Village Vanguard Co., Ltd. · TSE:2769
Village Vanguard — Q3 FY05/2011 Earnings Presentation
48 slides from Village Vanguard's earnings presentation, April 2011
Slide 1: Q3 FY05/11 Results Presentation
Cover VV Q3 FY05/11 Results Presentation
Slide 2: Note
Note: Any current plans, forecasts, strategy projections, expressions of confidence and other statements made by us in these materials are premised on the information that was available at the moment of the initial publication and on models that depend on uncertain factors that could impact future e
Slide 3: P&L (Consolidated)
P&L (Consolidated) FY05/11 Q3 vs. forecast and Q4 forecast reflect revised budget. (Million Yen) Income Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est S l Sales 7,343 3 3 7,462 62 9 39 9,739 8 682 8,682 8 630 8,630 82 3 8,273 10,290 0 290 9 9,456 6 93 9 9,359
Slide 4: Balance Sheet (Consolidated)
Balance Sheet (Consolidated) Estimated values for Q4 FY05/11 reflect the revised budget. (Million Yen) Balance Sheet FY05/09 FY05/10 FY05/11 ((Million Yen)) Q1 Q Q2 Q Q3 Q Q4 Q Q1 Q Q2 Q Q3 Q Q4 Q Q1 Q Q2 Q Q3 Q Q4 Est Q Cash & Deposit 2,750 2,387 3,011 3,078 2,685 2,957 3,503 4,037 3,045 3,378 3,58
Slide 5: Cash Flow (Consolidated)
Cash Flow(Consolidated) Estimated values for Q4 FY05/11 reflect the revised budget. budget (Million Yen) Cash Flow Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est Operating Cash Flow -419 -533 -1,758 -735 -292 -146 298 1,647 -730 -347 -111 508 Change in Invent
Slide 6: Impact of the Tohoku Earthquake
Impact of the Tohoku Earthquake (1) Affected stores: Numbers of stores temporarily closed 100 89 90 ＶＶ 80 70 66 63 60 53 50 49 40 37 31 30 27 24 24 23 18 20 16 14 10 11 11 10 10 10 10 0 3/12 3/13 3/14 3/15 3/16 3/17 3/18 3/19 3/20 3/21 3/22 3/23 3/24 3/25 3/26 3/27 3/28 3/29 3/30 3/31 Chubu Area, 中部
Slide 7: Impact of the Tohoku Earthquake
Impact of the Tohoku Earthquake (2) Affected stores: Types of closed stores 40 Titicaca ＶＶ 37 35 Titicaca - Closed stores As of Mar. 31st one Titicaca store was 31 closed and categorized g under GrouppB 30 (Under repair; date of reopening unconfirmed). 27 25 24 24 23 20 18 16 15 14 11 10 10 10 10 10
Slide 8: Impact of the Tohoku Earthquake
Impact of the Tohoku Earthquake (3) Affected stores: YoY comparable store sales for stores operating under shortened business hours due to rolling blackouts. 120.0% YoY sales at existing stores operating under shortened business hours ＶＶ 営業時間変更（計画停電の影響）のある既存店の売上昨対の推移 107 8% 107.8% due to rolling bla
Slide 9: Impact of the Tohoku Earthquake
Impact of the Tohoku Earthquake March YoY comparable store sales (preliminary figures) ※数値は確定前の速報値です 120.0% 100.0% 80.0% 189 stores 189店 2727店 stores 286 stores 286店 4040店 stores 60.0% 9797店 stores 1313店 stores +1 3% +1.3% +3 9% +3.9% -8.1% 8 1% 40.0% -24.8% -5.6% -5.6% 20.0% VV Titicaca VV Titicaca
Slide 10: Parent Company Village Vanguard Corporation
Parent Company Village Vanguard Corporation © Village Vanguard corporation, All rights reserved. P.10
Slide 11: What We Do
What We Do ■Village Vanguard ■Diner “A A bookstore where you can play play.” By bringing together various products such as An old-school hamburger shop books, variety goods, and CDs, our stores have a unique feel. modeled after an American diner. ■new style ■QK ■Online For those who want to be parti
Slide 12: Examples of Our Merchandising Approach (1)
Examples of Our Merchandising Approach (1) We offer merchandise by creating a unique retail space aimed at entertaining the customer Toy digital camera “mini digital camera” Camera-shaped and a USB memory shoulder bag stick Camera-shaped hand mirror Photo albums Scrap books Toy camera Masking tape “
Slide 13: Examples of Our Merchandising Approach (2)
Examples of Our Merchandising Approach (2) © Village Vanguard corporation, All rights reserved. P.13
Slide 14: Examples of Our Merchandising Approach (3)
Examples of Our Merchandising Approach (3) © Village Vanguard corporation, All rights reserved. P.14
Slide 15: How Do We Sell?
