To all of our shareholders, I would like to extend my deepest gratitude for your continued and exceptional level of support.
During the consolidated fiscal year under review, although we were not able to deliver on our initial plan due to factors such as temporary expenses associated with the regular shareholders meeting, we were able to greatly reduce operating losses compared to the previous fiscal period.
Under the new managerial system for the Daidoh Limited Group that was launched in June 2024, we are engaged in the promotion of “Innovation and Evolution,” our medium-term management plan that spans the three-year period ending March 2027. While the future of the business environment remains uncertain, the entire group will continue to work together to implement the “Innovation and Evolution” plan, thereby improving our business results and further raising corporate value.
To all of our shareholders as well, I humbly ask for your ongoing understanding and support in the future.
Status of operations for the current fiscal term (the period ending March 31, 2025)
During the consolidated fiscal year under review (April 1, 2024, through March 31, 2025), the trend of a slow recovery could be seen in the Japanese economy due to factors such as recovery in corporate earnings and improvements in hiring and incomes. On the other hand, concerns about the trajectory of the economy in China as well as international instability led to sharp rises in resource costs, and the future outlook for the business environment remains unclear.
In the apparel industry, healthy inbound demand has driven largely positive developments, but we experienced a challenging environment when higher-than-average temperatures in October and the first half of November delayed sales activity for fall and winter clothing.
For our clothing business, the Brooks Brothers brand of our Japanese retail division saw greatly increased revenues and profits compared to the previous fiscal period, due to the development of products geared toward the Japanese market as well as successful collaborations. On the other hand, the NEWYORKER brand experienced a reduction in earnings compared to the previous fiscal period, which can be attributed to fewer items being sold at regular price due to lingering high temperatures during the transition into autumn.
As for our retail operations in China, we did see larger losses due to sluggish consumer spending, which can be attributed to concerns about the trajectory of the Chinese economy. Even so, we completed the transfer of our full investment holdings in January 2025.
In addition, at our PONTETORTO apparel materials manufacturing subsidiary in Italy, the effects of orders from transactions that were moved forward due to COVID-19 recovery resulted in lower sales and profits compared to the previous fiscal period, with impairment losses on fixed assets being recorded as extraordinary losses.
As for our real estate and leasing business, the Dynacity commercial complex in Odawara saw increased revenue from leasing due to the opening of its West Annex addition. Moreover, increased foot traffic from the opening of this addition positively affected Dynacity as a whole, resulting in increased revenue and profits compared to the previous fiscal period.
Regarding the leasing of office space, the recomposition of our assets related to the sale of our headquarters building in March 2023 was temporarily completed during the previous fiscal period, resulting in leasing revenues coming in throughout the year that led to significantly increased revenue and profits compared to the previous fiscal period.
Furthermore, with respect to full-company revenue and full-company costs that are not allocated to one of the reported segments, the JPY 135 million of special expenses (primarily costs related to activist shareholders) for the regular shareholders meeting held in June 2024 was accounted for as selling, general and administrative expenses.
As a result of the above, the Group posted the following financial results for the current consolidated fiscal year under review: JPY 28,609 million in sales (a decrease of 0.3% compared to the previous fiscal period), JPY 64 million in operating losses (compared to JPY 442 million in operating losses in the previous fiscal period), JPY 233 million in ordinary losses (compared to JPY 336 million in ordinary losses in the previous fiscal period), and JPY 2,927 million in impairment losses that were recorded as extraordinary losses. As a result of these figures, net losses for the current fiscal term attributable to the parent company's shareholders total JPY 2,483 million (compared to JPY 291 million in net profits attributable to the parent company's shareholders in the previous fiscal period).
Medium- to long-term activities
Daidoh Limited is currently promoting “Innovation and Evolution,” our medium-term management plan that spans the three-year period ending March 2027. The fiscal year ending March 2025 was the first year of this medium-term management plan, and saw us take action to resolve negative legacy factors. Specifically, these include the transfer of our retail division in China that did not align with our business strategies, and the sale of non-business-oriented assets. We also sold one of our real-estate properties and recorded impairment losses on fixed assets for PONTETORTO.
Moreover, we have taken steps to evolve our business models in parallel. For Brooks Brothers, one of the focus areas of our business, we believe that we are beginning to truly see the benefits of reforms.
For the fiscal year ending March 2026, in addition to fully resolving negative legacy factors, we are working to further implement reforms in each of our business divisions while looking to the fiscal year ending March 2027. In particular, reforming the structure of PONTETORTO is an urgent concern, as that business is experiencing a temporary slowdown despite being positioned in a promising market. We aim to recover performance for this business as quickly as possible.
Furthermore, with respect to mergers and acquisitions in our medium-term management plan, implementation during the fiscal year ending March 2026 will be done in preparation for discontinuous growth in the fiscal year ending March 2027.
While we have not yet seen the full benefits of our reforms, the entire Daidoh Limited Group continues to work together to achieve the goals of the plan by the end of the fiscal year ending March 2027.
