Issues to be addressed
(i) Domestic: Transformation of the business structure in response to changes in the market environment
The women’s innerwear market is contracting due to demographic changes and diversifying consumer behavior. In addition, the competitive landscape is intensifying and purchasing channels are undergoing transformation. In our mainstay innerwear business under this business environment, we will seek to transition to an appropriate business structure aligned with market size rather than assuming that the market will return to growth. We will furthermore drive transformation toward a business model that generates profit by delivering value distinctive to the Wacoal Group leveraging our strengths, which include the technologies and knowledge we have amassed thus far as well as our holdings of anthropometric data. Specifically, we will redefine our business domain from “innerwear” previously to anthropometric data-driven “empowerment solutions” and strengthen our delivery of solutions offering high added value.
(ii) Domestic: Continuation of cost structure reform for improving profitability
In order to restore basic earning power, we will continue a radical cost structure reform. With respect to pricing, we will stabilize and improve our gross profit margins by optimizing prices while minimizing the impact on sales, taking into account cost trends such as raw material expenditures and demand patterns. We will also review our production system and procurement practices in seeking to mitigate the impact of structural increases in manufacturing costs while also reducing losses attributable to returns and other factors and improving operational efficiency by increasing the proportion of standard and continued products. We will rigorously implement selection and concentration through these initiatives in aiming to achieve an optimal cost structure that addresses changes in the business environment.
(iii) Domestic: Enhancement of brand and customer strategies leveraging digital technology and our own strengths
We will promote thorough “customer-centric” brand management and continuously work to cultivate brands with clear and appealing value propositions. In addition, we will promote customer-oriented DX to develop deep, wideranging and long-term relationships with customers and provide optimal customer experience. We will make use of digital tools to analyze purchasing data of our “Wacoal Members” membership service, as well as customer feedback and insights derived from sales staff’s customer service, thereby using such insights to upgrade the customer 19 experience. Furthermore, we will leverage 3D measurement services and apps in addition to consulting services provided by our sales staff in delivering customer experience that combines in-store and online interactions. We will also strengthen our deployment of reservation and ordering services through our own e-commerce platform to retail stores. Through such initiatives, we will strive to improve customer experience across a variety of touchpoints.
(iv) Overseas: Strengthening the business operating structure for the purpose of enhancing Group management
We will reorganize operations in transitioning from the former Global Operations Div. into a two-division structure consisting of the “Europe and the Americas Operations Div.” and the “China and Asia Operations Div.” directly under the Representative Director of Wacoal Holdings Corp. This will accelerate the process from decisionmaking to execution while also promoting stronger governance and monitoring. In the United States, we will steadily execute PMI with Glamorise Foundations, Inc. acquired in April 2026, while also expanding e-commerce and developing growth brands with a focus on the CW-X brand. In Europe, we will maximize synergies with Bravissimo Group Limited acquired in September 2024, and strive to strengthen our growth foundation through new channel development and e-commerce expansion. In China, we will rigorously implement store profit and loss management and deal with unprofitable stores. At the same time, we will seek to improve operational efficiency through a review of functions and structures aligned with sales volume as well as cost controls.
(v) Governance: Improvement in profitability and capital efficiency through enhancement of the management control base
The Wacoal Group has introduced ROIC management in order to improve capital efficiency and realize a lean corporate structure. We will endeavor to continuously improve corporate value by using ROIC as an indicator for managing company-wide financial targets, while also positioning it as a means for performance management that accurately measures results, quantitatively linking improvement activities on the ground with improvements in earning power and capital efficiency as expected by our investors and other stakeholders, and elevating the effectiveness of management controls.
(ⅵ) Other issues
We recognize the increasing severity of climate change and other environmental issues as well as human rights issues, which calls for appropriate action and preventative measures. The Wacoal Group will continue endeavoring to address increasingly complex and diverse social issues as a future “growth opportunity,” while promoting “sustainability management” to achieve both “resolution of social issues” and “sustainable growth” through our business. We will endeavor to improve corporate value by seeking “to resolve social issues” on the one hand and “to achieve sustainable growth” on the other hand through our steady promotion of initiatives for “maximizing value provided to customers,” “building an organization in which each employee can grow and be highly motivated,” “preserving the global environment for future generations,” “realizing a society in which everyone can excel at their roles” and “enhancing governance toward realization of sustainable growth,” which we have defined as our materialities (material issues).