Corporate information

To our stockholders

I would like to extend my appreciation to the support received from our stakeholders.
Thanks to this support, we achieved a sixth consecutive year of record-breaking operating income and set a new record for profitability during the fiscal year ended February 2016.
Looking forward, we stand committed to not only making our store operations more efficient, but also fulfilling our mission as a company with close ties to the local community by working in good faith on activities that give back to the communities where we operate.

During the fiscal year ended February 2016, Japan's economy continued a steady recovery, but challenging conditions persisted given the ongoing weak undertones of consumer sentiment coupled with the affects of a record-breaking warm winter. In response, we strived to provide a competitive selection of products in terms of both quality and price and also worked hard to establish ourselves as the number one regional store by further raising the value-added nature of our sales floors. In terms of new store openings, we opened large-format shopping center youme Town Hatsukaichi (Hiroshima Prefecture) with estimated annual customer traffic to be ten million, but the results have actually exceeded this plan. Furthermore, the four other smaller stores we opened have generated strong sales thus far. Large-scale additions and remodeling projects for three stores, including youme Town Hikari no Mori (Kumamoto Prefecture) have boosted revenue by 20 to 30%. On the product side, we improved upon our strategy of "good quality, inexpensively" to address the trend of consumer polarization.

We welcomed two new consolidated subsidiaries to the Izumi Group acquired through M&A. First, we received a third-party allotment of shares from Yours Co., Ltd. (Yours), a supermarket with a stronghold in Hiroshima Prefecture and acquired Dailymart Co., Ltd., a company with a stronghold in Tokushima Prefecture. In addition, we worked with Super Daiei Corporation and KOEI Co., Ltd., both acquired and made into consolidated subsidiaries last year, to revitalize existing stores. We also deepened our partnerships by sharing a credit card strategy, expanding joint purchasing, reinforcing cost price negotiating power, and integrating logistics and systems, all in an effort to lower costs.
As a result, we achieved a sixth consecutive year of record-breaking operating income and set a new record for profitability during the fiscal year ended February 2016.

The commitment in our corporate philosophy to support everyone's dreams

Our corporate philosophy begins with "Be number one in customer satisfaction." This is followed by "Be a company with an exciting future" and "Be a company worth working for," which embody our commitment to provide employees with workplaces where they can thrive professionally.
At Izumi, we also have the creed called the "Four Dreams." These dreams include "1. Make customer's lives more convenient and comfortable;" "2. Provide a positive economic impact on local communities and make them more lively; "3. Help tenants to grow further;" and "4. Provide employees with a sense of worth that leads to their personal growth." No matter how the environment may change, the Izumi Group's corporate philosophy remains our unwavering commitment to support everyone's dreams.

Increasing earnings through customer appreciation events planned for our 55th anniversary in the fiscal year ending February 2017

On November 3, 2016, Izumi Co., Ltd. marked its 55th anniversary. We have been holding events across the entire Izumi Group from March to the end of December 2016 commemorating this anniversary and our appreciation to the customers in each community who made this possible. We have also actively rolled out special products commemorating our 55th anniversary, which have helped to boost customer traffic.
As part of our strategy of "good quality, inexpensively," we are reinforcing our ability to propose value-added solutions and lowering the prices of everyday products to effectively address the situation using consumer polarization. We are also focusing efforts on lowering cost price, cutting loss, and holding sales promotion events. This year we newly opened youme Town Tokuyama (Yamaguchi Prefecture) as well as completed a large-scale revitalization of youme Town Chikushino (Fukuoka Prefecture) and expansion of youme Town Saga (Saga Prefecture). Having harnessed our accumulated expertise, these new facilities have received rave reviews as shopping centers tailored to the life needs of three generations thanks to their food offerings, kids' zones, and comfortable spaces.
We are now making progress with improving earnings through a reform program initiated at Super Daiei and Yours, both new consolidated subsidiaries acquired through M&A. We are also building on synergies by centralizing purchasing, logistics, sales promotions, and credit card strategy within the group, including Izumi's Food Division and youme Mart Co., Ltd. (Kumamoto Prefecture).
These efforts are expected to help increase consolidated operating revenue 8.6% year on year to 726,400 million yen and operating income 8.7% year on year to 34,700 million yen during the fiscal year ending February 2017.

Anticipating further growth together with ventures in new business platforms and brands

We will continue to open large-format shopping centers and smaller retail stores in next fiscal year and beyond. In spring 2017, we will open a new business platform and brand called LECT in Nishi Ward, Hiroshima City. With the concepts culture, food, and living, the goal is to make this facility accessible and easy to move around for all shoppers, with the three key tenants of Izumi (food), Cainz (living), and Culture Convenience Club (culture). We will continually expand and revitalize the facility so that it constantly evolves as the number one regional store. We will also pursue M&A to forge partnerships with companies looking to co-exist and co-prosper with communities together with the Izumi Group.

Aiming to become a trillion-yen company worth trusting

Our goal at the Izumi Group is to "Be a trillion-yen company with dreams," but we are also working hard to foster a strong level of trust appropriate to a trillion-yen company. Our hope is to grow together with stakeholders, including creating and maintaining employment, energizing local communities, growing together with business partners, returning profits to shareholders, and protecting our bountiful environment. Compliance and management transparency are also important missions for the Izumi Group.
The Izumi Group will continue to tackle challenges as it meets and exceeds the expectations of its stakeholders. I ask for your continuing support and patronage moving forward.Aiming to become a trillion-yen company worth trusting.