
Slide 3: Strategy of SC (Parco) Business
Strategy of SC (Parco) Business ～ Direction for the Medium to Long Term ～ KAWASE Kenji Representative Director, President and Executive Officer Parco Co., Ltd. 1
Slide 4: Agenda: Direction for the Medium to Long Term
Agenda ＜ Direction for the Medium to Long Term ＞ 1. Evolution from Origin (1) Purpose of Parco (2) History and Medium- to Long-Term Perspective 2. Current Store Business 3. Direction (1) Reconstruction of Store Strategy (2) Initiatives in Content Area (3) Collaboration in the JFR Group 2
Slide 5: Agenda: Direction for the Medium to Long Term
Agenda ＜ Direction for the Medium to Long Term ＞ 1. Evolution from Origin (1) Purpose of Parco (2) History and Medium- to Long-Term Perspective 2. Current Store Business 3. Direction (1) Reconstruction of Store Strategy (2) Initiatives in Content Area (3) Collaboration in the JFR Group 3
Slide 6: Purpose of Parco: Vision and Purpose
1. Evolution from Origin (1) Purpose of Parco VISION Excite, Design, and Create to change the world with excitement beyond imagination PURPOSE Change the World with Sensibility to forge a new era 4
Slide 7: History and Medium- to Long-Term Perspective
1. Evolution from Origin (2) History and Medium- to Long-Term Perspective History (Career) 15 years at Parco Co., Ltd., 15 years at the Group companies ● Launch of new businesses and JV projects and business management at Parco and the Group companies ● Management of Parco Digital Marketing Co., Ltd
Slide 8: Agenda: Direction for the Medium to Long Term
Agenda ＜ Direction for the Medium to Long Term ＞ 1. Evolution from Origin (1) Purpose of Parco (2) History and Medium- to Long-Term Perspective 2. Current Store Business 3. Direction (1) Reconstruction of Store Strategy (2) Initiatives in Content Area (3) Collaboration in the JFR Group 6
Slide 9: Current Store Business
2. Current Store Business Customer traffic and transaction volume: Recovered to FY2019 levels - Demonstrate true potential of Shibuya and Shinsaibashi, attract more customers through expansion of IP content and attract foreign tourists to Japan Operating revenue: Recovery lagging behind transaction
Slide 10: Current Store Business
2. Current Store Business Growth in IP content and the number of foreign tourists to Japan drove customer traffic and transaction volume Shibuya PARCO is globally popular and has established its position ● Growth in transaction volume was highest among all stores, 133% YoY in FY2022, 162% YoY in Q1
Slide 11: Current Store Business
2. Current Store Business Ikebukuro PARCO ●Improvement of the value provided by the building and tenant replacement have led to significant growth in transaction volume at present Nagoya PARCO: Item structure transformation in progress ●Transformation of the value provided through large-scale renova
Slide 12: Agenda: Direction for the Medium to Long Term
Agenda ＜ Direction for the Medium to Long Term ＞ 1. Evolution from Origin (1) Purpose of Parco (2) History and Medium- to Long-Term Perspective 2. Current Store Business 3. Direction (1) Reconstruction of Store Strategy (2) Initiatives in Content Area (3) Collaboration in the JFR Group 10
Slide 13: Store Strategy
3. Direction (1) Reconstruction of Store Strategy ＜Store strategy＞ ●Earnings recovery by renovating floor layouts, including introduction of IP content - Introduce entertainment and cultural content, which are popular in Shibuya and Shinsaibashi, to each store Implemented: Ikebukuro, Sapporo, Sendai
Slide 14: Expansion from foreign tourists to global dissemination
3. Direction (1) Reconstruction of Store Strategy Expansion from the capture of foreign tourists to Japan to “global” dissemination ● Inbound transaction volume: FY2022 (full year) 6.0 billion yen FY2023 (Mar - Jun) 6.1 billion yen (up 358% vs. 2019) ● “Global” dissemination using digital technology
Slide 15: Initiatives in Content Area
3. Direction (2) Initiatives in Content Area 1. Expand directly managed businesses through discovery and cultivation of content ● Develop topical original products and produce exhibitions (directly managed businesses) e.g. Original exhibition (Oshi no Ko Exhibition), original product development, sa
Slide 16: Initiatives in Content Area
3. Direction (2) Initiatives in Content Area 1. Cultivate the Generation Z community and create a market for esports business ● Collaborate with the professional esports team SCARZ ・ Fan building, community building Public viewing of international tournaments (Shibuya, Jun – Jul) Fan meetings (Shins
Slide 17: Collaboration in the JFR Group
