Paris Miki Holdings | 7455 |

Transcription

R
LAST UPDATE【2016/7/1】
Research Report by Shared Research Inc.
Shared Research Inc. has produced this report by request from the company discussed in the report. The
aim is to provide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide
an accurate, objective, and neutral analysis. In order to highlight any biases, we clearly attribute our data
and findings. We will always present opinions from company management as such. Our views are ours
where stated. We do not try to convince or influence, only inform. We appreciate your suggestions and
feedback. Write to us at sr_inquiries@sharedresearch.jp or find us on Bloomberg.
R
Shared Research Report
INDEX
Key financial data ----------------------------------------------------------------------------------------------------- 3
Recent Updates -------------------------------------------------------------------------------------------------------- 4
Highlights ----------------------------------------------------------------------------------------------------------------------- 4
Trends and outlook --------------------------------------------------------------------------------------------------- 5
Monthly trends ---------------------------------------------------------------------------------------------------------------- 5
Quarterly trends and results----------------------------------------------------------------------------------------------- 6
Full-year company forecasts and medium/long-term outlook ----------------------------------------------- 14
Business ----------------------------------------------------------------------------------------------------------------- 25
Business description ------------------------------------------------------------------------------------------------------- 25
Strengths and weaknesses ----------------------------------------------------------------------------------------------- 32
Market and value chain --------------------------------------------------------------------------------------------------- 34
Strategy ------------------------------------------------------------------------------------------------------------------------ 38
Historical financial statements -----------------------------------------------------------------------------------39
Income statement ---------------------------------------------------------------------------------------------------- 66
Balance sheet----------------------------------------------------------------------------------------------------------------- 67
Statement of cash flows -------------------------------------------------------------------------------------------------- 69
Other information---------------------------------------------------------------------------------------------------- 71
History -------------------------------------------------------------------------------------------------------------------------- 71
News and topics ------------------------------------------------------------------------------------------------------------ 71
Top management----------------------------------------------------------------------------------------------------------- 72
Employees -------------------------------------------------------------------------------------------------------------------- 72
Major shareholders --------------------------------------------------------------------------------------------------------- 73
Investor relations------------------------------------------------------------------------------------------------------------ 73
Company profile ------------------------------------------------------------------------------------------------------------ 74
www.sharedresearch.jp
02/75
R
Paris Miki Holdings ＞ Key financial data
Key financial data
Income Statement
(JPYmn)
Total Sales
YoY
Gross Profit
YoY
GPM
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
Net Margin
Per Share Data (JPY)
Number of Shares ('000)
EPS
Dividend Per Share
Book Value Per Share
Balance Sheet
(JPYmn)
Cash and Equivalents
Inventories
Total Current Assets
Tangible Fixed Assets, net
Intangible Assets
Other Long-Term Assets
Fixed Assets
Total Assets
Accounts Payable
Short-Term Debt
Total Current Liabilities
Long-Term Debt
Total Fixed Liabilities
Total Liabilities
Net Assets
Cash Flow Statement
(JPYmn)
Operating Cash Flow
Investment Cash Flow
Financing Cash Flow
Financial Ratios
Interest-Bearing Debt
Net Cash
ROA
ROE
Equity Ratio
FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17
Cons.
68,011
-1.3%
48,491
-1.9%
71.3%
9,243
-10.3%
13.6%
9,842
-8.5%
14.5%
5,594
20.4%
8.2%
Cons.
66,929
-1.6%
47,405
-2.2%
70.8%
7,033
-23.9%
10.5%
7,692
-21.8%
11.5%
4,324
-22.7%
6.5%
Cons.
63,876
-4.6%
45,370
-4.3%
71.0%
3,881
-44.8%
6.1%
4,500
-41.5%
7.0%
1,906
-55.9%
3.0%
Cons.
57,745
-9.6%
39,759
-12.4%
68.9%
-800
-1.4%
-1,034
-1.8%
-3,204
-5.5%
Cons.
56,299
-2.5%
38,656
-2.8%
68.7%
-543
-1.0%
-172
-0.3%
-233
-0.4%
Cons.
60,140
6.8%
41,725
7.9%
69.4%
1,062
1.8%
1,666
2.8%
473
0.8%
Cons.
59,547
-1.0%
39,795
-4.6%
66.8%
-114
-0.2%
-25
-0.0%
-1,177
-2.0%
Cons.
55,419
-6.9%
37,711
-5.2%
68.0%
427
0.8%
1,066
1.9%
103
0.2%
Cons.
56,903
2.7%
38,488
2.1%
67.6%
808
89.2%
1.4%
1,035
-2.9%
1.8%
419
306.8%
0.7%
Cons.
54,342
-4.5%
37,082
-3.7%
68.2%
175
-78.3%
0.3%
635
-38.6%
1.2%
198
-52.7%
0.4%
Cons.
53,727
-1.1%
36,197
-2.4%
67.4%
269
53.7%
0.5%
174
-72.6%
0.3%
-601
-1.1%
Est.
53,982
0.5%
489
81.8%
0.9%
378
117.2%
0.7%
72
0.1%
52,903
105.7
63.0
1,036
52,950
81.7
63.0
1,055
51,505
37.0
63.0
1,018
51,503
31.5
881
51,498
31.5
847
51,489
9.2
18.0
827
56,057
18.0
781
56,057
2.0
18.0
769
56,057
8.1
18.0
771
56,057
3.9
18.0
764
56,057
-11.7
18.0
729
1.4
18.0
-
26,920
8,338
40,574
7,004
266
17,285
24,556
65,131
30,311
8,535
44,411
7,693
272
14,001
21,967
66,379
24,256
9,381
38,944
7,845
603
13,332
21,782
60,726
18,973
9,791
34,212
7,039
545
11,932
19,517
53,729
17,811
9,185
32,523
7,081
865
11,202
19,150
51,673
20,647
9,993
36,518
6,926
892
10,348
18,167
54,720
19,562
10,244
34,922
6,782
1,166
9,982
17,932
52,854
15,214
9,658
29,854
6,174
1,526
14,523
22,224
52,079
15,507
10,308
31,569
5,646
1,690
14,881
22,219
53,788
16,604
11,034
32,892
5,709
1,606
12,978
20,296
53,187
16,507
10,237
32,461
5,410
1,254
11,941
18,606
51,067
2,543
9,885
420
10,305
54,824
2,311
8
10,088
406
10,495
55,884
2,443
7,712
599
8,311
52,415
2,050
7,899
470
8,369
45,359
1,794
7,432
637
8,070
43,602
1,656
1,832
8,679
2,500
3,435
12,114
42,606
1,474
5,256
11,502
923
12,425
40,428
1,570
1,382
7,417
4,000
4,827
12,244
39,834
1,852
1,664
8,915
4,000
4,869
13,785
40,003
1,896
5,988
12,046
600
1,467
13,514
39,673
1,803
5,751
11,425
1,066
1,830
13,256
37,811
7,436
-478
-2,456
4,676
1,642
-3,250
1,390
-1,621
-5,666
-589
1,195
-2,438
2,156
-1,643
-1,694
1,035
-11,088
2,929
479
-421
-151
2,428
-2,207
-958
2,065
-137
-806
175
2,876
-149
1,095
-1,360
-694
26,920
15.5%
10.6%
83.9%
8
30,303
11.7%
7.8%
83.9%
24,256
7.1%
3.5%
85.8%
18,973
-1.8%
-6.6%
84.0%
17,811
-0.3%
-0.5%
83.9%
4,332
16,315
3.1%
1.1%
77.4%
5,256
14,306
-0.0%
-2.9%
76.1%
5,382
14,832
2.0%
0.3%
76.0%
5,664
11,843
2.0%
1.1%
73.8%
6,588
13,016
1.2%
0.5%
73.9%
6,817
11,690
0.3%
-1.6%
73.5%
Source: Shared Research based on company data
Figures may differ from company materials due to differences in rounding methods.
03/75
R
Paris Miki Holdings ＞ Recent Updates
Recent Updates
Highlights
On July 1, 2016, Paris Miki Holdings Inc. announced June 2016 sales figures; see the monthly trends section for details.
On June 6, 2016, Shared Research updated the report following interviews with the company.
On June 1, 2016, the company announced May 2016 sales figures.
On May 13, 2016, the company announced earnings results for Full-Year FY03/16; see the results section for details.
On May 9, 2016, the company revised its full-year forecasts for FY03/16.
Reasons for the revisions
The company expects sales to fall behind initial forecasts despite efforts to close unprofitable stores and renovate existing
stores, because customer footfall was not able to recover following the consumption tax hike in 2014. It lowered its
operating profit forecast, as the lower SG&A expenses (in line with lower sales) will likely be insufficient to cover the
missed sales forecast. In addition, the company booked a forex loss of JPY200mn, so recurring profit and net income
attributable to parent company shareholders were also revised down.
The forex loss comes from forex valuations of assets denominated in foreign currencies as of March 31, 2016. The
company left its year-end dividend forecasts (JPY9 per share) unchanged.
Earnings forecasts
Earnings forecasts
(JPYmn)
Sales
YoY
CoGS
Gross Profit
YoY
GPM
SG&A expenses
SG&A/Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
FY03/14
FY03/15
1H
2H
1H
29,374 27,529
28,232
0.8%
4.8%
-3.9%
9,595
8,819
8,900
19,779 18,709
19,332
0.0%
4.3%
-2.3%
67.3% 68.0%
68.5%
18,657 19,023
18,412
63.5% 69.1%
65.2%
1,122
-314
920
16.1%
- -18.0%
3.8% -1.1%
3.3%
1,260
-225
1,067
18.5%
- -15.3%
4.3% -0.8%
3.8%
863
-444
534
191.6%
- -38.1%
FY03/16
2H 1H Act. 2H Est.
26,110 28,185 25,542
-5.2%
-0.2%
-2.2%
8,360
9,052
17,750 19,133
-5.1%
-1.0%
68.0% 67.9%
18,494 17,904
70.8% 63.5%
-745
1,228
-959
- 33.5%
-2.9%
4.4%
-3.8%
-432
1,159
-985
8.6%
-1.7%
4.1%
-3.9%
-336
518
-1,119
-3.0%
-
FY03/14 FY03/15 FY03/16
FY
FY New Est. Old Est. Change
56,903
54,342
53,727
54,958
-1,231
2.7%
-4.5%
-1.1%
1.1%
18,414
17,260
- 17,822
38,488
37,082
- 37,136
2.1%
-3.7%
0.1%
67.6%
68.2%
67.6%
37,680
36,906
- 36,192
66.2%
67.9%
65.9%
808
175
269
943
-674
89.2% -78.3%
53.7% 438.9%
1.4%
0.3%
0.5%
1.7%
1,035
635
174
1,105
-931
-2.9% -38.6% -72.6%
74.0%
1.8%
1.2%
0.3%
2.0%
419
198
-601
500
-1,101
306.8% -52.7%
- 152.5%
-
On May 2, 2016, the company announced April 2016 sales figures.
For corporate releases and developments more than three months old, see the News and topics section.
