Realizing a Circular Economy

The linear economy, which is based on mass production, mass consumption, and waste disposal, has led to various global environmental issues such as resource shortages, global warming, and waste management. Against this backdrop, the importance of the circular economy is increasing, as it aims to reduce waste and achieve resource circulation. The Group will accelerate its resource recycling efforts in cooperation with customers and business partners, aiming to both reduce risks related to environmental issues and acquire new business opportunities.

Launch of Reuse Business (Buyback)

In March 2025, the Company established a joint venture, JFR & KOMEHYO PARTNERS Co.,Ltd., with Komehyo Co., Ltd., to launch a reuse business. Starting in summer 2025, we began rolling out buyback specialty stores named “MEGRÜS” at Daimaru, Matsuzakaya, and PARCO locations. By passing valuable items from person to person and encouraging their long-term use, we aim to contribute to the realization of a sustainable society.
Buyback specialty stores「MEGRÜS」 8 stores (as of the end of FY2026)

A fashion subscription business friendly to the environment

AnotherADdress, a fashion subscription business started in March 2021, aims to shift to a business model with high sustainability for society and the environment by emphasizing the intrinsic value of fashion and sustainable initiatives based on the belief that clothes are not disposable. Daimaru Matsuzakaya Department Stores is the main operator of the service, delivering clothes to customers in partnership with various businesses including logistics, delivery, cleaning, and recycling.

Strengthening of Sustainable Initiatives

As of June, 2026, the number of subscribers had surpassed 440,000. This demonstrates a strong level of customer support. The service has expanded to include over about 460 brands and introduced improvements and new services based on customer requests, such as the "Worry-free Guarantee Service," the implementation of a "Size Comparison Tool," and changes to the return system.
Beginning in March 2023, we introduced Japan’s first sustainable delivery system for reusable garment bags in line with business expansion. This initiative eliminated the use of cardboard boxes in deliveries and reduced plastic consumption by 30% (compared to our previous practices).
In March 2023, we added a men's line in response to high customer demand. Then in September of the same year, we introduced an art rental service. By catering to a wide range of needs, including those of male customers and individuals seeking gender-neutral fashion, we aim to offer the joy of fashion "more freely" and “to more people."

In FY2024, we were selected for Japan's Ministry of the Environment’s "Environmental Action Promotion Subsidy" and the "Carbon Dioxide Emission Reduction Measures Subsidy," as part of the Deco-Katsu Promotion Project, a national movement creating new, richer lifestyles tied to decarbonization. Through these initiatives, we launched the garment recycling and upcycling project "roop," which continued during FY2025.

"roop" is a project that creates a new form of circular fashion by collecting clothes that no longer can be worn, transforming them into upcycled items through the creativity of professional designers and fashion school students, and making these items available for rental through AnotherADdress. In March 2026, the "roop Award 2025-2026" fashion design contest was held. Approx. 400 entries were submitted using around 700 collected garments as source materials. The competition attracted a wide variety of highly creative works that embodied the project’s objectives of reducing clothing waste, extending the lifespan of garments, and passing on apparel craftsmanship and design expertise. Selected works are available for rental through AnotherADdress, further promoting the circulation and effective use of fashion resources.

In June 2025, we will begin the corporate service "AnotherADdress.biz," offering sustainable solutions to support service quality improvements and cost reduction.
AnotherADdress remains committed to pursuing environmentally conscious business models in the future.

Visualizing Environmental Contributions Through Carbon Footprint

In March 2025, we collaborated with BiSUS Co., Ltd. to quantify the GHG emissions generated from renting a single piece of clothing once. By using AnotherADdress for one year, a customer can contribute to reducing 250kg-CO₂ compared to purchasing 13 new garments annually.
This contribution is visualized across seven stages as the "Environmental Contribution of AnotherADdress." By using this fashion subscription service, customers can enjoy fashion each month while accumulating action points. We have launched "AAD SUSTAINABILITY ACTION," which allows customers to track their contribution to the reduction of GHG emissions at each stage.

ECOFF-Working together with customers

Launched by Daimaru Matsuzakaya Department Stores in FY2016, ECOFF is a sustainable initiative to collect unwanted clothing, shoes, bags, and other items from customers at department stores and recycle and reuse them into new materials and products. The initiative has continued to grow every year thanks to the increasing environmental awareness of customers and their active participation. The volume of items collected in FY2025 was 319.4 tons (cumulative total: 2,487 tons since FY2016).
The initiative has also extended beyond store locations through "Off-Site ECOFF" events in collaboration with local governments and corporate partners, further broadening the reach of circular resource initiatives within local communities.
In the past, the clothing, shoes, and bags that we collected were reused overseas. But starting from the spring of 2024, we have increased the transparency of our supply chain by collaborating to deliver these directly to those in need through used clothing stores in Thailand and Cambodia.

PASSTO: Collecting unwanted clothing and fashion goods

In June 2024, PARCO and ECOMMIT Inc. introduced PASSTO to five PARCO stores (Kichijoji, Hibarigaoka, Chofu, Kinshicho, Fukuoka). PASSTO is an ECOMMIT service that collects, sorts, and redistributes unwanted items in one integrated process, with the aim of reducing local waste and contributing to resource recycling.

Horizontal Recycling of Gypsum Board

In the interior renovation work at Daimaru Matsuzakaya Department Stores, starting with the renovation of Matsuzakaya Nagoya Store in FY2025, we have been implementing horizontal recycling of gypsum board by: using 100% recycled gypsum board, and 2 sending waste gypsum board generated during demolition work to a factory capable of reprocessing it back into raw material for gypsum board.
Additionally, J. Front Prime Space has been properly processing gypsum board removed from construction sites and sending a significant portion to resource recycling. Going a step further, we have focused on utilizing calcium sulfate, the main component of gypsum board, as a soil conditioner.
Although this requires additional effort for on-site sorting, we are leveraging the material as a soil conditioner through a recycling company.

Upcycling for decorations

Daimaru Matsuzakaya recognizes the challenge of disposing of event decorations that are replaced seasonally.
For the 2022 Christmas season, the Nep Art Christmas Tree displayed at the Matsuzakaya Nagoya store was created by further upcycling the Tachineputa festival floats from Goshogawara, Aomori Prefecture. Those floats are made from paper recycled from waste cotton. After the display was over, the paper was carefully peeled off and used as labels for ciders brewed with out-of-spec apples produced in Aomori.

Creating a society that co-exists with the environment

• Aiming to Achieve Net Zero by 2050

• Environment Management System

• TCFD/TNFD Integrated Disclosure

• The Circular Economy the Group aims to create

• Proposal for Environment-Friendly Lifestyles

• Reduction of Wastes and Water Usage

• Biodiversity Initiatives

• Environmental Data

• Acquisition of Third-Party Assurance