3. Direction (3) Collaboration in the JFR Group Standardization of services and expansion of services through collaboration in the Group ● Card: House cards consolidated into the JFR Group ● Gaisho: Provision of services to Shibuya and Shinsaibashi PARCO’s customers (Young affluent/highly sensitive
Slide 18: Development of urban real estate through Group collaboration
3. Direction (3) Collaboration in the JFR Group Development of urban real estate through collaboration in the Group ● Promote the development of important bases of the JFR Group in collaboration with J. Front City Development Nagoya 【Scheduled for summer 2026】 Fukuoka Nishiki 3-chome District 25 Pro
Slide 19: GINZA SIX Initiatives & Results
GINZA SIX Initiatives & Results ～Direction of Department Store Based on the Achievements of GINZA SIX～ NISHISAKA Yoshiharu Managing Executive Officer Senior Executive General Manager Management Strategy Headquarters Risk Management Daimaru Matsuzakaya Department Stores Co. Ltd. 1
Slide 20: Agenda
Agenda 1. GINZA SIX Initiatives & Results (1) Store Overview (2) Business Performance (3) Analysis of Success Factors 2. Direction of Department Store Based on the Achievements of GINZA SIX
Slide 21: GINZA SIX: Store Overview
1. GINZA SIX Initiatives & Results (1) Store Overview
Slide 22: GINZA SIX
GINZA SIX ii ike s4 + 5 ae
Slide 23: Layers (Entire Building)
Layers (Entire Building) 5 In addition to commercial floors, GINA SIX has offices, Noh theater, tourist center, rooftop garden, and other functions to attract a variety of people Building: 6 floors below ground, Commercial: approx. 47,000 m2 Office: approx. 38,000 m2 No. of office workers: approx. 3
Slide 24: Non-Commercial Facilities
Non-Commercial Facilities 6 GINZA SIX Garden Noh Theater Tourist center (TERMINAL GINZA, bus station) Offices
Slide 25: Concept & Strategy
Concept & Strategy 7 Value provided: Life At Its Best Pursuing the two elements of “World Class Quality” and “New Consumer Mindset” World class quality Best brands and products Traditional consumer mindset Best hospitality New consumer mindset Best environment Variety of services Cutting-edge promot
Slide 26: Layers (Commercial Floors)
Layers (Commercial Floors) 8 Commercial facility with Ginza’s largest floor area of approximately 47,000 A lineup of approximately 230 brands that embody the value provided “Life At Its Best”
Slide 27: Merchandizing
Merchandizing 9 Approximately 230 brands that embody the value provided “World Class Quality” Store lineup dominated by many flagship shops with the ability to transmit information Six luxury brands that spectacularly adorn Chuo-dori Flagships shops that transmit information from GINZA SIX to the wo
Slide 28: Services
Services Premium services that embody the value provided “World Class Quality” Special lounge for the exclusive use of high-end customers to establish closer relationships with them Premium lounge “LOUNGE SIX” ➢ Multilingual concierge service ➢A first for commercial facilities in Ginza ➢ A premium m
Slide 29: Environment
Environment 11 A fulfilling experience that embodies the value provided Artistic environment that stimulates the five senses and enriches the mind Interior design Art experience ➢A high-quality space design with a story about ➢Art programs filled with creative energy and an how to make visitors enjo
Slide 30: Collaboration between commercial facility and art
Take on the challenge of collaboration between the commercial facility and art to create things and experiences that can only be found here in the world Collaboration with artists and creators to develop art programs filled with creative energy and an element of surprise that stimulate the senses
Slide 31: Art collaborations with artists
KUSAMA Yayoi YOSHIOKA Tokujin Apr 2017 – Mar 2018 Feb 2020 – Feb 2021 Daniel Buren NAWA Kohei Apr 2018 – Oct 2018 Apr 2021 – Oct 2022 Nicola Buch Nov 2018 – Feb 2019 SHIOTA Chiharu Feb 2019 – Oct 2019
Slide 32: Promotion: Destination Art & Culture GINZA
Promotion 14 Strengthen three key words based on “sustainability” "Destination” (attracting more customers), “Art & Culture” (branding promotion) "GINZA” (coexistence and co-prosperity with the area) Destination Art & Culture GINZA Strengthen ties Make GINZA SIX a must-visit Promote branding through
Slide 33: Media
Media 15 Expand awareness through a Digital x Analog media mix Capture potential customers by approaching global and highly sensitive customers based on “international” and “art,” which are our strengths Digital Analog “International” transmission Influencer and social media advertising Transmission
Slide 34: Management
Management Management based on fixed-term lease agreements that allow for periodic brand replacement Joint management that takes advantage of the characteristics of different industries Freshness of the brand lineup Regular brand replacements are possible through fixed-term lease agreements with ten