04/75
R
Paris Miki Holdings ＞ Trends and outlook
Trends and outlook
Monthly trends
Monthly comparable-store sales
Existing Stores
Apr
FY03/11
-4.1%
FY03/12
3.6%
FY03/13
-5.5%
FY03/14
-4.2%
FY03/15
5.5%
FY03/16
-8.5%
FY03/17
-6.7%
May
-3.4%
2.7%
-6.6%
-2.1%
-6.2%
5.9%
-8.9%
Jun
3.4%
-0.2%
-4.9%
-0.5%
-4.4%
1.7%
-7.0%
Jul
3.2%
1.2%
-12.7%
4.8%
-8.4%
1.6%
Aug
2.7%
-1.6%
-13.9%
3.7%
-4.9%
2.2%
Sep
3.1%
-2.7%
-5.1%
-0.9%
-0.9%
-3.0%
Oct
6.7%
-2.7%
-7.4%
-1.0%
-3.9%
5.1%
Nov
4.3%
-1.3%
-10.8%
5.8%
1.9%
-1.6%
Dec
4.2%
-4.1%
-10.8%
5.1%
-6.3%
1.7%
Jan
0.1%
-2.7%
-11.7%
4.0%
-3.8%
-0.6%
Feb
3.3%
-7.7%
-1.3%
-1.6%
4.0%
-2.6%
Mar
0.7%
7.1%
-4.1%
19.5%
-18.3%
-8.3%
Aug
9.9%
-2.6%
-14.2%
0.5%
-6.4%
1.0%
Sep
10.2%
-4.2%
-5.7%
-4.7%
-2.2%
-4.0%
Oct
13.6%
-3.5%
-7.6%
-5.0%
-4.8%
4.3%
Nov
10.6%
-1.7%
-11.1%
1.9%
0.8%
-2.9%
Dec
9.2%
-4.6%
-11.6%
1.8%
-7.2%
0.5%
Jan
5.3%
-2.9%
-12.8%
1.1%
-4.9%
-1.8%
Feb
5.2%
-8.3%
-3.6%
-4.2%
2.6%
-3.5%
Mar
-2.2%
6.4%
-7.0%
17.9%
-19.4%
-9.2%
Monthly all-store sales
All Stores
FY03/11
FY03/12
FY03/13
FY03/14
FY03/15
FY03/16
FY03/17
Apr
1.0%
2.3%
-5.7%
-7.5%
4.2%
-9.1%
-7.2%
May
3.3%
2.4%
-6.7%
-5.3%
-7.5%
5.1%
-9.4%
Jun
10.2%
-1.3%
-5.3%
-3.8%
-5.7%
0.4%
-7.2%
Jul
10.3%
-0.2%
-13.2%
1.8%
-9.8%
0.6%
05/75
R
Quarterly trends and results
Quarterly Performance
(JPYmn)
Sales
YoY
Gross Profit
YoY
GPM
SG&A Expenses
YoY
SG&A / Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
NPM
Comparable store sales growth
Inventory
Products
Net cash
FY03/14
Q1
Q2
Q3
14,121 15,253 13,910
-2.3%
3.9%
2.3%
9,529 10,250
9,324
-2.4%
2.4%
4.9%
67.5% 67.2% 67.0%
9,325
9,332
9,314
0.1%
-1.6%
-0.9%
66.0% 61.2% 67.0%
203
919
9
-53.9% 74.7%
6.0%
0.1%
1.4%
302
958
67
-32.4% 55.5%
2.1%
6.3%
0.5%
263
600
32
174.0% 200.0%
1.9%
3.9%
0.2%
-2.3%
2.4%
3.2%
10,214 10,021 10,467
9,458
9,191
9,624
12,180 13,370 11,655
Q4
Q1
13,619 13,873
7.4%
-1.8%
9,385
9,547
3.7%
0.2%
68.9% 68.8%
9,709
9,082
6.9%
-2.6%
71.3% 65.5%
-323
465
- 129.1%
-2.4%
3.4%
-292
532
- 76.2%
-2.1%
3.8%
-476
227
- -13.7%
-3.5%
1.6%
8.2%
-2.0%
10,308 10,604
9,403
9,651
11,843 11,396
Performance Breakdown
(JPYmn)
Sales
Domestic segment
Overseas segment
YoY
Domestic segment
Overseas segment
FY03/14
Q1
14,121
12,389
1,830
-2.3%
-5.3%
26.5%
Q2
15,253
13,341
2,019
3.9%
0.1%
38.9%
Q3
13,910
11,973
2,012
2.3%
-1.6%
33.9%
Q4
13,619
11,869
1,823
7.4%
5.6%
18.0%
FY03/15
Q1
13,873
11,986
1,989
-1.8%
-3.3%
8.7%
Q2
14,359
12,548
1,893
-5.9%
-5.9%
-6.2%
Q3
13,380
11,529
1,939
-3.8%
-3.7%
-3.6%
Q4
12,730
10,899
1,937
-6.5%
-8.2%
6.3%
FY03/16
Q1
13,822
11,974
2,003
-0.4%
-0.1%
0.7%
Q2
14,363
12,360
2,103
0.0%
-1.5%
11.1%
Q3
13,348
11,560
1,898
-0.2%
0.3%
-2.1%
Q4
12,194
10,100
1,729
-4.2%
-7.3%
-10.7%
Domestic sales
Frames
Lenses
Sunglasses
Contact lenses
Hearing aids
Other
12,817
3,967
5,562
694
393
1,462
736
13,720
4,223
5,971
869
404
1,504
750
12,324
3,926
5,516
267
357
1,490
766
12,311
4,110
5,741
349
383
1,234
495
12,422
3,854
5,574
732
289
1,416
553
12,863
3,983
5,789
747
307
1,467
570
11,827
3,778
5,279
268
297
1,502
704
11,186
3,658
5,084
352
275
1,274
542
12,244
3,715
5,451
773
264
1,469
569
12,761
3,802
5,664
793
269
1,473
760
11,903
3,625
5,266
307
264
1,548
894
YoY
Frames
Lenses
Sunglasses
Contact lenses
Hearing aids
Other
-5.5%
-9.9%
-8.2%
16.2%
-15.8%
9.8%
5.4%
-0.8%
-2.9%
-3.7%
12.0%
-14.9%
11.6%
10.1%
-0.5%
-1.5%
1.6%
3.5%
-21.0%
6.0%
-9.9%
6.1%
7.3%
9.4%
10.8%
-5.4%
2.9%
-19.1%
-3.1%
-2.8%
0.2%
5.5%
-26.5%
-3.1%
-24.9%
-6.2%
-5.7%
-3.0%
-14.0%
-24.0%
-2.5%
-24.0%
-4.0%
-3.8%
-4.3%
0.4%
-16.8%
0.8%
-8.1%
-9.1%
-11.0%
-11.4%
0.9%
-28.2%
3.2%
9.5%
-1.4%
-3.6%
-2.2%
5.6%
-8.7%
3.7%
2.9%
-0.8%
-4.5%
-2.2%
6.2%
-12.4%
0.4%
33.3%
1,304
46.5%
1,533
78.5%
1,586
30.9%
1,308
21.3%
1,451
11.3%
1,496
-2.4%
1,553
-2.1%
1,544
18.0%
1,578
8.8%
SG&A expenses
Sales promotion
Advertising promotion
Personnel
Rent
Depreciation
Others
YoY
Sales promotion
Personnel
Rent
Depreciation
Others
9,325
665
418
4,487
2,392
293
1,070
0.1%
3.3%
154.9%
-2.3%
-3.7%
-7.3%
-4.5%
9,332
690
317
4,483
2,465
311
1,066
-1.6%
7.6%
210.8%
-3.1%
-3.3%
-14.1%
-11.3%
9,314
682
350
4,434
2,404
321
1,123
-0.9%
-2.7%
109.6%
-2.3%
-1.8%
-5.9%
-6.7%
9,709
654
328
4,879
2,410
325
1,113
6.9%
7.7%
54.7%
10.5%
-0.2%
-8.7%
3.7%
9,082
647
265
4,476
2,355
280
1,059
-2.6%
-2.7%
-36.6%
-0.2%
-1.5%
-4.4%
-1.0%
9,330
695
302
4,445
2,402
286
1,200
-0.0%
0.7%
-4.7%
-0.8%
-2.6%
-8.0%
12.6%
9,239
701
345
4,416
2,356
284
1,137
-0.8%
2.8%
-1.4%
-0.4%
-2.0%
-11.5%
1.2%
9,255
523
234
4,675
2,339
289
1,195
-4.7%
-20.0%
-28.7%
-4.2%
-2.9%
-11.1%
7.4%
Operating profit
Domestic segment
Overseas segment
YoY
Domestic segment
203
220
-16
-53.9%
-59.2%
919
904
16
74.7%
58.3%
9
-10
18
-
-323
465
-251
433
-121
31
- 129.1%
96.8%
455
525
-66
-50.5%
-41.9%
-204
-143
-60
-
887
1
-1
877
877
4
-4
867
2
-12
860
-10
-7
858
1
-3
Tenant
Built-in
Suburbs
342
104
441
336
103
438
339
100
438
338
97
432
334
97
429
Franchise
Kinpodo
OPTIQUE
Directly managed
129
25
71
662
127
25
71
654
126
25
72
654
124
25
70
648
-5.5%
-2.3%
-0.8%
2.4%
-0.5%
3.2%
194
3
177
8
6
107
1
-2
195
3
178
8
6
106
194
3
177
8
6
103
-1
-3
Difference
YoY
Store count (Domestic)
Openings
Closings
Sales comp. (all stores)
Sales comp. (comparable stores)
Store count (overseas)
Europe
Asia
Oceania
America
China
Openings
Closings
FY03/15
Q2
Q3
14,359 13,380
-5.9%
-3.8%
9,785
9,035
-4.5%
-3.1%
68.1% 67.5%
9,330
9,239
-0.0%
-0.8%
65.0% 69.1%
455
-204
-50.5%
3.2%
-1.5%
535
0
-44.2%
3.7%
0.0%
307
208
-48.8% 550.0%
2.1%
1.6%
-5.1%
-3.2%
10,553 11,177
9,586 10,140
11,348 12,931
Q4
12,730
-6.5%
8,715
-7.1%
68.5%
9,255
-4.7%
72.7%
-541
-4.2%
-432
-3.4%
-544
-4.3%
-8.1%
11,035
10,044
13,016
Q1
13,822
-0.4%
9,500
-0.5%
68.7%
8,870
-2.3%
64.2%
630
35.5%
4.6%
686
28.9%
5.0%
323
42.3%
2.3%
-0.5%
11,152
10,092
12,964
FY03/16
Q2
Q3
14,363 13,348
0.0% -0.2%
9,633 8,912
-1.6% -1.4%
67.1% 66.8%
9,034 8,964
-3.2% -3.0%
62.9% 67.2%
598
-52
31.4%
4.2% -0.4%
473
-36
-11.6%
3.3% -0.3%
195
-122
-36.5%
1.4% -0.9%
0.2%
1.9%
11,143 11,539
10,037 10,356
12,993 12,323
Q4
12,194
-4.2%
8,152
-6.5%
66.9%
9,060
-2.1%
74.3%
-907
-7.4%
-949
-7.8%
-997
-8.2%
-4.2%
11,375
10,237
11,690
FY03/16
FY03/17
% of FY Init. Est. Init. Est.
97.8%
97.5%
99.3%
28.5%
15.7%
-120.2%
FY03/14
54,958 53,982
1.1%
0.5%
37,136 36,469
0.1%
0.8%
67.6% 67.6%
36,192 35,979
-1.9%
0.1%
65.9% 66.6%
943
489
438.9% 81.8%
1.7%
0.9%
1,105
378
74.0% 117.2%
2.0%
0.7%
500
72
152.5%
0.9%
0.1%
0.5%
FY03/15
FY03/16
56,903
49,380
7,522
2.7%
-0.5%
29.8%
54,342
46,725
7,617
-4.5%
-5.4%
1.3%
53,727
45,994
7,733
-1.1%
-1.6%
1.5%
10,610
3,359
4,792
349
240
1,252
617
51,172
16,226
22,790
2,179
1,537
5,690
2,747
48,298
15,273
21,726
2,099
1,168
5,659
2,369
47,518
14,501
21,173
2,222
1,037
5,742
2,840
0.6%
-4.0%
-0.2%
14.6%
-11.1%
3.1%
27.0%
-5.1%
-8.2%
-5.7%
-0.9%
-12.7%
-1.7%
13.8%
-0.4%
-2.1%
-0.6%
12.0%
-14.6%
7.7%
-3.3%
-5.6%
-5.9%
-4.7%
-3.7%
-24.0%
-0.5%
-13.8%
-1.6%
-5.1%
-2.5%
5.9%
-11.2%
1.5%
19.9%
1,602
7.1%
1,445
-7.0%
1,584
2.6%
5,731
41.9%
6,044
5.5%
6,209
2.7%
8,870
610
184
4,372
2,354
257
1,093
-2.3%
-5.7%
-30.6%
-2.3%
-0.0%
-8.2%
3.2%
9,034
645
209
4,452
2,376
273
1,079
-3.2%
-7.2%
-30.8%
0.2%
-1.1%
-4.5%
-10.1%
8,964
686
307
4,313
2,315
303
1,040
-3.0%
-2.1%
-11.0%
-2.3%
-1.7%
6.7%
-8.5%
9,060
513
298
4,565
2,247
330
1,107
-2.1%
-1.9%
27.4%
-2.4%
-3.9%
14.2%
-7.4%
37,680
2,691
1,413
18,283
9,671
1,250
4,372
1.1%
3.8%
119.1%
0.6%
-2.3%
-9.1%
-4.9%
36,906
2,566
1,146
18,012
9,452
1,139
4,591
-2.1%
-4.6%
-18.9%
-1.5%
-2.3%
-8.9%
5.0%
35,928
2,454
998
17,702
9,292
1,163
4,319
-2.6%
-4.4%
-12.9%
-1.7%
-1.7%
2.1%
-5.9%
-541
-440
-112
-
630
704
-0
35.5%
62.6%
598
668
-70
31.4%
27.2%
-52
40
-93
-
-907
-816
-96
-
808
863
-103
89.2%
13.0%
175
375
-207
-78.3%
-56.5%
269
596
-259
53.7%
58.9%
854
7
-11
846
3
-11
840
2
-8
836
4
-8
832
5
-9
822
1
-11
867
7
-27
846
11
-32
822
12
-36
334
97
427
335
98
421
328
98
420
323
98
419
321
98
417
321
96
415
316
96
410
338
97
432
328
98
420
316
96
410
122
25
69
644
120
26
71
641
119
26
74
635
116
26
75
629
115
26
73
626
115
24
73
624
115
24
72
621
115
24
72
611
124
25
70
648
116
26
75
629
115
24
72
611
6.1%
8.2%
-3.1%
-2.0%
-6.2%
-5.1%
-4.0%
-3.2%
-9.1%
-8.1%
-1.4%
-0.5%
-0.8%
0.2%
0.6%
1.9%
-5.1%
-4.2%
-0.4%
2.7%
-5.6%
-4.5%
-1.6%
-0.6%
191
3
174
8
6
100
1
-4
191
3
174
8
6
100
186
3
170
7
6
96
1
-5
184
3
167
8
6
90
185
3
168
8
6
87
1
-4
179
3
162
8
6
83
-4
173
3
157
7
6
79
2
-6
168
3
152
7
6
75
-4
167
1
151
7
6
73
1
-3
191
3
174
8
6
100
2
-10
185
3
168
8
6
87
2
-15
167
1
151
7
6
73
3
-17
-6
06/75
R
Full-Year Performance
(JPYmn)
Sales
YoY
Gross Profit
YoY
GPM
SG&A Expenses
YoY
SG&A / Sales
Operating Profit
YoY
OPM
Recurring Profit
YoY
RPM
Net Income
YoY
NPM
Comparable store sales growth
Inventory
Net cash
FY Performance Breakdown
(JPYmn)
Sales
Domestic segment
Overseas segment
YoY
Domestic segment
Overseas segment
Domestic sales
Frames
Lenses
Sunglasses
Contact lenses
Hearing aids
Other
YoY
Frames
Lenses
Sunglasses
Contact lenses
Hearing aids
Other
Difference
YoY
SG&A expenses
Personnel
Depreciation
Rent
Sales promotion
Others
YoY
Personnel
Depreciation
Rent
Sales promotion
Others
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
68,922 68,011 66,929 63,876 57,745 56,299 60,140 59,547 55,419 56,903 54,342 53,727
- 57,207 51,615 49,971 54,045 53,613 49,622 49,380 46,725 45,994
6,328
6,094
5,934
5,797
7,522
7,617
7,733
6,130
6,668
-6.9%
2.7%
-4.5%
-1.1%
6.8%
-1.0%
-2.5%
0.2%
-1.3%
-1.6%
-4.6%
-9.6%
-5.4%
-1.6%
-7.4%
-0.5%
8.2%
-0.8%
-9.8%
-3.2%
1.5%
1.3%
-2.3%
29.8%
-8.1%
3.2%
-3.7%
-2.6%
68,454 67,201 65,422 61,406 55,470 53,360 57,202 56,368 51,380 51,172 48,298 47,518
23,045 22,294 21,628 19,958 17,680 17,201 18,410 17,996 16,569 16,226 15,273 14,501
33,345 33,383 32,944 30,288 27,407 25,869 27,360 26,521 22,936 22,790 21,726 21,173
1,946
2,179
2,099
1,797
2,222
1,645
1,509
1,851
2,266
1,961
1,608
1,752
2,812
2,449
2,285
2,280
2,074
1,799
1,537
1,168
1,037
3,288
3,013
3,491
5,285
5,690
5,119
5,659
5,742
4,299
4,719
3,606
3,895
4,120
2,997
3,389
2,841
2,747
2,578
2,858
2,369
2,840
2,166
2,195
2,621
2,698
3,307
2,886
-8.8%
-0.4%
-5.6%
-1.6%
7.2%
-1.5%
-6.1%
-9.7%
-3.8%
2.5%
-1.8%
-2.6%
-2.7%
-5.1%
-7.7% -11.4%
7.0%
-2.2%
-7.9%
-2.1%
-5.9%
-3.3%
-3.0%
4.5%
-0.6%
-3.1% -13.5%
-4.7%
-2.5%
-9.5%
-5.6%
5.8%
-1.3%
-8.1%
3.4%
0.1%
9.0%
-6.1%
-8.3%
5.9%
22.7%
-2.9%
8.3%
12.0%
-3.7%
-8.2% -13.5% -18.0%
-0.2%
-9.0% -13.3% -14.6% -24.0% -11.2%
-6.7% -12.9%
-6.7%
-7.1%
-5.8%
-8.4%
-0.5%
1.5%
6.4%
8.0%
5.8%
4.3%
9.8%
8.5%
3.2%
7.7%
14.8%
13.1%
10.9%
-0.6%
-3.3% -13.8%
19.9%
1.3%
17.4%
-9.2%
2.9% -19.7%
-8.8% -12.7%
6,209
1,507
2,470
2,275
2,939
2,938
3,179
4,039
5,731
6,044
810
468
-0.0%
8.2%
27.1%
29.2%
41.9%
5.5%
2.7%
73.3%
86.0%
63.9%
-7.9%
-76.8%
39,134 39,248 40,372 41,488 40,559 39,199 40,663 39,910 37,283 37,680 36,906 35,928
2,454
2,593
2,691
2,566
3,123
3,200
2,880
2,617
2,747
2,667
2,937
3,046
1,441
645
1,413
1,146
998
1,115
1,366
1,522
1,556
1,337
1,418
1,428
20,552 20,616 21,115 21,602 21,086 20,353 20,723 19,935 18,177 18,283 18,012 17,702
9,699
9,682
9,894
9,671
9,452
9,292
8,785
8,736
8,882
8,341
8,266
8,382
1,375
1,250
1,139
1,163
1,447
1,503
1,308
1,401
1,339
1,251
1,182
1,225
4,846
4,599
4,372
4,591
4,319
4,710
5,412
5,088
4,832
4,483
4,756
4,635
3.7%
-1.9%
-6.6%
1.1%
-2.1%
-2.6%
0.3%
2.9%
2.8%
-2.2%
-3.4%
-3.8%
3.8%
-4.6%
-4.4%
-9.1%
5.0%
-2.9%
-2.8%
-4.0%
3.7%
2.5%
2.5% -10.0%
7.8% -55.2% 119.1% -18.9% -12.9%
