WACOAL HOLDINGS CORP.

THE WACOAL GROUP-EMPATHY WITH WOMEN

Based on a founding spirit and management philosophy that call for it to "contribute to society by helping women to express their beauty," Wacoal has enhanced its enterprise value by creating products customers love and developing products meeting the needs of the times.

Not only seeking beauty but also focused on enhancing comfort and health, Wacoal Group's Human Science Research Center has conducted basic research on women's physiques for more than 40 years. Unmatched among competitors, such unique capabilities enable the Wacoal Group to analyze carefully what customers see as offering real value and develop appealing products suited to the times.

Also, the Human Science Research Center supports Wacoal's unique activities as a company empathetic to women. The results of the center's research benefit a range of businesses, including in the Remamma project, which caters to women that have undergone breast cancer operations; the Dublevé business, which provides semi-order-made innerwear; the Good Age business, which develops products for seniors; and companies that apply business-based approaches to address social issues. At the Wacoal Group, we want to preserve our founding spirit and contribute to society at large as a company empathetic to women.

FISCAL 2011 BUSINESS RESULTS REPORT

For fiscal 2011, ended March 31, 2011, the Wacoal Group posted year-on-year increases of 1.5% in net sales, to ¥165,726 million, 11.7% in operating income, to ¥4,255 million, and 3.6% in net income, to ¥2,615 million.

Our domestic business faced tough business conditions as continuing slumps in the mainstay department stores sales channel and among general merchandising stores and other retail formats affected its performance. In response to these conditions, the Wacoal Group increased its earning power by implementing structural reform focused on its main operating company, Wacoal Corp, in accordance with the new Medium-Term Management Plan that began in April 2010. At the same time, we strengthened our growth potential by actively developing overseas businesses with an emphasis on China. The structural reform successfully improved the earnings of Wacoal's domestic business. However, Peach John recognized an operating loss of roughly ¥3 billion, partly due to the recognition of impairment charges on other intangible assets. As a result, although we achieved year-on-year growth in operating income, the size of the increase was disappointing.

AN OVERVIEW OF THE MEDIUM-TERM MANAGEMENT PLAN

PERIOD

April 2010 - March 2013

TARGET CORPORATE PROFILE

A stronger global presence for the Wacoal Group

NUMERICAL TARGETS (FISCAL 2013)

GROUP STRATEGIES OVER THE THREE YEARS

• Heighten the overall capabilities of the Wacoal Group through promoting collaboration among Group companies to realize each company's strengths
• Secure and increase earnings
  - Restructure operations focusing on innerwear wholesale operations
  - Accelerate expansion in growing business areas at home and abroad
• Strengthen system for Groupwide management

TARGET CORPORATE PROFILE FOR FISCAL 2013

• New revenue and earnings pillars established alongside existing innerwear wholesale operations
• Overseas operations such as those in the U.S. and China support growth
• Restructured innerwear wholesale operations see profitability improve
• System for Groupwide management further developed and strengthened
• Meeting CSR and compliance requirements

PROGRESS UNDER THE MEDIUM-TERM MANAGEMENT PLAN

We have completed the first year of the medium-term management plan launched in April last year. Unfortunately, judging based only on fiscal 2011 business results, there are many issues we must address. On the other hand, we did make concrete progress. In the remaining two years, we intend to steadily resolve immediate problems while moving toward achievement of our target corporate profile.

Benefiting from bringing forward the structural reforms and appropriate expenses control, Wacoal's domestic business saw operating income recover ahead of targets. However, sales were down year on year, despite brisk sales of brassieres thanks to promotional campaigns highlighting the results of the Human Science Research Center's aging research. Lower sales were partly attributable to the effect of the Great East Japan Earthquake. As for the overseas businesses, while sales were favorable by and large, operating income remained unchanged year on year due to higher advance investment in our business in China. Tasks going forward are to achieve a recovery in the sales of Wacoal's domestic business and maintain the sales growth in overseas businesses while generating earnings.

In other businesses, Lecien, which became a wholly owned subsidiary last year, made progress in reforming its earnings structure but did not realize operating income as planned. This was partly due to the recognition of pension expenses and other special factors. Also, Peach John had a significantly negative impact on consolidated business results for fiscal 2011. As well as a drop of more than 10% in net sales, the subsidiary recorded a substantial operating loss for the second year in a row. Amid efforts to grow the Wacoal Group's earnings, rebuilding Peach John's business is the highest priority task.

MEASURES AND STRATEGIES AIMED AT REALIZING THE MEDIUM-TERM MANAGEMENT PLAN

As the second year of our medium-term management plan, the current fiscal year will see us overcome the abovementioned issues by accelerating a range of initiatives. In a drive to strengthen the earning power of the domestic Wacoal business centered on wholesale operations, we intend to heighten our operational efficiency in the mainstay department stores sales channel. While reducing inventory per item, we will display a wider range of products with a view to encouraging a higher rate of repeat purchases by offering customers a greater selection of products. Through even more precise product control, we intend to heighten inventory turnover rates at stores. In conjunction with these efforts, we will deploy sales personnel at stores appropriately in order to increase the productivity of each sales person. Further, the Group will continue initiatives to rationalize manufacturing and distribution as well as reform business infrastructure.

