TOP MESSAGE～Aim to become a 100-year company～
In line with our Group’s business philosophy, we have been providing products that are closely linked to our daily lives consistently from our founding in 1946. We have developed a business model that pursues synergies between the following two business models with the goal of becoming a 100-year company.
One is our OEM business in which we provide our clients with their branded products through an integrated system that includes design development, manufacturing, quality control and logistics management. And the other is the Brand business which handles our own brands and the other excellent overseas brands with practical use of the knowledge and experience we have gained through OEM business.
All of a sudden, our society, economy, business environment, lifestyle and routines are forced to be changed and upheaved brought by COVID-19 pandemic this year and our first priority put on the human life itself in this world. We have entered a “new normal.” Under these circumstances, the ability of companies’ corporate management is being tested regardless of their size. And in the Group’s business activities, we have been severely impacted by the restrictions on the operations of overseas subsidiaries as well as the prolonged closures of the retail stores operated by the domestic subsidiaries.
At present, it is even more difficult to foresee the future in this difficult business environment. We have recognized our corporate philosophy in order to return to our starting point and have decided to reiterate the definition and the meaning of “Zuien” (the bond fellowship) as espoused by our founder as the heart of SANYEI. This word originally comes from Buddhist terminology that means “to create mutual relationships by respecting every bond.” We have re-established this as our corporate philosophy so that each of us can return to the idea that the most important thing not only at work, but in life as well, is the connection between people. At the same time, we have also renewed our management vision, which is shortly expressed in the phrase “Enhancing health and enriching life through lifestyle goods.”
For the fiscal year ended on March 31, 2020, net sales decreased, but operating profit and ordinary profit increased. However, net profit decreased when compared against the previous year. We have been reviewing the profitability of various processes, which was successfully carried out, despite gross sales amount in North America declining sharply. In the domestic retail business, we are facing a critical situation with many challenges that we must overcome: impairment loss will be recorded as a result of the previous boom due to our owned store strategy in addition to the unforeseen serious damage by COVID-19.
Under the circumstances, the global economy and consumer purchasing behavior have been in a downtrend worldwide, and it will take some time to recover. There is no doubt that the fiscal year 2020 will be a challenging year for us.
However, there is already a movement to explore a new state of everyday life based on the premise of the “Age of COVID-19”. Furthermore, we anticipate the emergence of new consumption preferences and the progress in the transformation of working styles.
For example, we have seen significant growth in the sales of our online interior shops in the Japanese market, especially from the spring of 2020, when many of us have spent time at home. We are steadily feeling the demand for our e-commerce business under the “new normal.”
At the same time, we have decided to continue the teleworking program, which began to prevent the spread of infection, as one of the working style options in the “new normal” in order to run the Company more efficiently by re-building the environment where our employees can work more productively.
In order to survive amid the progression of the “new normal,” we should approach from various viewpoints to deal with a different sense of values, and we must provide our own added value to the markets as well, since we have been picking up a good deal of expertise along the way as a trade firm of lifestyle products.
Recently we have been promoting new initiatives in the Fashion Accessories Division, such as launching “Our EARTH Project” to provide sustainable materials to contribute to the realization of a recycling-oriented society. With keeping in mind the “Zuien” succeeded from our predecessors, we will continue to engage in businesses that can be incubated in the new era with sincerity and enthusiasm.
We sincerely appreciate your further support and encouragement.