0.7% -21.9%
22.5%
11.4%
2.2% -14.1%
0.5%
-1.5%
-1.7%
-3.5%
1.8%
-3.8%
-8.8%
0.6%
2.4%
2.3%
-2.4%
-3.9%
0.3%
1.7%
9.2%
-0.2%
2.2%
-2.3%
-2.3%
-1.7%
-5.2%
-0.9%
1.4%
4.8%
-0.6%
2.7%
-9.1%
-8.9%
2.1%
3.6%
18.1%
3.9% -13.0%
7.1%
-4.4%
-13.5%
-5.5%
1.9%
-5.1%
-4.9%
5.0%
-5.9%
1.6%
14.9%
-6.0%
-5.0%
-7.2%
6.1%
1.2%
-
68,796
-7.1%
49,693
-8.1%
72.2%
40,674
-11.8%
59.1%
9,019
13.7%
13.1%
9,501
10.6%
13.8%
5,231
113.6%
7.6%
-7.1%
10,483
22,660
68,922
0.2%
49,434
-0.5%
71.7%
39,134
-3.8%
56.8%
10,300
14.2%
14.9%
10,761
13.3%
15.6%
4,648
-11.1%
6.7%
1.9%
8,851
22,084
68,011
-1.3%
48,491
-1.9%
71.3%
39,248
0.3%
57.7%
9,243
-10.3%
13.6%
9,842
-8.5%
14.5%
5,594
20.4%
8.2%
-2.4%
8,338
26,920
66,929
-1.6%
47,405
-2.2%
70.8%
40,372
2.9%
60.3%
7,033
-23.9%
10.5%
7,692
-21.8%
11.5%
4,324
-22.7%
6.5%
-3.0%
8,535
30,303
63,876
-4.6%
45,370
-4.3%
71.0%
41,488
2.8%
65.0%
3,881
-44.8%
6.1%
4,500
-41.5%
7.0%
1,906
-55.9%
3.0%
-7.5%
9,381
24,256
57,745
-9.6%
39,759
-12.4%
68.9%
40,559
-2.2%
70.2%
-800
-1.4%
-1,034
-1.8%
-3,204
-5.5%
-9.6%
9,791
18,973
56,299
-2.5%
38,656
-2.8%
68.7%
39,199
-3.4%
69.6%
-543
-1.0%
-172
-0.3%
-233
-0.4%
-4.5%
9,185
17,811
Operating profit
10,300
9,243
7,033
3,881
-800
-543
1,062
Domestic segment
Overseas segment
Adjustment
YoY
Domestic segment
Depreciation
Domestic segment
Overseas segment
Change in fixed assets
Domestic segment
Overseas segment
Domestic store count
Openings
Closings
Tenant
Built-in
Suburbs
Franchise
Kimpo-do
OPTIQUE
Directly managed
Sales YoY (all stores)
Sales YoY (comp. stores)
Overseas store count
Europe
Asia
Oceania
The US
China
Openings
Closings
14.2%
1,306
1,041
28
-24
363
160
518
166
875
2.5%
1.9%
188
5
148
26
9
107
31
-13
-10.3%
1,246
1,055
45
-31
369
163
523
178
877
-1.8%
-2.4%
200
4
157
31
8
114
15
-8
-23.9%
1,274
1,052
26
-29
371
159
522
168
884
-2.6%
-3.0%
223
4
181
32
6
138
28
-4
3,838
29
13
-44.8%
1,505
1,047
25
-30
369
154
524
162
885
-6.1%
-7.5%
241
5
199
31
6
156
24
-6
-660
-183
43
1,510
1,020
34
-61
363
140
517
153
867
-9.7%
-9.6%
235
5
197
27
6
150
5
-11
-398
-328
183
1,402
989
50
-81
380
118
491
145
24
820
-3.8%
-4.5%
237
5
204
22
6
150
7
-7
1,426
-319
-44
1,401
1,260
141
1,601
1,483
118
954
13
-48
367
113
474
142
24
66
722
7.2%
1.9%
222
4
196
16
6
140
11
-21
60,140
6.8%
41,725
7.9%
69.4%
40,663
3.7%
67.6%
1,062
1.8%
1,666
2.8%
473
0.8%
1.9%
9,993
16,315
59,547
-1.0%
39,795
-4.6%
66.8%
39,910
-1.9%
67.0%
-114
-0.2%
-25
-0.0%
-1,177
-2.0%
-0.7%
10,244
14,306
55,419
-6.9%
37,711
-5.2%
68.0%
37,283
-6.6%
67.3%
427
0.8%
1,066
1.9%
103
0.2%
-8.1%
9,658
14,832
56,903
2.7%
38,488
2.1%
67.6%
37,680
1.1%
66.2%
808
89.2%
1.4%
1,035
-2.9%
1.8%
419
306.8%
0.7%
2.7%
10,308
11,843
54,342
-4.5%
37,082
-3.7%
68.2%
36,906
-2.1%
67.9%
175
-78.3%
0.3%
635
-38.6%
1.2%
198
-52.7%
0.4%
-4.5%
11,034
13,016
427
808
175
269
181
764
-360
-345
49
23
-87.3% 322.1%
1,351
1,384
1,213
1,254
137
130
1,543
1,921
1,792
1,433
128
109
949
887
21
7
-69
-26
372
342
110
104
441
467
134
129
24
25
60
72
731
661
-1.5%
-8.8%
-0.7%
-8.1%
210
197
4
3
188
179
12
9
6
6
119
108
9
9
-30
-20
863
-103
47
89.2%
13.0%
1,260
1,130
130
1,236
1,091
145
867
7
-27
338
97
432
124
25
70
648
-0.4%
2.7%
191
3
174
8
6
100
2
-10
375
-207
7
-78.3%
-56.5%
1,153
1,009
143
1,382
969
412
846
11
-32
328
98
420
116
26
75
629
-5.6%
-4.5%
185
3
168
8
6
87
2
-15
596
-259
-66
53.7%
58.9%
1,200
1,123
176
876
631
245
822
12
-36
316
96
410
115
24
72
611
-1.6%
-0.6%
167
1
151
7
6
73
3
-17
-114
FY03/16 FY03/17
Est.
53,727 53,982
-1.1%
0.5%
36,197 36,469
-2.4%
0.8%
67.4% 67.6%
35,928 35,979
0.1%
-2.6%
66.9% 66.6%
269
489
53.7% 81.8%
0.5%
0.9%
174
378
-72.6% 117.2%
0.3%
0.7%
-601
72
-1.1%
0.1%
-0.6%
0.8%
10,237
11,690
-
Diff.
255
272
51
220
204
673
-
07/75
R
Full-year FY03/16 results (out May 13, 2016)
▶
FY03/16: Operating profit at domestic segment up on cuts in SG&A expenses, smaller decline in same-store sales;
consolidated operating profit also finishes higher despite growing losses overseas
▶
FY03/16: Same-store sales decline 0.6% YoY versus plan of +0.5%; overseas segment also finishes below plan as losses
grow
▶
Organizational restructuring: Clarify role of holding company; holding company to focus on new businesses and
investment while core subsidiary Miki manages domestic eyewear business
▶
Miki's new president: Track record includes turnaround of Australian subsidiary, revitalization of Shibuya store; willing
to take risks as embarks on course targeting future growth
▶
Holding company: Having understood the direction of growth at domestic eyewear business, will invest in medical
businesses will eye on future growth
Quarterly sales
Quarterly operating profit
Earnings overview
Though overseas losses expanded, domestic profits improved, supporting consolidated results; recovery of existing stores and
less SG&A expenses contributed
In full-year FY03/16, sales were JPY53.7bn (-1.1% YoY) and operating profit JPY269mn (+53.3% YoY or +JPY444mn).
Domestic businesses increased operating profit by JPY224mn due to recovery of existing store sales and cuts in SG&A
expenses, but overseas businesses were sluggish, especially in Korea. As a result, operating loss widened JPY52mn from a
year earlier.
08/75
R
According to the company, it has been proceeding with its plan to close and consolidate unprofitable stores, along with
focusing on actively renovating existing stores as the need arises in order to give them distinct formats. By doing so, it
made efforts to increase the number of baby boomers and second generation baby boomers visiting its stores. Still,
customer visits post consumption tax hike remain sluggish, forcing the company to miss initial estimates (the company
revised down estimates on May 9, 2016).
Operating profit benefits from closures of stores, and efforts to hold SG&A and advertising expenses in check
Gross profit declined by JPY885mn YoY on a 0.9pp worsening of the CoGS-to-sales ratio. However, an overall effort to
curb SG&A expenses through store closures and curbing advertising expenses gave operating profit a JPY94mn increase.
Advertising and SG&A expenses were kept in check through cost-effectiveness analysis.
Main subsidiary Miki appoints manager of successful rollout of Belle Epoque format stores as new president
The group's main subsidiary, Miki, in February 2016 announced the appointment of a new president and new directors
along with the assignment of existing directors to new positions (effective February 8, 2016). The new appointments are
of particular significance given 1) the high level of expectations surrounding the new president of subsidiary Miki, and 2)
the fact that this will be the first time that a board member of Paris Miki Holdings will not be serving concurrently on the
board of the main subsidiary. The appointment of a new president was carried out in line with the company's initial
promotion plans, as the former president of Miki (Hiroshi Tane, President and Representative Director of Paris Miki
Holdings) had originally intended to step down as head of subsidiary Miki within one year after he assumed the position
in June 2015.
The new Miki president, Masahiro Sawada, has managed major store locations in Shibuya and elsewhere Japan, managed
overseas subsidiaries, and was also the MD supervisor who oversaw the successful renovation of Belle Epoque format
stores in FY03/16. Shared Research believes the new president can be counted on to aggressively implement more
measures aimed at revitalizing Miki's existing store base going forward.
Company plans for FY03/17
For FY03/17, the company estimates sales to grow 0.5% YoY (0.8% YoY for domestic comparable stores), and operating
profit to grow 81.6% YoY, or up by JPY220mn.
Toward FY03/17, Shared Research sees the new president pushing ahead with the efforts to revitalize existing stores and
develop new stores that better appeal to second-wave baby boomers (those born in the early 1970s). As part of this
effort, the company is working to revitalize its organizational structure through the promotion of a younger generation of
managers, including the leader of the store format development team. The company had previously classified its store
formats into four different types but is now planning to add three new types. The new formats are still in the
trial-and-error stage of development, but we will be keeping a close eye on progress under the new format development
team leader going forward.
The company plans to open 20 new stores, while closing 20 mainly unprofitable stores in FY03/17. For new store
candidates, the company puts emphasis on cities with large populations but few stores, planning mainly for stores in
shopping centers as well as stand-alone stores along roads with heavy traffic. We see that it is growing emphasis on store
development, and there is a chance it will adopt more aggressive store opening plans.
As for SG&A expenses, thus far the company has been working to control spending through various means in addition to
09/75
R
closing stores. However, there is a chance the company will now shift tactics and do more upfront spending in key areas.
Shared Research will be watching closely for developments on this front.
Overseas subsidiaries
Overseas, the company is closing unprofitable stores in areas with a difficult outlook, while considering aggressive
expansion in areas with solid business and new areas. Visibility in South Korea is poor, but the company seems to be
expecting favorable results from operations in Singapore and other Southeast Asian countries. Having achieved market
penetration, operations in Thailand now have a stable earnings base; the company is also close to turning a profit in
FY03/17 in Vietnam, where it also operates a hospital. Operations in Australia are expected to remain in the red but the
company expects losses to continue to narrow.
Domestic sales by product and consolidated GPM
SG&A expenses
Inventory assets
10/75
R
Japan
Domestic segment performance
Domestic year-on-year sales
Domestic sales by product (all stores, retail)
Unit prices
(JPY)
Average Eyeglass Unit Price
excl. OPTIQUE PARIS MIKI
OPTIQUE PARIS MIKI
YoY
All stores
OPTIQUE PARIS MIKI
Number of Eyeglasses Unit Sales (YoY)
Number of Customers Counted (YoY)
FY03/03 FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
34,295
34,515
34,722
34,160
33,334
33,372
31,099
28,114
29,873
27,535
29,407
32,410
32,493
32,304
38,176
38,117
38,055
37,670
37,153
36,945
34,176
31,037
33,970
31,033
34,663
38,236
38,463
38,506
8,286
8,824
9,207
9,187
9,574
9,936
10,068
10,005
11,967
11,246
12,160
13,235
13,676
13,949
-6.7%
0.6%
0.6%
-1.6%
-2.4%
0.1%
-6.8%
-9.6%
6.3%
-7.8%
6.8%
10.2%
0.3%
-0.6%
1.3%
-0.2%
-0.2%
-1.0%
-1.4%
-0.6%
-7.5%
-9.2%
9.5%
-8.6%
11.7%
10.3%
0.6%
0.1%
3.6%
6.5%
4.3%
-0.2%
4.2%
3.8%
1.3%
-0.6%
19.6%
-6.0%
8.1%
8.8%
3.3%
2.0%
-9.4% -10.6%
3.3%
-0.4%
0.3%
-7.3%
-3.6%
6.7%
0.4%
7.2% -18.4% -11.6%
-6.2%
-3.6%
-18.6%
-9.9%
4.1%
-1.3%
-1.3%
-6.8%
-3.1%
6.3%
-1.0%
7.5% -19.5% -11.6%
-6.5%
-3.7%
-8.8% -10.3%
0.4%
-1.1%
-4.3%
-5.4%
-6.3%
-0.2%
2.3%
-0.5%
-8.4%
-9.2%
-6.9%
-1.1%
-14.0% -10.0%
0.6%
-1.7%
-5.2%
-5.1%
-6.4%
-1.4%
0.8%
-0.8%
-8.3%
-8.8%
-6.7%
-1.2%
11/75
R
Store count
Overseas segment performance
12/75
R
China store count
For details on previous quarterly and annual results, please refer to the Historical financial statements section.
