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Basic Policy

Basic management policy

当Under a holding company structure, the Group will strive to enhance the competitiveness and profitability of the Department Store Business, the Parco Business and all constituent companies by optimizing and making an effective use of management resources including the store network and customer bases of Daimaru, Matsuzakaya and Parco as well as responding appropriately to changing times, maximizing customer satisfaction and operating in the most efficient way.

In addition, with the aim of realizing the new Group Vision “Create and Bring to Life ‘New Happiness,’” we will restructure our business portfolio by allocating resources to areas with greater potential so that it consists of highly competitive and profitable businesses in a balanced manner.

Target performance indicators

Through initiatives to realize the new Group Vision, we aim to achieve an operating profit of ¥56 billion, an operating margin of 10% and an ROE of 8% in fiscal year 2021, which is the final year of the Medium-term Business Plan.

e consider ROE, operating profit, free cash flow (FCF) and equity ratio attributable to owners of parent (equity ratio) as important financial indicators in terms of capital efficiency, business profitability, profitability/safety, and financial soundness, respectively.

Medium- to long-term management strategies

Over the duration set for the new Medium-term Business Plan, the five years from FY2017–2021, we intend to complete large development projects that we launched during the term of the FY2014–2016 Medium-term Business Plan, and then expect to start generating returns from those projects. At the same time, we regard the plan as comprising a “phase of Group structural transformation” involving a turning point during which the course taken by Group management will be drastically altered to achieve discontinuous growth based on the new Group Vision. Accordingly, we aim to achieve ROE of 8% in fiscal 2021.

Under the plan, we will take one step away from our approach as a multifaceted retailer operating multiple businesses to act as a “Multi Service Retailer,” thereby expanding our business domain to encompass endeavors in new fields extending beyond the retail industry framework. Meanwhile, we will actively reshuffle our portfolio of businesses by accelerating the identification of unprofitable business fields and other efforts.

Through our efforts to strengthen the Group’s growth strategy toward its structural transformation and our foundations of business that lend support to the growth strategy, we will work toward ensuring growth sustainability of the Group and increasing its medium- to long-term corporate value.

Management policy