How Do We Sell? We delegate both purchasing and sales decisions to the store level Marketing - Pursue customer needs in each store Store manager has Purchasing absolute discretion - Reflect customer needs directly - Unique challenge to discover new needs Proposition - POP, zone creations, and displa
Slide 16: Hiring Strategy
Hiring Strategy Fullll Time Customer Temp Staff Employee ■ Hiring people who really understand the company ■ Even temporary staff are allowed to make purchasing decisions ■ Long-term practical on-the-job training © Village Vanguard corporation, All rights reserved. P.16
Slide 17: Store Openings (Parent)
Store Openings (Parent) Store data as end-February 2011 354 stores nationwide Tohoku Area 331 Directly Managed Hokkaido DM 21 (DM) DM 15 FC 2 Aomori 288 VV format 5 Breakdown 28 new-style format Hokkaido Akita 5 QK format Iwate 17 (2) 4 10 Diner Di format f 4 Yamagata Miyagi Hokuriku 23 FC stores Ar
Slide 18: Parent Income Statement
Parent Income Statement FY05/11 Q3 versus forecast and Q4 forecast figures reflect revised budget. (Million Yen) Income Statement FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est. Sales 7 096 7,096 7 144 7,144 9 438 9,438 8 397 8,397 8 271 8,271 7 827 7,827 9 888 9,888 9
Slide 19: Comparable Store Sales (Village Vanguard Stores)
Comparable Store Sales (Village Vanguard Stores) 6 0% 6.0% 4.8% 4.0% 2.5% 2.0% 1.3% 0.5% 0.6% 0.0% -0.5% -2.0% -1.0% -1.3% -2.7% -4.0% -3.2% -3.4% 4.0% -3.9% 4 2% -4.0% -4.2% -4.7% -6.0% -6.1% -6.3% -8.0% -7.0% -7.6% -8.1% Comparable-Store (FY05/10) -10.0% -9.8% 9 8% Comparable-Store bl ( (FY05/11)
Slide 20: Comparable Store Sales (All Parent Formats)
Comparable Store Sales (All Parent Formats) Sales by Format FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total 6,442 12,483 20,268 27,134 6,734 13,353 22,497 30,695 8,333 16,240 26,350 Comp Stores YoY 3.9% 2.5% 1.5% 0.2% -5.7% -6.5% -5.6% -4.9% -0.4% 0.2% 0.8% Village Va
Slide 21: Sales by Category
Sales by Category Sales by Category FY05/09 FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 SPICE (Parent) 5,109 5,243 7,102 6,310 6,193 5,926 7,785 6,904 6,780 6,461 8,609 (Internal Sourcing Team 1,180 2,512 4,516 6,254 1,578 3,143 5,440 7,344 1,752 3,522 6,235 (Other) 3,928 7,839
Slide 22: Comparable Store Sales (by Store Age)
Comparable Store Sales (by Store Age) Year In Operation 6th and Older 5th 4th 3rd 2nd 1st (Directly Managed Stores) Number of Stores * 135 43 21 59 34 39 YoY Sales l (%) ( ) -2.5% 0.9% 1.2% 4.0% 7.0% - *excluding online and closed stores *1 Mobile stores and closed stores are excluded. © Village Van
Slide 23: OP Analysis
OP Analysis (Million Yen) 3,000 Decline in OP due to factors other than store operations -119 million yen Increase in OP from new stores (less than 13 months since opening) Main reason: 2 900 2,900 Write-downs -115 million yen 292 million yen -119 * Increase of 12 million yen per month compared to Q
Slide 24: Store Openings (Incl. Titicaca Subsidiary)
Store Openings (Incl. Titicaca Subsidiary) New Openings & Closures FY05/09Act FY05/10Act FY05/11Act FY05/11Act FY05/11Est FY05/11Est Full-Year Full-Year 1H Q3 Q4 Full-Year Openings Village Vanguard 42 30 16 12 11 39 new style 8 1 2 12 4 7 QK 5 0 0 0 0 0 Diner 4 1 0 0 0 0 FC 0 2 0 0 0 0 Titicaca 12 1
Slide 25: Theme 1: Dedicated Area Managers
Theme 1 Sales Improvement from the Introduction of Dedicated Area Managers Dedicated area managers were introduced in March 2010 People Comp Store Sales YoY by Area Manager Comp. * Playing managers were in charge before 30 106% March 2010 Dedicated area managers were 1 2 2 introduced in 3 4 4 3 6 Ma