13/75
R
Full-year company forecasts and medium/long-term outlook
Earnings forecasts
(JPYmn)
Sales
YoY
CoGS
Gross profit
YoY
GPM
SG&A expenses
SG&A/sales
Operating profit
YoY
OPM
Recurring profit
YoY
RPM
Net income
YoY
Store count changes (domestic)
Openings
Closings
Store count (Domestic)
Domestic sales growth rate (all stores)
Domestic sales growth rate (comparable stores)
Capital expenditure
Depreciation
FY03/14
1H
29,374
0.8%
9,595
19,779
0.0%
67.3%
18,657
63.5%
1,122
16.1%
3.8%
1,260
18.5%
4.3%
863
191.6%
-10
1
-11
877
2H
27,529
4.8%
8,820
18,709
4.3%
68.0%
19,023
69.1%
-314
-1.1%
-225
-0.8%
-444
-10
6
-16
867
FY03/15
1H
28,232
-3.9%
8,900
19,332
-2.3%
68.5%
18,412
65.2%
920
-18.0%
3.3%
1,067
-15.3%
3.8%
534
-38.1%
-9
1
-10
858
2H
26,110
-5.2%
8,360
17,750
-5.1%
68.0%
18,494
70.8%
-745
-2.9%
-432
-1.7%
-336
-12
10
-22
846
FY03/16
1H
28,185
-0.2%
9,052
19,133
-1.0%
67.9%
17,904
63.5%
1,228
33.5%
4.4%
1,159
8.6%
4.1%
518
-3.0%
-10
6
-16
836
2H
25,542
-2.2%
-9,052
-19,133
-74.9%
-17,904
-70.1%
-959
-3.8%
-985
-3.9%
-1,119
-14
6
-20
822
FY03/17
1H Est.
-3.1%
0.1%
2.7%
5.7%
-4.7%
-3.6%
-9.1%
-5.6%
-1.1%
-0.1%
-2.2%
-1.1%
-0.4%
2.7%
-5.6%
-4.5%
-1.6%
-0.6%
0.8%
0.8%
622
678
788
582
472
627
1,096
526
466
575
562
625
1,410
1,260
1,568
1,153
1,028
1,200
2,039
2H Est.
FY03/14 FY03/15 FY03/16 FY03/17
FY
FY
FY
Est.
56,903
54,342
53,727
53,982
2.7%
-4.5%
-1.1%
0.5%
18,415
17,260
17,530
17,512
38,488
37,082
36,197
36,469
2.1%
-3.7%
-2.4%
0.8%
67.6%
68.2%
67.4%
67.6%
37,680
36,906
35,928
35,979
66.2%
67.9%
66.9%
66.6%
808
175
269
489
89.2%
-78.3%
53.7%
81.8%
1.4%
0.3%
0.5%
0.9%
1,035
635
174
378
-2.9%
-38.6%
-72.6% 117.2%
1.8%
1.2%
0.3%
0.7%
419
198
-601
72
306.8%
-52.7%
-20
-21
-24
40
7
11
12
20
-27
-32
-36
20
867
846
822
822
Earnings performance and forecast for FY03/16
(JPYbn)
Sales
90
OP
OPM
30%
80
70
60
50
GPM (right axis)
76%
25%
74%
20%
72%
15%
70%
30
10%
68%
20
5%
66%
0%
64%
40
10
0
-10
FY03/00
FY03/04
FY03/08
FY03/12
FY03/16
-5%
FY03/00
FY03/04
FY03/08
FY03/12
62%
FY03/16
Company forecast for FY03/17
Key points
▶
▶
▶
▶
Domestic segment: Impact from rollout of three new formats thru remodeling and new store openings
Domestic segment: Overview of new formats of stores scheduled to be opened in FY03/17
Overseas segment: Progress towards improving profitability (especially in East Asia) and impact of store remodeling
Holding company: Progress at medical business and new investments
Shared Research will continue monitoring same-store sales closely to determine whether store remodeling is leading to
higher sales.
Overview
FY03/17 will be the year when Paris Miki Holdings takes a new step toward assuring growth at its domestic eyewear
business over the medium to long term. Under its new president Masahiro Sawada (appointed in February 2016), core
subsidiary Miki has laid out aggressive plans for new store formats and other capital spending aimed at putting its
domestic eyewear business back on the growth track and resolving the fundamental problem of sluggish growth in sales
and earnings. Towards this end, Paris Miki Holdings has clarified the roles of the holding company and the domestic
14/75
R
eyewear business (run by Miki), giving the holding company the responsibility of finding new business opportunities and
planning and executing the group's investment strategy, and Miki responsibility for managing the domestic eyewear
business as its core businesses while seeking further expansion overseas.
In February 2016, the group's main subsidiary, Miki, announced the appointment of a new president and new directors along with the
assignment of existing directors to new positions. For the first time in the company's history, a board member of Paris Miki Holdings will not
be serving concurrently on the board of the main subsidiary.
Solving fundamental problem: lack of compelling service and product offering
Consolidated sales and earnings at Paris Miki have been on the decline for more than a decade, with sales peaking at
JPY68.9bn and operating profit at JPY10.3bn way back in FY03/05, and the dividend paid by the company has been less
than earnings per share since FY03/08. Having studied the problem and determined that the fundamental reason for the
prolonged decline in sales was probably a lack of products and services that really appealed to consumers, the company
decided to use the planned retirement of the former president of Miki, who had pretty much kept the company on a set
path since taking the helm, as an opportunity to appoint Masahiro Sawada as the new president of Miki in February 2016,
tasking the new president with the job of making radical reforms to address Miki's biggest problems.
The appointment of a new president at Miki was carried out in line with the company's initial promotion plans, as the former president of Miki
(Hiroshi Tane, President and Representative Director of Paris Miki Holdings) had originally intended to step down as head of subsidiary Miki
within one year after he assumed the position in June 2015.
The new president of Miki has managed major store locations in Shibuya and elsewhere Japan, managed overseas
subsidiaries and, in FY03/16, was in charge of merchandising for the successful Belle Epoque format stores, which the
company is in the process of rolling out by renovating and converting existing stores. The new Miki president plans to
start off by addressing three basic problems: 1) the lack of appeal of the company's existing stores to young consumers;
2) a lack of stores in prime locations in major cities; and 3) the revitalization of suburban stores.
Surviving amid the drastic changes in the domestic eyewear market
Starting as as a watch shop in 1930, Miki has been a dedicated eyewear retailer for 85 years and was at one time the
leading company in the industry. The company has encountered a number of problems in recent years that have caused it
to fall behind competitors, but now recognizes that it must address these problems, as detailed above, if it is to revitalize
its business. The company understands that it will be hard pressed to survive in the current environment, which has
changed dramatically from hay days in the past, unless it makes the reforms necessary to solve these problems and is
therefore committed to making the reforms needed to build a new and better Miki.
Keys to revitalizing growth: Change store format to reflect Miki's world view and attract customers, revitalize suburban stores
The company's efforts to revitalize its domestic eyewear business will depend on the following: 1) its new music-fashion
format stores; 2) Belle Epoque format store; and 3) salon format stores. More specifically, the company has aggressive
plans for remodeling and new stores openings in all of these new formats. The music-fashion format stores will be aimed
at bringing in more young people; the Belle Epoque stores will be built up as the company's new brand; and the salon
format stores will be aimed at revitalizing sales at suburban stores.
These new formats have already proven their effectiveness in boosting sales. The company converted its flagship store in
15/75
R
Shinsaibashi (Osaka) into its first music-fashion format store in November 2011; this was followed by the remodeling of its
Shibuya (Tokyo) store into a music-fashion format store in June 2012 and the remodeling of four more stores to create
music-fashion format stores in FY03/16. The company's opened its first Belle Epoque store in Kichijoji (Tokyo) in August
2014 and, as of the end of FY03/16, has converted a total of 26 stores into the new Belle Epoque format with all showing
higher sales and earnings since their conversions. The company expects the shift to the new formats to yield an average
improvement in sales of about 10% at the individual store level, with this improvement enduring even after the first year,
and management reports increasing requests from property developers to open new stores in these formats.
Transition to new store formats
Note: Figures for FY03/17 represent Shared Research estimates based on store remodeling as of May 2016
Source: Shared Research, based on company data
The figure above shows changes in the number of stores operating under the company's three new formats in recent
years. With most of the stores in these new formats being opened during 2016, the total number came to only 32 stores
as of the end of FY03/16. As this accounts for only 4% of the company's entire store base, it is still too small to be a sales
or earnings driver at the domestic eyewear business. At the same time, it is also unrealistic to expect the company to
make the large investment in money and people required to shift its entire store base to these new formats.
Direction of reforms has been decided; implementation to come later
In order to realize a V-shaped recovery in earnings in FY03/17, the company plans to invest heavily to carry forward its
store strategy and improve its name recognition. It contrast to the past, when Miki could get by with small-scale
remodeling with no risk, the investments it is planning this time around require it to accept some risk as to whether the
spending will deliver the desired return. Even assuming the initial investments deliver those returns, the company might
still have to step up spending on marketing and accelerate the pace of remodeling and new store openings. Because
FY03/17 will be the first full fiscal year since the company embarked on a fresh start, investors will need to see whether the
company's new strategy is indeed producing the desired results. Shared Research will be watching especially for
evidence that remodeling and new store openings are producing the results expected.
Accelerate rollout of new store formats to attract more customers
In FY03/17, the company is counting on the new formats to increase the number of customers coming into its stores. By
creating stores that will entice passersby and carefully matching the merchandise offering (and price points) with the
store's format and the type of customers that frequent that area, the company believes it can capture latent demand. At
the already remodeled music-fashion format stores, the company has successfully appealed to a particularly demanding
market niche by creating a store exterior, interior, and merchandise lineup tied to a common theme and in sync with both
the store's locale and retired customers.
16/75
R
With regard to store site selection, the company believes that its prosperous music-fashion format stores are well-suited to
major urban areas, where it has traditionally been weak. Over the next three years, the company is looking to add another
30 or so music-fashion format stores and roughly 230 more Belle Epoque stores. As for the remaining suburban stores and
local stores with close ties in the surrounding communities, the company plans to take steps to improve sales and
earnings, included through the conversion to its salon format.
After raising brand recognition, increase marketing expenditures; might also accelerate new store opening
After using remodeling to raise the profile of its Pari Miki stores and Megane no Miki stores, the company plans to be
more active on the promotion and advertising side (including television commercials), but will monitor sales closely to
gauge the effectiveness of the additional spending. If the expansion of three new formats produces solid results the
company might decide to reinvest the profits to roll out the new formats even faster. However, the first thing investors
will want to watch is whether remodeling does indeed lead to higher sales.
As things stand now, the company is planning on remodeling about 50 stores a year to the new formats, opening 100
new stores over the next three years, and closing about 60 stores that are losing money. Remodeling and the new store
openings will primarily be aimed at expanding the number of stores in the three new formats discussed above. The
company is projecting roughly a 10% increase in sales for FY03/19, but the heavy spending on remodeling and marketing
the company has planned to support growth in the future has resulted in a more retrained operating profit growth
forecast. That said, if the contribution to sales from remodeling and new store openings is steady and the company is able
to accelerate restructuring, more of the benefits might flow through to the bottom line as well.
Projected number of stores operating under new format
Note: Forecast assumes all remodeling and new store openings are in one of the three new formats, and all store closures are of old format stores
Music-fashion format stores
The representative stores in this format are the company's Shibuya store (converted in June 2012) and its Shinsaibashi
store (converted in November 2011). As of the end of FY03/16, the company had a total of six music-fashion format
stores, including its Grand Front Osaka store (opened in April 2012). In FY03/17, the company has already opened two
new stores in this format, one in Harajuku and one in the Hakodate Mile shopping complex (both opened in April 2016).
Over the next three years the company plans create about 30 more music-fashion format stores.
Aimed at attracting young customers seeking stylish eyewear, the Shibuya store is designed to give the look of an
American store in Paris, France in the 1950. Accordingly, the store employs red and black as base colors, and has vintage
guitars and drum sets on display in its windows. The effect is such that at first glance it is difficult to tell that it is an
eyeglass store, but the eye-catching display has been extremely successful, drawing in not only the younger buyers that
17/75
R
the company was targeting but also many seniors from the company's existing customer base. In fact, the store went
from being one of the worst earnings performers before remodeling to the top-performing store afterwards. The
company's flagship Shinsaibashi store, Harajuku store, and Hakodate Mile store sport similar designs.
The company has also been exploring other creative concepts for shops. For example, it’s EYE WEAR by Paris Miki store in
the Hankyu Men's department store in Tokyo. This outlet is not aimed at older customers, as are most displays in
department stores, but rather is aimed strictly at men, enticing even the hard-to-please with fashionable displays of
upscale eyewear. Another example is the La Confiance by Paris Miki store in the Yokohama Vivre retail complex; opened in
October 2015, this store recreates an image of a Brooklyn (New York) store located in Paris, France.
Spending on remodeling will run in the JPY20–30mn range, so the cost is comparable to opening a new store. However,
the company will accept this risk worth in pursuit of growth, as the jump in sales at its successful Shibuya store suggests
that it can expect to fully recover its investment.
Music-fashion format: (Upper left: Harajuku store. Upper right: Hakodate store. Lower left: Yokohama Vivre store; Lower right: Hankyu Men's Tokyo store
Source: Company photos
Belle Epoque format stores
Belle Epoque format stores are designed to evoke the image of old Paris (late-1800s through early 1900s), when the
Moulin Rouge cabaret was thriving and there were constant scandals, such as the Ballets Russes scandal. The first store
converted into this new format was the Kichijoji store (reopened after remodeling in August 2014). Following the success
of the Kichijoji store, the company stepped up the pace of new openings and remodeling, putting in place a total of 18
Belle Epoque format stores during FY03/16 for a total of 24 stores and making plans for another 230 Belle Epoque format
stores over the next three years.
In the week after the Kichijoji store was opened after being converted to the Belle Epoque format, customer traffic at the
store doubled and even after a year had past sales were still running 10% above the pre-conversion level, with young
customers driving most of the growth. Like the Kichijoji store, Belle Epoque format stores are not just yellow, they sport a
number of different variations but all evoke the image of a shop in Paris's famous shopping arcades (Passages). The
company believes the unique ambiance of the Belle Epoque stores that draws in would-be customers through its doors is
18/75
R
the kind of store that shoppers will immediately associate with Paris Miki, and it is therefore the format that will account
for the bulk of new store openings in the years ahead. As the Belle Epoque brand name is built up, the company also
expects to see an increase in the effectiveness of spending on marketing.
In keep with the "old Paris" image, the Belle Epoque store design has carefully incorporated antiqued furniture and
period paintings; the company acquires these decorative pieces at auctions in an effort to keep costs down.
Belle Epoque format stores (from left to right: Mile Mizoguchi store, Yume Town Yusushiro store, Kawakoshi Crea Mall store)
Salon format stores
The company is counting on Salon format stores to help it revive sales at its suburban stores (410, as of the end of
FY03/16) and will launch this initiative in FY03/17. Many of the company's suburban stores were opened back in the
1980s and are obviously quite old. In order to better appeal to baby boomers, which form the heart of the company's
target market in suburban areas, the salon format stores try to recreate the ambiance of a hotel in suburban Paris and take
other measures aimed at strengthening the ties between the store and local community.
To hold down remodeling expenses, most of the exterior remodeling work is done around the store entrance. Furniture,
paintings, are then used in the interior to create a more relaxing salon-type atmosphere. In total, the remodeling work to
convert existing stores into salon format stores is said to run between JPY5mn and JPY10mn per store.
In order to facilitate regular communication with the senior citizens living in the area, the salon format stores have set
aside a special space where customers can regularly clean their glasses, enjoy tea or coffee service, and play classical or
French (Chanson) music. These measures aim to further enhance the atmosphere and encourage people to stay longer,
and eventually, buy something. The company hopes this approach will eventually lead to entire families buying eyewear
at these stores. As of May 2016, the company had only two salon format stores in operation, one in Izumo City and one in
the small town of Kawada in Ibaragi Prefecture (both were opened after remodeling in April 2016), but the response from
customers thus far has been good.