Slide 35: GINZA SIX: Business Performance
1. GINZA SIX Initiatives & Results (2) Business Performance
Slide 36: Transaction Volume & Customer Traffic
Transaction Volume & Customer Traffic 18 Transaction volume exceeded pre-pandemic level, expected to grow further in FY2023 Transaction volume: Achieved highest transaction volume since opening in FY2022 Customer traffic: Expected to recover to pre-pandemic level in FY2023 Transaction Customer volum
Slide 37: Transaction Volume by Customer (Domestic and Inbound)
Transaction Volume by Customer (Domestic and Inbound) 19 Domestic transaction volume in FY2022 renewed the highest level since opening Inbound transaction volume in FY2022 exceeded that of the same period in 2019 since easing of border restrictions Inbound Domestic Entry restrictions and border cont
Slide 38: Transaction Volume by Customer (Member Stage)
Transaction Volume by Customer (Member Stage) 20 Transaction volume of members in FY2022 was up 36% YoY In particular, transaction volume for Diamond Stage members increased by 45% YoY (Share of all members increased to 30%) Diamond Platinum Bronze Stage requirements (annual purchase amount includin
Slide 39: Transaction Volume by Customer (Age, Gender)
Transaction Volume by Customer (Age, Gender) 21 Ratio of transaction volume among younger ages (20s-40s) increased 10% compared to pre-pandemic level (FY2019) Ratio of transaction volume by gender increased 3% for men compared to pre-pandemic level FY2019 FY2022 Transaction volume ratio of customers
Slide 40: Key Customer: Millennial Generation
Customer Profile 22 Millennials as the customer segment accounting for the largest share of sales; Expansion of household income symbolized by “power couples” against the backdrop of women’s empowerment; or Emergence of new types of “business owners” in new industries Key Customer: Millennial Genera
Slide 41: Favorable Categories
Favorable Categories 23 Luxury spending by affluent consumers in Japan and abroad drives sales Key customers in their 20s and 30s favor not only luxury brands but also contemporary brand lineups Luxury Fashion Contemporary Fashion Section along Chuo-dori, 2F 3F ● Affluent customers in their 20s to 4
Slide 42: GINZA SIX: Analysis of Success Factors
1. GINZA SIX Initiatives & Results (3) Analysis of Success Factors
Slide 43: Success Factors
Success Factors 25 ● Pursuit of the value provided “Life At Its Best” (tenants, promotion, service, environment) ● Structure to realize the value provided “Life At Its Best” Factor Details ・Pursuit of the two elements: World Class Quality Consistency of concept and strategyL and New Consumer Mindset
Slide 44: Direction of Department Store Based on GINZA SIX
2. Direction of Department Store Based on the Achievements of GINZA SIX
Slide 45: Direction of Department Store Based on the Achievements of GINZA SIX
Direction of Department Store Based on the Achievements of GINZA SIX Short-term initiatives Medium- to long-term initiatives Evolve value creation for the young and affluent in conjunction with major remodeling In the strategic remodeling of department of main stores. Develop a full-scale effort to
Slide 46: Initiative (1) Art from the Store and the Area (Daimaru Kobe)
Initiative (1) Art from the Store and the Area (Daimaru Kobe) 28 Daimaru Kobe store transmits art from the store and the area for the purpose of “coexisting with the local community,” “making the area more attractive,” and “improving the customer experience” Former Foreign Settlement and streets ・AR
Slide 47: Initiative (2) Creation of Lounges for Affluent Customers
Initiative (2) Creation of Lounges for Affluent Customers 29 Improve LTV by creating lounges at each store to increase the loyalty of affluent customers ●Main target is gaisho customers with a high frequency of store visits Target ●In addition, app users with top purchases are set as a sub-target (o
Slide 48: Synergies between GINZA SIX and Department Store
Synergies between GINZA SIX and Department Store (Gaisho Collaborations) 30 Expand the presence of department store gaisho business using GINZA SIX as a hook Particular focus on expanding the presence of gaisho in the Tokyo metropolitan area New collaboration between GINZA SIX and gaisho will start
Slide 49: https://www.j-front-retailing.com
https://www.j-front-retailing.com Create and Bring to Life “New Happiness.” Forward-looking statements in this document represent our assumptions based on information currently available to us and inherently involve potential risks, uncertainties, and other factors. Therefore, actual results may dif
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