Slide 26: Theme 2: Splitting the Internal Sourcing Team
Theme 2 Expanding merchandise variation by splitting the internal sourcing team into two competing units Despite an increase in the number of suppliers shipping merchandise and a higher share of shipments of new products through the efforts of the two competing units … Breakdown of share for Top 100
Slide 27: Theme 3: Impact of Organizational Changes
Theme 3 Impact of organizational changes (Themes 1 & 2) in FY05/11 Costs were included in FY05/11 budget but any positive effects were not Theme 1 Theme 2 Dedicated area managers Two HQ sourcing teams Impact on FY05/11 Cost increase of 450 million yen Cost increase of 150 million yen (included in bu
Slide 28: Theme 4: Inventory Control
Theme 4 Inventory Control FY05/09 FY05/09 FY05/10 FY05/10 FY05/10 FY05/10 FY05/11 FY05/11 FY05/11 (Million Yen) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash Flows From Operations ‐1,694 ‐669 ‐197 ‐173 380 1,756 ‐718 ‐523 ‐214 Net Income Before Tax 2,276 3,149 821 1,320 2,498 3,256 502 1,015 2,371 Net Increase (D
Slide 29: © Village Vanguard corporation, All rights reserved. P.29
© Village Vanguard corporation, All rights reserved. P.29
Slide 30: Outside Titicaca Stores
Outside Titicaca Stores Lake Town Lalaport Shin Shibuya store Misato store store (Shibuya, Tokyo) (Koshigara , Saitama) (Misato, Saitama) Early days Now Started as a folk art shop, p, with signs and store fixtures Warm, natural store interior, Image of a Mexican resort hand‐made by staff, in order e
Slide 31: Outside Of New Stores
Outside Of New Stores New Store Design With the aim of creating colorful, vibrant stores to provide a fun atmosphere for customers, we have designed stores with a genuine Mexican resort hotel motif. We have taken particular care to create an atmosphere that lets customers enjoy the feeling of shoppi
Slide 32: Inside Titicaca Stores
Inside Titicaca Stores Apparel Accessories Silver Accessories © Village Vanguard corporation, All rights reserved. P.32
Slide 33: Store Openings
Store Openings Store data as of end-February 2011 56 stores Tohoku Area nationwide DM 4 54 Directly Managed (DM) Akita Iwate 1 2 FC stores 1 Yamagata Miyagi Hokuriku 1 1 Area Chugoku Area DM 3 & Shikoku Ishikawa 1 Gunma DM 4 1 Ibaraki Nagano Kyushu & Kyoto Saitama 1 Okinawa 2 5 1 Chiba Shiga Kanagaw
Slide 34: Titicaca - Results
Titicaca - Results Income Statement Met Q3 accumulated budget Sales +51.4% YoY FY05/11 Q3 versus forecast and Q4 forecast reflect revised budget Titicaca Income Statement FY05/10 FY05/11 (Million Yen) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Est. Sales 361 474 416 467 579 720 630 418 Operating Profit 23 55 -10 10 -2
Slide 35: Titicaca - Results
Titicaca - Results Sales Above Budget +6.1% against the cumulative budget (+111 million yen) * All figures are against accumulated budget from the beginning of the term to Q3. Existing stores: +5.7% (+69 million yen) New stores: +6.8% (+34 million yen) Wh l l and Wholesale d FC sales: l +8.0% 8 0% (
Slide 36: Titicaca - Results
Titicaca ‐ Results Comparable store sales Accumulated YoY through Q3 +18.8% 150% *Different colors indicate settlement terms. Achieving positive 140% YoY sales for 37 consecutive months 130% since Feb. 2008, still 130.3% setting new records. 128.5% 124.8% 120% 118.3% 121.5% 120.8% 120.1% 118 2% 118.