The salon format store in Izumo City employs basically the same concept as Belle Epoque format stores and some
elements of Belle Epoque format design have been replicated. Going forward, the company plans to makeover more
suburban stores to create a store atmosphere that is most suitable for increasing customers in that particular locale.
19/75
R
Salon format stores
Company also striving to open more large-scale stores in major metropolitan areas
The company is planning to open 20 new stores in FY03/17 and a total of 100 new stores over the next three years. While
most of the new stores will be in one of the three new formats discussed above, the company is also planning to take a
different approach and open a number of large-scale stores in major metropolitan areas.
As of May 20, 2016, the company had only 35 Miki stores in the 23 wards of Tokyo. At just over 4% of all Miki stores, this
far too few in view of the large population and ongoing flow of people into Japan's largest city. In contrast, JIN (TSE1:
3046) has 37 out of its 300-some stores located in Tokyo. In the past, Paris Miki had deliberately held down the number of
stores located in major metropolitan areas, where rents are naturally high. However, now that it has gained experience
and found success with its new music-fashion format and Belle Epoque format stores, the company plans be more
aggressive when it comes to open stores in major metropolitan areas, but investors will also want to keep a close eye on
the impact on sales from the company's efforts to train and motivate store employees.
Still, finding the right location and rolling out large-scale stores is expensive, and the sales required from these stores
before contributing to earnings will be especially high, so investors will want to keep an especially close eye on the
company's forecast for contributions to sales and earnings from this source.
Another run at the low-price market with a new format
At the recent results presentation meeting, Miki's new president (Masahiro Kiwada) said that low-price eyewear stores
account for about 35%–36% of the JPY400bn domestic eyeglass market and that, even though the company has only
eight stores to serve this market (under the Opt-Label name), he would like to employ the expertise the company has
acquired over the years and start moving more aggressively into the low-price market.
While giving no details, President Kiwada did say the company was planning to start opening low-price stores in a new
format sometime this fiscal year. With regard to the increasing amount of retail sales going to the internet, he commented
that the key to survival for brick-and-mortar retailers was creating a store atmosphere that consumers truly enjoyed.
Domestic eyewear business
At the company's domestic eyewear business, Shared Research will be focusing especially on 1) the conversion of old
stores into stores with one of the new formats, 2) the company's efforts to open large-scale stores in major metropolitan
areas, and 3) the new "X" format.
With regard the remodeling (discussed previously), as of the beginning of FY03/17 plans call for 46 stores to be
20/75
R
remodeled and converted into one of the three new formats along 20 new stores opening, all of which will be in one of
the three new formats. (This does not including 75 minor remodeling with no format changes.) Since the remodeling and
openings will be spread out fairly evenly over the year, the company anticipates contributions over the course of the full
year. The 46 planned remodeling and 20 new store openings represent roughly 8% of the company domestic store base
of 822 stores as of the end of FY0316. Assuming 10% higher sales at these stores, our rough estimate puts the boost to
sales over the full year around 0.4%, with the remodeling adding about 0.3ppts to same-store sales growth. The company
is forecasting same-store sales growth of 0.8% over the full year, but added that 2H is likely to be stronger than 1H.
Comparison with previous store formats (types A, B, C, and D)
At this time, we would also briefly note the thinking behind the company's old store formats. As the old Type A stores are
comparable to the Music-Fashion and Belle Epoque format stores, Shared Research is thinking the company will remodel
Types B, C, and D stores to create either Belle Epoque format stores or salon format stores.
Starting in FY03/15, Paris Miki divided all domestic stores (excluding Kimpo-do) into one of four categories (A–D) based
on location, customers, and regional characteristics. It plans to develop its store network in ways appropriate to each
store format: it aims to horizontally develop successful examples of type A stores; for types B and D, the company plans to
capitalize on demand from elderly customers with proposal-based sales, and for type C stores—whose clients are mostly
in their 40s—it plans to open new stores while nurturing customers that will go on to become the company’s core
customer base.
Type A
Type A stores include the unique and fashionable Shibuya store, and the Shinsaibashi store in Osaka, with robust sales to
inbound tourists. Customers are mostly in their 20s. This category also includes the new Belle Epoque store format. The
Belle Epoque Shibuya store has booked double-digit sales growth every year since it was renovated in June 2012. In
August 2014, the company renovated its third Belle Epoque store in Kichijoji, before opening a fourth in Marui Family
Mizonokuchi in March 2015.
Type B
Type B stores are regional stores with a fixed customer base, mostly comprising customers who are 50 or older. Annual
sales and average sales per customer tend to be high. These stores differentiate themselves from competition with staff
with strong consulting sales skills, new product development—mainly lenses—and efforts to promote high-spec, high
value-added products.
Type C
Type C stores are mainly in shopping centers, and are relaxed and family-oriented. These stores focus on simple proposals
to customers, mostly teenagers and people in their 40s. The average spend per customer is the lowest of the four types of
stores. With these stores, the company aims to capitalize on demand from families and second-wave baby boomers
(those born in the early 1970s), in addition to elderly customers, the company’s specialty.
In FY03/15, domestic comparable store sales fell 4.5% YoY. Yet type C store sales were roughly on par with the previous
year, partly because of the lens-inclusive pricing strategy.
Type D
Type D stores are regional stores rooted in their communities, mainly suburban standalone stores. As with type B stores,
21/75
R
customers are mostly 50 or older, and average spend per customer is on par with the average for all domestic stores. The
strategy is similar to type B stores, as the company aims to differentiate itself from the competition with new product
development—mainly lenses—and efforts to promote high-spec, high value-added products.
Domestic sales
GPM and SG&A expenses
The company is forecasting a gross profit margin of 67.6% in FY03/17, a 0.2ppt improvement over the previous year.
The company does not include any significant impact from the appreciation of the yen in its forecasts as it only procures
about 20% of its merchandise from overseas (mainly China).
Paris Miki is looking for SG&A expenses to increase by JPY51mn, to JPY36.0bn, as it matches new store openings with the
same number of closures, steps up openings of large-scale stores in major metropolitan areas, and embarks on an
aggressive remodeling program to convert old stores into stores with entirely new formats (as discussed above). Shared
Research sees clear signs that the company will continue to hold down overhead expenditures while at the same time
aggressively investing to assure future growth.
SG&A and GPM
22/75
R
Gross and operating margins, operating profit
Overseas
Overseas, Paris Miki plans to streamline its store network in areas where it faces difficult operating conditions, while
possibly opening new stores in areas that are performing well, and new areas. It appears the company is not planning any
major developments. Overall, the company expects higher sales and profits overseas. That said, investors will want to
keep a close eye of the results from test stores in the music-fashion and Belle Epoque formats the company is opening in
Singapore and Australia.
In China and Korea, where the company is running large operating losses, management is looking to reduce losses. The
company plans to continue closing unprofitable stores in both countries, and in Korea also plans to revamp its franchise
operations. The company also suggested that it might test its music-fashion and Belle Epoque formats in China.
Also overseas, we note that Paris Miki invested in and was involved in the business planning for the Japan International Eye
Hospital, which opened in Hanoi, Vietnam in fall 2014 (operations started in September, and the hospital officially
opened in November). That hospital in now in the black. Paris Miki also acquired a 20% stake in SAV-IOL SA, a Swiss
manufacturer and distributer of leading-edge intraocular lenses for cataract surgery.
Five doctors work at the Japan International Eye Hospital in Hanoi, including Vietnamese doctors. The medical team is led
by Tadashi Hattori, who has worked as a doctor and manager at the Vietnam National Eye Hospital since 2002, and is well
known for his volunteer work as an eye surgeon in Vietnam. This hospital is equipped with state-of-the-art facilities,
including LASIK equipment (laser eye surgery). According to the company, it also offers patients a relaxing environment,
with views of West Lake from the wards. Paris Miki operates a store of 30sqm or so on the first floor, but the facility
remains a hospital for all intents and purposes. Shared Research hopes this facility helps advance the treatment of eye
problems and diseases in Vietnam.
SAV-IOL SA developed the world's first intraocular lenses that provide quality vision at all distances for patients going
through cataract surgery. Unlike other multifocal lens, these lenses do not have a problem with ghost images or halos,
and are therefore able to transmit clear images that the brain can immediately recognize without the eyes growing tired.
Multifocal lenses have not gained much traction in Japan because they are not covered by Japan's national health
insurance scheme but, in the rest of Asia outside of Japan, the company is looking forward to expanding its
ground-breaking treatment for cataracts (a common ailment among nearly all the elderly).
23/75
R
Overseas earnings performance
China store count
24/75
R
Paris Miki Holdings ＞ Business
Business
Business description
Paris Miki is the largest eyewear retailer in Japan by sales and number of stores. It has the largest store network in Japan
despite steady losses of market share since 2004.
Domestic sales by product (left) and domestic versus overseas sales (right) (JPYmn)
Store count
Typical store description
The types of domestic stores can be divided into three main categories: Paris Miki and Megane no Miki brands (core store
format), Kimpo-do (mainly selling inside department stores), and Opt LABEL/OPTIQUE PARIS MIKI (low-price format). The
25/75
R
Paris Miki and Megane no Miki stores are the same format; Paris Miki is mostly used in the Tokyo/Kanto region, whereas
Megane no Miki is typically found in Kansai. The company typically rents its stores—only a few store locations are owned.
Store layout is straightforward: most of the space is used for displaying inventory for sale (stores carry approximately
1,200 units). The average store size is approximately 100sqm, and staffed with three to four people. Stores are
standalone, tenant-in-building, or located inside shopping malls.
The stores are mostly directly managed (743 out of 867, as of FY03/14). The company had 124 franchise stores (as of
FY03/14); directly managed stores are the preferred structure.
Store breakdown by format
Paris Miki/Megane no Miki stores
Many existing stores have “castle” exteriors featuring towers (see images below), a legacy design from early efforts to
create a unique look. The castle-themed design was an important part of the company’s early success (see History), but
the company has been experimenting with new formats and store displays to reflect new marketing efforts. Paris Miki has
engaged French design firm Malherbe (a retail architecture and design specialist) to help renew its store network. For the
brand image-wise, it was confirmed by the store at Seijyogakuen station evoking a Parisian apartment. Remodeling is
expected to unify the brand image.
Interior and exterior images of existing stores (the castle-theme) and some new store designs are shown below:
26/75
R
Opt-LABEL/OPTIQUE PARIS MIKI stores
The Opt-LABEL/OPTIQUE PARIS MIKI store was developed by the company in response to low-priced competitors
entering the market. The shops carry only private brand frames, and prices are displayed inclusive of lens costs. The stores
have mainly been opened in shopping malls.
Paris Miki / Megane no Miki and Kimpo-do stores target consumers with average and above average discretionary
income. Opt-LABEL/OPTIQUE PARIS MIKI stores target price- and fashion-sensitive consumers.
Business model
Eyeglasses (frames and lenses 76.2% of FY03/14 domestic retail sales)
Eyeglasses are the core product that the company sells. The company uses two pricing methods: lenses and frames priced
separately, or a fixed price for a complete set of glasses.
The majority of frames sold by the company, slightly above 60% (retail sales basis), are private brands designed internally
(examples include Au, Iki, Etos, 8vo, and Edge). Both set and separate pricing is used in Paris Miki / Megane no Miki
stores. The price range for the bulk of frames sold separately is roughly JPY15,000–40,000. At the same time, the prices for
a standard model of the gold frame Au series are JPY30,000–880,000, with the majority of Au frames in the
JPY100,000–300,000 range.
For lenses, the price is determined by such factors as thickness, weight etc. Prices start at JPY3,000 and reach just under
JPY150,000 for the most expensive ones. At Opt-LABEL/OPTIQUE PARIS MIKI, prices include those of frames and lenses.
Domestic unit price growth is declining. According to data provided by the company, the average unit price (frame and
lenses) was JPY38,171 in FY03/00 and had fallen to JPY29,407 by FY03/13—a decline of 23.0%. Reasons for the price
decline include competition with low-price retailers, the introduction of the less expensive Opt-LABEL/OPTIQUE PARIS
MIKI stores, and price erosion at the main stores. Since FY03/14, however, unit prices have been improving as the
company promotes high value-added products.
27/75
R
Trends in key store metrics
(JPY)
Unit Prices
All Stores
ex. OPTIQUE PARIS MIKI
OPTIQUE PARIS MIKI
FY03/00 FY03/01 FY03/02 FY03/03 FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16
Number of glasses sold All Stores
ex. OPTIQUE PARIS MIKI
Customer count
All Stores
All Stores
% of OPTIQUE PARIS MIKI
Number of glasses sold
Number of glasses sold × Unit
Sales YoY
All Stores
Comparable stores
38,171
38,360
36,743
37,696
7,996
-4.2%
-0.1%
0.5%
9.1%
4.1%
8.0%
2.0%
9.1%
5.6%
8.3%
Price
8.1%
3.1%
3.3%
-2.0%
2.9%
-2.2%
34,295
38,176
8,286
-6.7%
1.3%
3.6%
-9.4%
-18.6%
-8.8%
-14.0%
34,515
38,117
8,824
0.6%
-0.2%
6.5%
-10.6%
-9.9%
-10.3%
-10.0%
34,722
38,055
9,207
0.6%
-0.2%
4.3%
3.3%
4.1%
0.4%
0.6%
34,160
37,670
9,187
-1.6%
-1.0%
-0.2%
-0.4%
-1.3%
-1.1%
-1.7%
33,334
37,153
9,574
-2.4%
-1.4%
4.2%
0.3%
-1.3%
-4.3%
-5.2%
33,372
36,945
9,936
0.1%
-0.6%
3.8%
-7.3%
-6.8%
-5.4%
-5.1%
31,099
34,176
10,068
-6.8%
-7.5%
1.3%
-3.6%
-3.1%
-6.3%
-6.4%
28,114
31,037
10,005
-9.6%
-9.2%
-0.6%
6.7%
6.3%
-0.2%
-1.4%
29,873
33,970
11,967
6.3%
9.5%
19.6%
0.4%
-1.0%
2.3%
0.8%
27,535
31,033
11,246
-7.8%
-8.6%
-6.0%
7.2%
7.5%
-0.5%
-0.8%
29,407
34,663
12,160
6.8%
11.7%
8.1%
-18.4%
-19.5%
-8.4%
-8.3%
32,410
38,236
13,235
10.2%
10.3%
8.8%
-11.6%
-11.6%
-9.2%
-8.8%
32,493
38,463
13,676
0.3%
0.6%
3.3%
-6.2%
-6.5%
-6.9%
-6.7%
32,304
38,506
13,949
-0.6%
0.1%
2.0%
-3.6%
-3.7%
-1.1%
-1.2%
-12.0%
-16.1%
12.3%
3.1%
-7.5%
-7.1%
12.0%
3.1%
2.5%
1.9%
12.3%
3.3%
-1.8%
-2.4%
16.0%
4.1%
-2.6%
-3.0%
13.2%
3.9%
-6.1%
-7.5%
12.8%
4.1%
-9.7%
-9.6%
13.9%
4.9%
-3.8%
-4.5%
18.6%
7.5%
7.2%
1.9%
17.7%
7.2%
-1.5%
-0.7%
23.4%
9.7%
-8.8%
-8.1%
23.3%
9.5%
-0.4%
2.7%
24.1%
10.1%
-5.6%
-4.5%
25.3%
10.9%
-1.6%
-0.6%
The level of inventory turnover varies between stores located in high-traffic shopping malls and stores located in
suburban areas. Stores inventory is managed by a POS system. The company has a distribution center in Himeji that holds
approximately 700,000 units of frames inventory; individual stores hold approximately 1,200 frames each. The inventory
mix at each store is largely determined by individual store managers with guidance from the headquarters. Gross profit
margins for frames and lenses are generally better than the company average of 66.8%; lenses tend to carry margins
higher than frames.