In efforts to rebuild Peach John's business, from the current fiscal year we intend to move the company into the black rapidly by completely renewing its business management system and drastically revising its previous strategies. In tandem with measures to turn around the sales of the subsidiary by changing its organization and revising product plans, we will advance reforms aimed at establishing a solid earnings structure.

As for Lecien, innerwear comprises about half of its products. Moreover, roughly 80% of its innerwear products are low-margin OEM products. Therefore, aiming to add value, Lecien is currently undertaking joint product development with major chain stores as well as developing sales areas in conjunction with the Wacoal and Wing brand businesses. In addition, we are realizing a variety of Group synergies. For example, Lecien is using its expertise in the manufacture of low-priced products to advance operational collaborations with Wacoal's retail business and Peach John as well as introduce new brands. Overseas, we are considering using Lecien to establish a system that will support manufacturing for our business in China. At present, Wacoal is mainly rolling out products for China's high-end market. However, we are planning to market low-priced and mid-priced brands. We believe that Lecien can build and operate a manufacturing system that will provide a stable supply of products at low cost.

Further, the Medium-Term Management Plan sets out establishing a stronger global presence as a target corporate profile for the Wacoal Group. In order to realize this, our most important management task is to expand overseas businesses. The Wacoal Group took its first steps toward becoming a major presence in markets worldwide by establishing joint venture companies in Korea, Taiwan, and Thailand in the early 1970s. Since then, 40 years have passed. Now we have 30 operating companies overseas including affiliates, which generate total local sales worth ¥52 billion. Nevertheless, we have only progressed half way toward establishing a stronger global presence for the Wacoal Group. With its domestic market maturing, the Wacoal Group has to expand its overseas businesses further in order to maintain steady growth.

Accordingly, we are accelerating business expansion in the United States and in China's growing market. As well as expanding our business within the United States, we are using it as a base from which to enter such new markets as Canada, Brazil, and Mexico. In China, our business remains at the advance investment stage. For the time being, we will conduct advertising campaigns vigorously and expand our store network in order to heighten the visibility of the Wacoal brand and secure market share in China. Although our business in China recorded an operating loss for fiscal 2011, we expect it to break even for the current fiscal year. And, from fiscal 2013 onward, we plan for it to contribute to the Group's earnings.

STRENGTHENING THE GROUP'S OVERALL CAPABILITIES

In June 2011, I resigned as the representative director and president of Wacoal Corp. to become its representative director and chairman. Hironobu Yasuhara became the representative director, president and corporate officer of Wacoal Corp. Consequently, he will manage the Company as the top executive responsible for the implementation of operations. Until now, I have concurrently held the positions of representative director of our holding company, Wacoal Holdings Corp., and president of our operating company, Wacoal Corp. However, for some time I have felt that I should not hold these positions simultaneously given the differing roles of the two companies. Although we are in the midst of carrying out measures under the Medium-Term Management Plan, business results are on track for recovery. Therefore, we felt it was an opportune moment to adjust the management system. Closely involved with our business in China and our core manufacturing operations for many years, Hironobu Yasuhara has a wealth of experience. Also, given the trust he inspires inside and outside the Group as an individual, we thought he was an appropriate choice for the top management position at Wacoal Corp. Under the new system, as the leader of the holding company I want to boost the role that I play in heightening the overall capabilities of the Wacoal Group.

With six years having elapsed since we established a pure holding company, strengthening collaboration between Wacoal and new Group members Peach John and Lecien is becoming a pressing issue. Aiming to address this issue, we have established the Group Strategy Meeting. By gathering the senior management teams of operating companies around one table, this meeting will facilitate the sharing of a variety of issues and tasks relating to product planning through to manufacturing with the whole Group and integrate efforts to solve such issues. This process will heighten the Wacoal Group's overall capabilities and speed up management decision making. In future, we hope to include overseas operating companies in these meetings.

AIMING TO GIVE THE WACOAL GROUP A STRONGER GLOBAL PRESENCE

Calling on us to "contribute to society by helping women to express their beauty," our management philosophy not only applies to women in Japan but to women the world over. The target of establishing a stronger global presence for the Wacoal Group set out in the Medium-Term Management Plan summarizes our ambition to have women around the world support and love our products. This does not simply mean that we aim to sell our products in markets worldwide. Rather, our goal is to enrich women's lives by manufacturing the kind of high-quality, high-value-added products that only we can.

I do not think we will have established a strong global presence for Wacoal Group until, based on complete trust in our products, the women of the world recognize the real value of the Wacoal as a corporate brand. Looking still further into the future, I want to extend the scope of our social businesses, which we are currently operating in Japan and certain other countries, to encompass regions worldwide. Contributing to society and women's quality of life through its main business is one of Wacoal's key social missions.

In closing, we would like to express our sincere sympathy for the victims of the Great East Japan Earthquake on March 11, 2011, as well as our wishes for a rapid recovery. At the Wacoal Group, we are committed to helping this recovery by unstintingly providing assistance to the people affected by the disaster and the affected areas.

As we take on an array of fresh challenges, I would like to ask our shareholders, investors, and other stakeholders for their continued understanding and support.

August 2011

Yoshikata Tsukamoto
Representative Director