Slide 37: Titicaca - Results
Titicaca - Results YoY Sales by Merchandise During July to December the apparel category shows favorable sales, with average YoY sales of +31% in this category for this period. Category 衣料部門 Apparel 雑貨部門 Sundries 既存店昨対 Existing Stores YoY Sales 146.4% 145% Transition of YoY Sales by Merchandise Cate
Slide 38: Village Vanguard (Hong Kong) Limited Company Profile
Village Vanguard (Hong Kong) Limited Company Profile (Consolidated from FY05/11) © Village Vanguard corporation, All rights reserved. P.40
Slide 39: Inside Stores (VVHK)
Inside Stores (VVHK) © Village Vanguard corporation, All rights reserved. P.41
Slide 40: Village Vanguard Hong Kong - Results
Village Vanguard Hong Kong ‐ Results FY05/11 Q3 versus forecast and Q4 forecast figures reflect revised budget. budget Shop Opening 3 Directly Managed stores● (as of end‐Feb. 2011) 2 Kowloon Dragon Center store FY05/11 Results vs. Plan Results Estimates Opened in Dec. 2009 (Million Yen) Q1 Q2 Q3 Q4
Slide 41: Strategy for operating profitability
Challenges and Measures (VVHK) Strategy for operating profitability Improving SG&A Increasing sales Increasing sales by promoting local merchandise Cutting distribution expenses - The ratio of local merchandise sold, total sales and customer numbers - Changing g g merchandise transportation p to shi
Slide 42: Village Vanguard Webbed (Non-consolidated)
Village age Vanguard a gua d Webbed ebbed (Non-consolidated) ( o o so da ed) To be b consolidated l d d from f FY05/11 / Q4 © Village Vanguard corporation, All rights reserved. P.44
Slide 43: Company Profile (VVW)
Company Profile (VVW) Company Name Village Vanguard Webbed Co. Shareholder Village Vanguard Corporation 100% Composition Business Description E-commerce retailer of books, general merchandise, CDs, and DVDs Head Office Kamiyashiro 1-908, Meito ward, Nagoya City, Aichi Directors CEO Ryo Yos
Slide 44: YoY Sales
YoY Sales (*Total final sales to customers) 300.0% % Target media: - Websites - Mobile websites - Rakuten ee-commerce commerce site: FY05/11 250.0% 2009/3–2010/7 Q1–Q3 Aggregate YoY Sales +1.7％ 200.0% 150.0% 100.0% 50 0% 50.0% © Village Vanguard corporation, All rights reserved. P.46
Slide 45: Comparison between Online Business Sales and Total Sales of Retailers
Comparison between Online Business Sales and Total Sales of Retailers Total Sales Online Sales Online sales contribution Company Name Target Period (Million Yen) (Million Yen) to total sales Culture Convenience Club Apr.–Sep. 2010 81,992 10,386 Co Co. (6 months) 12.7% * Consolidated C lid t d * Inte
Slide 46: ISC1 Translator's Note
スライド 45 ISC1 **Translator’s Note: 無印良品の社名は（株）良品計画のようです** Ito-Smithies Communications, 2011/04/07
Slide 47: New Website Concept and Future E-Strategy
New Website Concept and Future E-Strategy An E-Commerce site where you can come to play = A website with interesting pages + a unique selection of merchandise Unique Selection Interesting Pages Expanding p g & upgrading pg g Merchandise proposal efforts merchandise variation Enabling individual user
Slide 48: A Snapshot Of Merchandise Offerings On Our New Website
A Snapshot Of Merchandise Offerings On Our New Website (*April 4 launch) Science Magazine for Adults vol.30 – with special feature on Dutch Artist Theo Jansen Daily updated product recommendations for repeat visitors based on user viewing history. Product presentation incorporates other media, Weekl
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