Domestic frame sales
Domestic lens sales
28/75
R
Sunglasses
Sunglasses sold in stores can be considered as complementing the core eyeglass product; the product is not expected to
contribute significantly to the overall sales.
Sunglasses sold in stores are popular “national” brands (e.g. Police, Ray-Ban) with prices typically ranging from
JPY5,000–20,000. Gross profit margins for sunglasses are generally lower than the company average.
Domestic sunglasses sales
Contact lenses and accessories
The company sells contact lenses as complements to the main product, eyeglasses. Contact lenses are relatively easy to
sell (no display space required, no fashion trend risk) and are likely to remain in the mix. Prices range from
JPY3,800–32,000 per pair. Gross profit margins for contact lenses are generally lower than the company average, at
30–40%.
Domestic contract lens sales
Hearing aids
The hearing aid business is relatively new for the company and represents an area of potential growth. Hearing aids have
been increasing as a proportion of total sales since the company began reporting separate sales in FY03/05. Prices for
hearing aids vary widely: from JPY35,000–480,000 per unit. Gross profit margins for hearing aids (at around 50%) are
generally lower than the company average. Average unit price was JPY150,000 in FY03/15.
29/75
R
Domestic hearing aid sales
Cost structure
FY Performance Breakdown
(JPYmn)
Sales
YoY
SG&A expenses
Personnel
Depreciation
Rent
Sales promotion
Others
YoY
Personnel
Depreciation
Rent
Sales promotion
Others
Sales comp.
Personnel
Depreciation
Rent
Sales promotion
Others
SG&A composition
Personnel
Depreciation
Rent
Sales promotion
Others
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
68,922 68,011 66,929 63,876 57,745 56,299 60,140 59,547 55,419 56,903 54,342 53,727
-76.8%
73.3%
86.0%
63.9%
-7.9%
29.2%
-0.0%
8.2%
27.1%
41.9%
5.5%
2.7%
39,134 39,248 40,372 41,488 40,559 39,199 40,663 39,910 37,283 37,680 36,906 35,928
2,937
3,046
3,123
3,200
2,880
2,617
2,747
2,667
2,593
2,691
2,566
2,454
1,418
1,428
1,115
1,366
1,522
1,556
1,337
1,441
645
1,413
1,146
998
20,552 20,616 21,115 21,602 21,086 20,353 20,723 19,935 18,177 18,283 18,012 17,702
8,341
8,266
8,382
8,785
8,736
8,882
9,699
9,682
9,894
9,671
9,452
9,292
1,251
1,182
1,225
1,447
1,503
1,308
1,401
1,339
1,375
1,250
1,139
1,163
4,635
4,710
5,412
5,088
4,832
4,483
4,756
4,846
4,599
4,372
4,591
4,319
-3.8%
0.3%
2.9%
2.8%
-2.2%
-3.4%
3.7%
-1.9%
-6.6%
1.1%
-2.1%
-2.6%
-4.0%
3.7%
2.5%
2.5% -10.0%
-9.1%
5.0%
-2.9%
-2.8%
3.8%
-4.6%
-4.4%
0.5%
0.7% -21.9%
22.5%
11.4%
2.2% -14.1%
7.8% -55.2% 119.1% -18.9% -12.9%
-3.9%
0.3%
2.4%
2.3%
-2.4%
-3.5%
1.8%
-3.8%
-8.8%
0.6%
-1.5%
-1.7%
-5.2%
-0.9%
1.4%
4.8%
-0.6%
1.7%
9.2%
-0.2%
2.2%
-2.3%
-2.3%
-1.7%
-13.5%
-5.5%
3.6%
18.1%
3.9% -13.0%
7.1%
-4.4%
2.7%
-9.1%
-8.9%
2.1%
1.2%
1.6%
14.9%
-6.0%
-5.0%
-7.2%
6.1%
1.9%
-5.1%
-4.9%
5.0%
-5.9%
4.3%
2.1%
29.8%
12.1%
1.8%
6.7%
4.5%
2.1%
30.3%
12.2%
1.7%
6.9%
4.7%
1.7%
31.5%
12.5%
1.8%
8.1%
5.0%
2.1%
33.8%
13.8%
2.3%
8.0%
5.0%
2.6%
36.5%
15.1%
2.6%
8.4%
4.6%
2.8%
36.2%
15.8%
2.3%
8.0%
4.6%
2.2%
34.5%
16.1%
2.3%
7.9%
4.5%
2.4%
33.5%
16.3%
2.2%
8.1%
4.7%
1.2%
32.8%
17.9%
2.5%
8.3%
4.7%
2.5%
32.1%
17.0%
2.2%
7.7%
4.7%
2.1%
33.1%
17.4%
2.1%
8.4%
4.6%
1.9%
32.9%
17.3%
2.2%
8.0%
7.5%
3.6%
52.5%
21.3%
3.2%
11.8%
7.8%
3.6%
52.5%
21.1%
3.0%
12.0%
7.7%
2.8%
52.3%
20.8%
3.0%
13.4%
7.7%
3.3%
52.1%
21.2%
3.5%
12.3%
7.1%
3.8%
52.0%
21.5%
3.7%
11.9%
6.7%
4.0%
51.9%
22.7%
3.3%
11.4%
6.8%
3.3%
51.0%
23.9%
3.4%
11.7%
6.7%
3.6%
49.9%
24.3%
3.4%
12.1%
7.0%
1.7%
48.8%
26.5%
3.7%
12.3%
7.1%
3.8%
48.5%
25.7%
3.3%
11.6%
7.0%
3.1%
48.8%
25.6%
3.1%
12.4%
6.8%
2.8%
49.3%
25.9%
3.2%
12.0%
The company’s cost structure is largely determined by store labor and rent. During FY03/15, employee and rent expenses
were 74.4% of SG&A. The rental expense for standalone stores is directly negotiated with the landowner; stores located
in shopping malls normally pay a fixed rent (the rent is variable for the department stores and for some shopping
centers).
Advertising expenditure varies significantly depending on whether the company airs TV commercials. These costs rose
considerably in FY03/14 when the company conducted a large-scale TV advertising campaign. In FY03/15, the company
kept these costs down by focusing its TV commercials on western Japan.
30/75
R
Profitability snapshot, financial ratios
Profit Margins
FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
(JPYmn)
Cons.
269
808
175
-114
427
1,062
-543
-800
3,881
7,033
Operating Profit
9,243
0.3%
0.5%
1.4%
-0.2%
0.8%
-1.0%
1.8%
-1.4%
6.1%
10.5%
OP Margin
13.6%
1,511
2,195
1,464
1,907
2,573
1,420
710
859
5,386
8,307
10,489
EBITDA
2.8%
2.7%
3.9%
2.4%
3.4%
4.3%
1.2%
1.5%
12.4%
8.4%
15.4%
EBITDA Margin
Financial Ratios
1.2%
0.3%
2.0%
-0.0%
2.0%
3.1%
-0.3%
-1.8%
11.7%
7.1%
ROA
15.5%
0.5%
-1.6%
0.3%
1.1%
-2.9%
-0.5%
1.1%
-6.6%
3.5%
10.6%
7.8%
ROE
107.2% 101.8% 100.5% 100.9% 106.8% 113.1% 110.7% 105.6% 107.5% 101.6% 103.1%
Total Asset Turnover
227.1% 231.4% 206.6% 187.6% 185.9% 192.0% 195.2% 178.0% 184.5% 161.7% 164.8%
Inventory Turnover
213
233
204
189
199
190
198
199
160
185
156
Days of Inventory
12,395
11,400
11,365
12,497
10,226
11,192
11,973
9,705
10,054
8,984
Working Capital Requirement
8,188
410.5% 440.2% 505.0% 433.1% 437.6% 420.8% 303.6% 402.5% 354.1% 273.1% 284.1%
Current Ratio
Quick Ratio
295.5% 327.4% 350.0% 269.2% 277.6% 270.6% 197.3% 248.0% 217.8% 163.3% 169.0%
1.7%
9.3%
25.7%
25.3%
4.7%
28.1%
12.8%
-7.5%
46.8%
15.6%
74.5%
OCF / Current Liabilities
30.9%
29.6%
32.8%
37.2%
38.3%
35.4%
40.8%
46.3%
41.8%
49.1%
54.2%
Net Debt / Equity
73.9%
73.5%
73.8%
76.1%
76.0%
83.9%
77.4%
84.0%
83.9%
85.8%
83.9%
Equity Ratio
8.2%
1.3%
19.7%
15.9%
10.3%
3.9%
26.2%
14.8%
-7.1%
71.5%
45.0%
OCF / Total Liabilities
196
194
215
182
188
183
172
171
131
153
121
Cash Cycle (days)
-102
-995
-608
1,132
781
172
966
721
349
796
Changes in Working Capital
-858
31/75
R
Strengths and weaknesses
Strengths
◤
A large number of stores (nationwide store network): Due to its size, the company can arguably enjoy
economies of scale and should be able to invest in systems and such initiatives as nationwide advertising campaigns.
Until recently, it was the only company capable of this in Japan. Currently, it can be argued that Megane Top
developed capabilities similar to Paris Miki. However, given small relative market shares of the largest competitors,
the size advantage gives the company leverage over smaller rivals.
◤
Well trained, experienced staff: Paris Miki store personnel are arguably some of the best in the industry. The
company has been investing in training over the years and emphasized focus on customer service. Despite several
years of weakening performance, Shared Research felt that Paris Miki employees retained a high level morale and
motivation. However, it seems vital that the sense of direction for the company is regained soon, lest a state of
apathy and inertia develop.
◤
Financial strength: The company had JPY14.6bn of cash and equivalents on the balance sheet (as of FY03/14), a
reserve dwarfing any of its competitors. While a strong balance sheet can be sometimes be a double-edged sword
(it can breed complacency and prevent a sense of crisis from developing in time), in times of competitive wars it is
better to be rich than poor. (It can be noted that of the largest competitors Aigan is smaller but also cash rich,
Megane Top is cash poor but its financial position has been recovering dramatically).
Weaknesses
◤
Confused market positioning: Arguably the largest weakness for the company. Its stores in most cases fail to
answer the core questions—“who is the target customer?” and “what is the company trying to sell/tell that
customer?” The message is unclear. It offers an excellent quality product, their staffs are professional and service
oriented, its stores are conveniently located. However, by not sharpening its message and brand image, it might
end up ‘stuck in the middle’—excelling in parts but mediocre as a whole. Since FY03/11, the company has become
more conscious of this and strived to ensure each store is more aware of its target-customer base, has differentiated
itself according to business category, and sharpened its planning capabilities. As of June 2011 it was too early to tell
whether these efforts had paid off, but Shared Research thinks it is worth closely monitoring these efforts during
FY03/15.
◤
Not offering value: Value has been a major theme in the retailing worldwide in the past 10-20 years. A lowest
possible price for a quality that is understood and demanded by the consumer is one definition of Value. Another
expression of Value could be to offer customers a positive emotional experience and enhance their daily lives
through unique, cool, or otherwise valuable products and services. “The price as value” is the easiest to understand
and pursue, both for consumers and the firm. This is probably why the discount retailers are the biggest and fastest
growing type in any branch of retailing (JINS, Zoff and Megane Ichiba are clearly such examples). However, there are
many examples of great success achieved through other forms of “value innovation”. Paris Miki has been
emphasizing the notion of Omotenashi (a uniquely Japanese notion of hospitality) and developing interesting
customer solutions such as computerized individual eyeglass design. However, the company seems to have been
unable to develop such initiatives into a distinct model that would resonate with the consumer. Instead, it drifted
while watching dynamic rivals who compete on “price as value” basis steal market share.
◤
Large degree of autonomy at the store level: The company essentially operates a network of semi-autonomous
stores guided by the headquarters, but which are pretty much left to their own devices in terms of execution (at
32/75
R
least at territorial level). Such a leadership structure has contributed to the successful expansion in the past but
Shared Research questions if the current competitive situation demands a different approach. The company
introduced a POS system to strengthen operations from the current fiscal year (FY03/14). Shared Research has taken
a positive view towards these changes, but believes whether or not an overhauled system can function smoothly
needs to be monitored closely.
Group companies
Paris Miki – the core company of the group; eyewear retailing. 100% subsidiary of Paris Miki Holdings.
Kimpo-do – the eyeglasses retailer acquired in FY03/10; 25 stores at domestic department stores such as Takashimaya and
Isetan. 100% subsidiary of Paris Miki Holdings. Through this acquisition, the company is planning to expand into
higher-priced glasses.
Great Construction – store construction and property management company that supports the group’s retailing business.
100% subsidiary of Paris Miki Holdings.
Create 3 - On February 3, 2011, subsidiary Paris Miki MD Inc. changed its name to Create 3. Paris Miki MD had previously
acquired the assets of Fukui Kouki Ltd. following its bankruptcy proceedings. Fukui Kouki’s assets include factories,
buildings and eyeglass frame manufacturing equipment.
Overseas subsidiaries:
▶
PARIS MIKI S.A.R.L. － corporate entity for the French store network
▶
PARIS-MIKI LONDON LTD. － corporate entity for the United Kingdom store network
▶
▶
▶
▶
PARIS-MIKI INTERNATIONAL GmbH － corporate entity for the German store network
PARIS-MIKI OPTICAL (CHINA) Co., Ltd.－ corporate entity for the China store network
SHANGHAI PARIS MIKI OPTICAL CO. LTD. – corporate entity for the China store network
SHANGHAI PARIS MIKI TRADING CO. LTD.－ corporate entity for the China store network
▶
OPTIQUE PARIS-MIKI (S) PTE. LTD. – corporate entity for the Singapore store network
▶
PARIS MIKI OPTICAL TAIWAN., LTD. CO － corporate entity for the Taiwan store network
▶
OPTIQUE PARIS MIKI (M) SDN BHD － corporate entity for the Malaysia store network
▶
PARIS MIKI OPTICAL (THAILAND) LTD. － corporate entity for the Thailand store network
▶
▶
▶
DIANE OPTICAL INC. – corporate entity for the South Korea store network
PARIS MIKI OPTICAL INTERNATIONAL LTD. － corporate entity for the Hong Kong store network
PARIS MIKI AUSTRALIA PTY. LTD. – corporate entity for the Australian store network
▶
MIKI, INC. – corporate entity for the Hawaii store network
▶
KIMPO-DO (MALAYSIA) SDN BHD
▶
(SEATTLE BRANCH) － corporate entity for the Seattle store network
33/75
R
Market and value chain
Market overview
Eyeglasses
The Japanese market for eyeglasses and related goods is worth approximately JPY400bn. The repurchase cycle varies by
age group. Generally speaking, the age related deterioration in eyesight (worsening visual accommodative response)
starts in late 30s. This necessitates replacement purchases of eyeglasses every 2 or so years, as visual acuity deteriorates.
With age it becomes harder to focus on objects at various distances. To address this problem, varifocal/progressive lenses
(lenses with a gradient of the lens power) are frequently used. According to the company, the switch to progressive
lenses is a positive stimulus for purchases of new eyeglasses, as consumers are buying eyeglasses for continuous use
(because they can use these eyeglasses in all situations) and that increases the importance of the fashion component. This
should lead consumers to buy multiple pairs according to their fashion choices. Simply speaking, varifocal eyeglasses are
worn all the time. That is why more people would want to look good wearing them, compared to when they just pull
eyeglasses for reading out of their pockets every now and then.
In terms of price, the eyeglasses market in Japan could be divided into three main categories. Typically, more expensive
glasses are sold in department stores. The top level of the market has fewer market participants and volume than other
34/75
R
segments. The majority of the market competes at prices between 15,000 and 30,000 per pair (the average market price
was 26,000 yen in 2008). The lowest tier of the market is characterized by relatively low prices; less than 10,000 yen per
pair.
Hearing Aids
Paris Miki estimates that hearing aid usage per capita is approximately 25% of other developed countries.
The two main types of hearing aids sold in Japan are analog and digital (referring to the sound processing technology).
The market has grown by approximately 50% from 1990 to 2008, with growth stabilizing from 2003 to 2008. The hearing
aid market could be entering a secular growth trend, due to Japan’s aging population (see Market Growth below).
Domestic hearing aid market (total units shipped)
Source: Japan Hearing Instruments Manufactures Association
Suppliers
Frames – just under 70% of frames sold by Paris Miki are private brands, developed within the company and
manufactured externally (mostly domestically, however some are manufactured in China). SR Inc. understands that the
company uses approximately 50 different suppliers to source frames.
Lenses – Suppliers include: Hoya Corp. (TSE 7741), Seiko Holdings Corp. (TSE 8050), Tokai Optical (unlisted), Nikon
Essilor (unlisted; subsidiary of French company Essilor). The company indicated that overall sourcing is roughly equally
divided between the suppliers. SR Inc. understands that the company enjoys economies of scale for lens purchases
compared to smaller retailers.
Contact lenses – Main suppliers include: Johnson & Johnson K.K., Coopervision Japan, B.L.J. Co., Ltd., Menicon.
Hearing Aids – Main suppliers include: Oticon Japan K.K., Siemens Japan K.K.
Barriers to entry
The barriers to entry for eyewear (both eyeglasses and contact lenses) retailing are low. Anyone can start an eyewear
store. However, due to a highly competitive nature of the market and the high degree of its maturity, anyone entering the
market must offer a high degree of differentiation and value innovation. Therefore sizeable entries are relatively unlikely.
When they occur however, they can be disruptive as Intermestic Inc. demonstrated with Zoff. It can be argued that as
long as gross profit margins of the eyeglass retailers remain high, there will be a temptation both inside and outside of the
industry to develop lower priced business models and capture share. However, lowering the SG&A costs and sustaining
high inventory turnover is difficult due to low purchasing frequency and high service content typical for eyewear
retailing, and this is a challenge that any newcomer would new to overcome.
35/75
R
Competition
The market participants can be categorized into two main groups: specialized retail chains, and smaller stores that sell
eyeglasses along other products such as watches and jewelry. The company estimates the latter represent roughly 70% of
the market – the oligopolization of the market by large retail chains is hardly progressing.
The current competitive landscape is the result of two phases of intense price competition that began with the entrance
of Intermestic Inc.’s (Unlisted) Zoff shops in February, 2001. Average prices for glasses in 2000 were approximately
29,000 yen, and Zoff undercut the status quo by offering three fixed prices well below the industry average: 5,000 yen,
7,000 yen, and 9,000 yen. Consumers were attracted to low-price stores and the business rapidly grew. It is interesting to
note that Intermestic Inc. was not an eyeglass retailer or manufacturer when it started Zoff, an example of outsider
providing an innovative solution in the market where the existing players were unable to do so. Most incumbents were
quick to launch low-priced stores in response to Zoff’s early success (Paris Miki launched the Opt-LABEL format in
September, 2001).
Zoff offered extremely low prices. These low prices were made possible by the following factors: private brand (no
royalties), fewer models (less inventory), and frames manufactured in China. Low prices did not come without some risk,
as consumers came to associate Zoff's low prices with low quality and this association eventually spread to other low-cost
shops.
Since 2009 though JIN Co. has had the most impact on the competitive landscape; the company used a radical pricing
method to attract customers - a single price setting with no extra charges. The prices were 4,990, 5,990, 7,990 and 9,990
yen (the most expensive eyeglasses were less than 10,000 yen). JIN entered the eyeglasses market in April 2001 and from
the beginning saw eyeglasses as a fashion item but it was the introduction of the new pricing system that led to
exponential growth in sales.
Megane Top launched a one-price concept in 2006 under the Megane Ichiba brand (lenses and frames for 18,900 yen).
Megane Top’s price point was approximately 30% less than the average industry price of 28,000 yen when the shops
opened. The company grew the store base and gradually converted its entire store network to the one-price store format.
36/75
R
Other competitors include Megane Super and Aigan.
Substitutes
The main substitutes for eyeglasses are contact lenses and corrective laser surgery. The surgery was yet to be considered a
mainstream alternative as of May 2012. The contact lenses market is mature and while some fluctuations in the market
share between the contacts and eyeglasses might occur based on technological innovation and design, the relationship
should probably considered a stable one. It would appear that the aging population will benefit the eyeglass market due
to more complex vision related and medical needs older consumers typically have.
Switching costs for contact lenses are low (an ophthalmologist writes a prescription before the first purchase). Costs for
laser surgery are relatively high, but prices in the market are trending lower – SR Inc. estimates that eye surgery in Japan
can range between approximately 100,000 and 400,000 yen (the average price for glasses in 2010 was approximately
23,000 yen according to Gankyo).
37/75
R
Strategy
From 2000 until around mid-2010 Paris Miki went through several periods of searching for an appropriate strategy. These
include experimenting with a franchise model, reactive expansion of low-price formats, and bringing in outsiders into the
management team. The period from 2007 till 2013 may be characterized as a period of confusion. The company was
unable to reach an internal consensus on its store and branding strategy, instead it responded to tectonic shifts in the
business environment with moves such as closures of unprofitable stores and introduction of experimental store designs.
During the difficult operational period Paris Miki found itself in, it operated a strategy of:
◤
“Think and act local.” Stores and territories have a significant degree of autonomy and try to deal with competitive
challenges as they arrive in their local markets. That means that acting on a company level takes time.
◤
“Don’t spend money unless absolutely necessary.” Managing for cash flows has long been a trademark approach of
Paris Miki and it served it well. Whether the tradition of financial conservatism became a financial inertia remains to
be seen.
◤
Slightly confused market positioning (“price” or “value”)
Paris Miki Co.’s president Kaga is emphasizing speed and a new awareness, starting with employees at each store, by
reforming the pay system through the elimination of seniority-based pay and the strengthening of performance-linked
pay elements. Other visible changes include the opening of an entertainment-themed store (Grand Front Osaka) and an
increase in TV advertising, which the company has largely refrained from in the past (as of May 2014). In FY03/15, the
company will divide stores into four segments, comprised of trendsetting stores, regional flagship stores, shopping center
stores, and regionally focused stores. Through this initiative, Paris Miki aims to bring out the strengths in each type of
store while providing a boost to comparable store sales.
38/75
R
Paris Miki Holdings ＞ Historical financial statements
Historical financial statements
Q3 FY03/16 results (out February 12, 2016)
▶
▶
▶
Q3: Domestic same-store sales slightly below plan, but earnings on target. Larger losses in Korea, same outlook for Q4
Existing stores: More renovations/new openings of Belle Epoque format stores boost customer traffic and sales
FY03/16: Full-term sales on track to finish below plan, but operating profit to finish in line with plan as continued
closure of unprofitable stores reduces SG&A expenditures
▶
New President: Manager of successful rollout of Belle Epoque format stores named new president of main subsidiary
Miki, can expect more strategies targeting growth
▶
FY03/17: New President expected to push development of new store formats to revitalize existing stores, attract
more baby boomers and second generation baby boomers
Quarterly sales
Earnings overview
Though overseas losses expanded, domestic profits improved, supporting consolidated results; recovery of existing stores and
In the nine months of cumulative Q3, sales were JPY41.5bn (-0.2% YoY) and operating profit JPY1.2bn (+64.3% YoY or
+JPY460mn). Despite a lower level of unprofitability at the company’s Australian subsidiary, conditions for overseas
businesses were harsh due to worsening business sentiment, especially in Korea. However, domestic businesses increased
profits due to recovery of existing store sales and cuts in SG&A expenses, contributing to the consolidated results.
According to the company, it has been proceeding with its plan to close unprofitable stores, along with focusing on
39/75
R
renovating existing stores as the need arises in order to give them distinct formats. By doing so, it plans to increase the
number of baby boomers and second generation baby boomers who visit its stores.
Operating profit benefits from closure of stores, and efforts to hold SG&A and advertising expenses in check
Gross profit declined JPY322mn YoY on a 0.6pp decrease in the CoGS-to-sales ratio. However, an overall effort to curb
SG&A expenses through store closures and curbing advertising expenses gave operating profit a JPY460mn boost.
Advertising and SG&A expenses were kept in check through cost-effectiveness analysis.
Toward Q4
In Q4, we believe that the company will continue efforts to improve comparable store sales and close unprofitable stores.
It also plans to launch measures to cope with the aging market in Japan and develop value-added products. Store
openings and closings (12 stores opened, 33 stores closed) are expected to surpass initial forecasts, which call for the
opening of 10 stores and the closing of 30 stores.
Cumulative Q3 results for operating profit and recurring profit exceeded its FY03/16 full-year forecast. Although existing
store sales through the end of Q3 were up only 0.5% YoY versus plan of +1.3%, the company expects operating profit to
finish the full term in line with plan thanks to the closure of unprofitable stores and other measures aimed at controlling
SG&A expenditures. Since both sales and profits in Q4 have tended to fall below those in Q3 due to seasonal factors, the
Korean subsidiary, which continues to be a drag on overseas results, appears to have lost money again in Q4
(October–December).
SG&A expenses
40/75
R
Inventory assets
Main subsidiary Miki appoints manager of successful rollout of Belle Epoque format stores as new president
The group's main subsidiary, Miki, announced the appointment of a new president and new directors along with the
assignment of existing directors to new positions (effective February 8, 2016). The new appointments are of particular
significance given 1) the high level of expectations surrounding the new president of subsidiary Miki, and 2) the fact that
this will be the first time that a board member of Paris Miki Holdings will not be serving concurrently on the board of the
main subsidiary. The appointment of a new president was carried out in line with the company's initial promotion plans,
as the former president of Miki (Hiroshi Tane, President and Representative Director of Paris Miki Holdings) had originally
intended to step down as head of subsidiary Miki within one year after he assumed the position in June 2015.
The new Miki president, Masahiro Kiwada, has managed major store locations in Shibuya and elsewhere Japan, managed
overseas subsidiaries, and was also the MD supervisor who oversaw the successful renovation of Belle Epoque format
stores in FY03/16. Shared Research believes the new president can be counted on to aggressively implement more
measures aimed at revitalizing Miki's existing store base going forward.
Japan
41/75
R
Domestic existing store sales recover, and operating profit higher on cuts to SG&A expenses
Amid a moderate recovery in consumer sentiment, core subsidiary Miki continued to close unprofitable stores and
renovate existing stores.
As a result, through the end of Q3 domestic businesses posted sales of JPY35.9bn (-0.2% YoY) and operating profit of
JPY1.4bn (+73.3% YoY or +JPY597mn). While sales growth at existing stores continues to improve, reaching +1.9% in Q3,
the +0.5% YoY growth rate for the first nine months of the fiscal year is still short of the company's full-term forecast of
+1.3%. (For January, the company reported a 1.8% YoY decline in existing store sales.) Shared Research believes the rise
in operating profit was due to huge benefits from efforts to restrain SG&A expenses and cost cut benefits from store
closures.
Store renovations and marketing aimed at inbound tourists adding to sales and earnings
On the domestic front, inbound tourists and store renovations are making steady contributions toward earnings recovery,
although comparable store sales still struggled.
More renovations/new openings of Belle Epoque format stores
Among the stores being renovated, Shared Research is focusing especially on the Belle Epoque format stores, which the
company positioned to have their own uniqueness. Following the success of the Belle Epoque format store in the trendy
Shibuya district, the company decided that it would not just renovate stores but also actively open new Belle Epoque
format stores starting in 2H FY03/15 and would continue through the end of FY03/16. Working on renovations and new
openings of Belle Epoque format stores in regions agreed to by Paris Miki MD, the company completed renovations and
new openings of more than 10 Belle Epoque format stores during the first nine months of FY03/16. The company says that
the renovations have resulted in both higher customer traffic and higher growth in sales at existing stores, and that it
plans to do still more renovations and new store openings during FY03/17, taking both location and customer
characteristics in careful consideration.
The company reports that it has had some success with improving sales by reducing price points for its frames with
lenses, though mainly at stores located in shopping centers and other commercial buildings.
Catching demand from inbound tourists
Domestically, renovations to existing stores and the opening of stores in the ‘‘shop-in-shop’’ format at LAOX (TSE 8202)
helped lift sales and gross profit. This new store format is expected to boost operating profit, despite lower GPM from
high commissions versus sales, since the consignment sales format eliminates personnel expenses (the stores specialize in
frames and sunglasses, outsourcing vision tests to regular Paris Miki stores nearby).
LAOX has operated a large duty-free store as a key tenant at EXITMELSA, a refurbished commercial building that was
opened at Ginza 5-chome, a center of the fashionable Ginza district, in September 2015. Paris Miki opened its first ‘‘real’’
shop-in-shop in this LAOX store, with the store not operating as a small in-store section, but as a separate store in itself.
42/75
R
Promoting private brand hearing aid products in earnest
By product category, sunglasses grew by 7.2% YoY, riding on strong demand from inbound tourists, while hearing aids
picked up by 2.4% YoY as the company launched an aggressive sales promotion of its private brand products.
In its hearing aid business, Paris Miki rolled out a private brand expander (which increases overall sound) in FY03/15. In
FY03/16, the company went on to introduce multiple price ranges for private brand products: JPY60,000---JPY120,000 for
one ear; and JPY108,000---JPY188,000 for both ears. These products, offered at multiple price ranges, are poised to drive
up sales and profits, as they are designed to appeal to customers who hesitated to buy at the original price, and as their
gross profit margins are comparatively higher than other products. As the prices are lower than conventional products,
the sales value would be lower if the sales volume was same. However, the sales through Q3 rose 2.4% YoY and GPM rose
due to contribution of the private brand products, showing a steady effect of the company’s plan.
Unit prices
(JPY)
Average Eyeglass Unit Price
OPTIQUE PARIS MIKI
YoY
All stores
OPTIQUE PARIS MIKI
Number of Eyeglasses Unit Sales (YoY)
Number of Customers Counted (YoY)
FY03/11 FY03/12 FY03/13 FY03/14 FY03/15
FY
FY
FY
FY
FY
29,873
27,535
29,407
32,410
32,493
33,970
31,033
34,663
38,236
38,463
11,967
11,246
12,160
13,235
13,676
6.3%
-7.8%
6.8%
10.2%
0.3%
9.5%
-8.6%
11.7%
10.3%
0.6%
19.6%
-6.0%
8.1%
8.8%
3.3%
0.4%
7.2%
-18.4%
-11.6%
-6.2%
-1.0%
7.5%
-19.5%
-11.6%
-6.5%
2.3%
-0.5%
-8.4%
-9.2%
-6.9%
0.8%
-0.8%
-8.3%
-8.8%
-6.7%
FY03/12 FY03/13 FY03/14 FY03/15 FY03/16
Q1-Q3
Q1-Q3
Q1-Q3
Q1-Q3
Q1-Q3
27,926
29,416
32,523
32,894
32,807
31,410
34,388
38,283
38,711
38,619
11,506
12,135
13,183
13,807
14,030
-7.0%
5.3%
10.6%
1.1%
-0.3%
-7.6%
9.5%
11.3%
1.1%
-0.2%
-4.5%
5.5%
8.6%
4.7%
1.6%
5.5%
-16.9%
-14.7%
-5.0%
-2.9%
5.9%
-8.4%
-15.0%
-5.0%
-3.3%
-2.9%
-8.4%
-10.3%
-6.7%
-0.4%
-3.3%
-8.6%
-10.1%
-6.2%
-0.6%
43/75
R
Company plans for FY03/17
Shared Research sees the new president pushing ahead with the efforts to revitalize existing stores and develop new
stores that better appeal to second-wave baby boomers (those born in the early 1970s). As part of this effort, the
company is working to revitalize its organizational structure through the promotion of a younger generation of managers,
including the leader of the store format development team. The company had previously classified its store formats into
four different types but is now planning to add three new types. The new formats are still in the trial-and-error stage of
development, but we will be keeping a close eye on progress under the new format development team leader going
forward.
The company plans to open and close about the same number of stores in FY03/17 as it will in FY03/16, but given the
growing emphasis on store development, there is a chance it will adopt more aggressive store opening plans.
As for SG&A expenses, thus far the company has been working to control spending through various means other than
closing stores. However, there is a chance the company will now shift tactics and do more upfront spending in key areas.
Shared Research will be watching closely for developments on this front.
Store count
Overseas
Overseas operations book operating loss; Southeast Asia books profit, losses grow in South Korea
Overseas operations saw operating losses increase on both a YoY and QoQ basis. Southeast Asian operations (Thailand
and Singapore) buoyed profits, but China and South Korea operations struggled owing to harsh economic conditions and
weak retail sentiment. Particularly in South Korea, sales declined (mainly those at franchise stores) and related spending
44/75
R
and appraisal losses increased further, leading to the expansion of operating losses. The company indicated that
conditions in South Korea were likely to remain difficult in Q4 (October---December).
In an effort to improve the performance of directly managed stores, the company is renovating some stores while closing
other, unprofitable stores. Still, the large proportion of businesses accounted for by franchise operations together with
the tough operating environment make it likely that the company's overseas operations will continue to struggle in
FY03/17. Losses declined at the company’s Australian stores, which were undergoing reorganization.
The company had 15 fewer stores in China compared to this time last year and 12 fewer compared with the end of
FY03/15. The company has opened two stores (in Q2) but closed 14 stores, demonstrating its commitment to cutting
losses at unprofitable stores.
Plans for FY03/17
Visibility in South Korea is poor, but the company is expecting favorable results from operations in Singapore and other
Southeast Asian countries. Having achieved good market penetration, operations in Thailand now have a stable earnings
base; the company is also close to turning a profit in FY03/17 in Vietnam, where it also operates an eye hospital.
Operations in Australia are expected to remain in the red.
China store count
45/75
R
1H FY03/16 results (out November 13, 2015)
Quarterly sales
(JPYmn
18,000
15%
16,000
10%
14,000
5%
12,000
0%
10,000
-5%
8,000
-10%
6,000
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
-15%
YoY (right axis)
Sales
(JPYm)
1,500
80%
1,000
60%
500
40%
0
20%
-500
-1,000
0%
Q1
FY03/10
Q3
Q1
FY03/11
Q3
Q1
FY03/12
Operating profit
Q3
Q1
FY03/13
Q3
Q1
FY03/14
OPM (right axis)
Q3
Q1
FY03/15
Q3
Q1
FY03/16
Q3
-20%
GPM (right axis)
Earnings overview
Though overseas losses expanded, domestic profits increased, supporting consolidated results; recovery of existing stores and
Sales were JPY28.2bn (-0.2% YoY) and operating profit JPY1.2bn (+33.5% YoY or +JPY308mn). Overseas businesses
expanded losses, due mainly to sluggish operations at a South Korean subsidiary. However, domestic businesses
increased profits due to recovery of existing store sales and cuts in SG&A expenses, contributing to the consolidated
results.
Compared to the company’s estimates, sales failed to achieve the initial target by a narrow margin, but operating profit
apparently exceeded the planned target. As gross profit margin was in line with the plan, the main factor that boosted the
profit more than expected was less SG&A expenses than planned, due to closings of unprofitable stores and decreasing
costs.
Operating profit benefits from closure of stores, and efforts to hold SG&A and advertising expenses in check
Gross profit declined JPY199 YoY on a 0.6pp decrease in the CoGS-to-sales ratio, but a JPY508mn decline in SG&A
expenses on store closures and an overall effort to keep costs in check (mainly targeting advertising expenses) gave
operating profit a JPY308mn boost. Advertising and SG&A expenses were kept in check through cost-effectiveness
analysis.
In 2H, the company plans to continue efforts for recovering existing store sales and to keep closing unprofitable stores. It
also plans to launch measures to cope with the aging market in Japan and develop value-added products. As sales at
existing stores in October rose 5.1% YoY and sales of eyeglasses (sets of frames and lenses) increased as well, Q3 got off
46/75
R
to a good start.
For elderly customers, Paris Miki plans to continue measures that showed effects in 1H, such as strengthening the lineup
of private brand hearing aid products and proposal-based sales of lenses. In 1H, the increase in private brand hearing aid
products led to a rise in 1ppt of GPM of the product. For 2H, the company has not changed its spending plan specifically.
The plan for opening and closing stores is also in line with the initial plan. Since both sales and profits of the company in
2H have tended to fall below those in 1H for seasonality, the trend is likely to be the same for FY03/16.
100%
74%
90%
73%
80%
72%
70%
71%
60%
70%
50%
69%
40%
68%
30%
67%
20%
66%
10%
65%
0%
Q1
FY03/09
Q3
Q1
FY03/10
Q3
Q1
FY03/11
Lenses
Q3
Q1
FY03/12
Frames
Q3
Q1
FY03/13
Hearing aids
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Sunglasses, contact lenses
Q3
Q1
FY03/16
64%
Q3
GPM (right axis)
SG&A expenses
(JPYm)
12,000
12%
10,000
8%
8,000
4%
6,000
0%
4,000
-4%
2,000
-8%
0
Q1
Q2
FY03/11
Q3
Q4
Personnel
Q1
Q2
FY03/12
Q3
Q4
Q1
Q2
FY03/13
Q3
Advertising & sales promotion
Q4
Q1
Q2
FY03/14
Q3
Q4
Rent & depreciation
Q1
Q2
FY03/15
Q3
Q4
Other expenses
Q1
Q2
FY03/16
Q3
-12%
Q4
YoY (SG&A, right axis)
Inventory assets
(JPYm)
18,000
270
16,000
240
14,000
210
12,000
180
10,000
150
8,000
120
6,000
90
4,000
60
2,000
30
0
Q1 Q2
FY03/10
Q3
Q4
Inventory
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Sales
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Inventory turnover (right axis)
Q1 Q2
FY03/14
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
0
Merchandise inventory turnover (right axis)
47/75
R
Japan
Domestic existing store sales recover, and operating profit higher year-on-year on cuts to SG&A expenses
Amid a moderate recovery in consumer sentiment, core subsidiary Miki saw higher operating profit year-on-year, with
lower costs and a recovery at existing stores enough to offset lower sales from closing unprofitable stores. As a result,
domestic businesses posted sales of JPY24.3bn (-0.8% YoY), operating profit of JPY1.4bn (+43.2% YoY or +JPY414mn).
Sales at existing stores declined 1.1% in 1H, but turned positive on 0.2% growth in Q2 (October growth: +4.3%). Shared
Research believes the rise in operating profit was due to huge benefits from efforts to restrain SG&A expenses and cost
cut benefits from store closures.
Catching demand from inbound tourists
although comparable store sales still struggled. Sales to inbound tourists helped overall sales and gross profit, improving
performance at existing stores and progress at “shop-in-shop” stores, opened within LAOX (TSE 8202) stores. This new
store format is expected to boost operating profit, despite lower GPM from high commissions versus sales, since the
consignment sales format eliminates personnel expenses (the stores specialize in frames and sunglasses, outsourcing
vision tests to regular Paris Miki stores nearby).
LAOX has operated a large duty-free store as a key tenant at EXITMELSA, a refurbished commercial building that was
opened at Ginza 5-chome, a center of the fashionable Ginza district, in September 2015. Paris Miki opened its first “real”
shop-in-shop in this LAOX store, with the store not operating as a small in-store section, but as a separate store in itself.
FY03/16, the company went on to introduce multiple price ranges for private brand products: JPY60,000–JPY120,000 for
one ear; and JPY108,000–JPY188,000 for both ears. These products, offered at multiple price ranges, are poised to drive
gross profit margins are comparatively higher than other products. As the prices are lower than conventional products,
the sales value would be lower if the sales volume was same. However, the sales value in 1H increased 2.0% YoY and GPM
rose around 1ppt due to contribution of the private brand products, showing a steady effect of the company’s plan.
(JPYm)
16,000
20%
14,000
15%
12,000
10%
10,000
5%
8,000
0%
6,000
-5%
4,000
-10%
2,000
-15%
0
-20%
-2,000
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Sales (inc. intra-company transfer)
Q3
Q4
Q1 Q2
FY03/13
OP
Q3
Q4
Q1 Q2
FY03/14
Q3
OPM (right axis)
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
-25%
YoY sales (right axis)
48/75
R
12%
8%
4%
0%
-4%
-8%
-12%
Q1 Q2
FY03/09
Q3
Q4 Q1 Q2
FY03/10
Q3
Q4 Q1 Q2
FY03/11
Q3
Q4 Q1 Q2
FY03/12
Q3
Q4 Q1 Q2
FY03/13
Q3
Q4 Q1 Q2
FY03/14
Q3
Q4 Q1 Q2
FY03/15
Q3
Q4 Q1 Q2
FY03/16
Q3
Q4
(JPYm)
16,000
20%
12,000
10%
8,000
0%
4,000
-10%
0
Q1
FY03/10
Q3
Frames
Q1
FY03/11
Lenses
Q3
Q1
FY03/12
Hearing aids
Q3
Q1
FY03/13
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
YoY (frames + lenses, right axis)
Q1
FY03/16
Q3
-20%
YoY (hearing aids, right axis)
Unit prices
◤
◤
◤
All-store basis
JPY32,589 (-0.2% YoY)
Stores other than Opt-LABEL and OPTIQUE PARIS MIKI
JPY38,310 (+0.3% YoY)
Opt-LABEL and OPTIQUE PARIS MIKI stores
JPY13,976 (+1.3% YoY)
◤
◤
All-store basis
-3.2% YoY
-4.3% YoY
Customer count
◤
◤
All-store basis
-0.6% YoY
-1.1 YoY
49/75
R
Store count
50
1,050
40
30
950
20
10
850
0
-10
750
-20
-30
650
-40
-50
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Store openings
Q1 Q2
FY03/13
Q3
Store closures
Q4
Q1 Q2
FY03/14
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
550
Store count (year-end) (right axis)
Overseas
Overseas operations book operating loss; while Southeast Asia posted profits, China and South Korea operations struggled
Overseas operations saw the 1H operating loss expand from the previous JPY35mn to JPY70mn year-on-year. Southeast
Asian operations (Thailand and Singapore) buoyed profits, but China and South Korea operations struggled owing to
harsh economic conditions and poor retail sentiment. Particularly in South Korea, sales declined (mainly those at franchise
stores) and appraisal losses increased further, leading to the expansion of the operating loss. The company aims to boost
sales in South Korea by refurbishing existing stores and diminishing unprofitable stores.
The operating loss also swelled temporarily on upfront costs of a UK subsidiary (earnings results out in February;
reopened after renovation in June [Q2]), which closed for relocation. The newly opened London store, mainly targeting
business people, got off to a good start as planned. In Q3, the loss at the UK subsidiary is likely to shrink on an expected
rise in sales. Losses declined at the company’s Australian stores, which were undergoing reorganization. The company’s
business in Vietnam has also been favorable and may show operating profit in FY03/17.
Further, the company had 17 fewer stores in China compared to 1H last year, eight less than at the end of FY03/15. It
opened two stores in Q2, but closed 10 stores (four in Q1 and six in Q2), demonstrating ongoing efforts to cut losses at
unprofitable stores. As many Paris Miki stores were located in shopping centers, the overall sluggishness of the shopping
centers apparently affected the company’s stores.
50/75
R
(JPYm)
2,500
100%
2,000
75%
1,500
50%
1,000
25%
500
0%
0
-500
-25%
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
Operating profit
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
-50%
YoY Sales (right axis)
250
200
150
100
50
0
Q1
FY03/11
Q3
Q1
FY03/12
Q3
Europe
Q1
FY03/13
Q3
America
Q1
FY03/14
Q3
Oceania
Q1
FY03/15
China
Q3
Q1
FY03/16
Q3
Asia (ex. China)
China store count
10
150
5
140
0
130
-5
120
-10
110
-15
100
-20
90
-25
Q1
FY03/11
Q3
Q1
FY03/12
Q3
Q1
FY03/13
Openings
Q3
Closings
Q1
FY03/14
Q3
Q1
FY03/15
Q3
Q1
FY03/16
Q3
80
China store count (right axis)
51/75
R
Q1 FY03/16 results (out August 13, 2015)
Quarterly sales
(JPYmn)
18,000
15%
16,000
10%
14,000
5%
12,000
0%
10,000
-5%
8,000
-10%
6,000
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Sales
Q4
Q1 Q2
FY03/14
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
-15%
YoY (right axis)
(JPYmn)
1,500
80%
1,000
60%
500
40%
0
20%
-500
-1,000
0%
Q1
FY03/10
Q3
Q1
FY03/11
Q3
Q1
FY03/12
Operating profit
Q3
Q1
FY03/13
Q3
Q1
FY03/14
OPM (right axis)
Q3
Q1
FY03/15
Q3
Q1
FY03/16
Q3
-20%
GPM (right axis)
Earnings overview
Amid recovering consumer sentiment, core subsidiary Miki saw higher operating profit year-on-year, with lower costs and
a recovery at existing stores enough to offset lower sales from closing unprofitable stores.
Overseas operations book operating loss
Overseas operations booked an operating loss of JPY0mn in Q1 FY03/16 (despite an operating profit of JPY31mn in Q1
FY03/15). Southeast Asian operations (Thailand and Singapore) buoyed profits, but China and South Korea operations
struggled owing to sluggish economic conditions and retail sentiment. The operating loss also swelled temporarily on
upfront costs of a UK subsidiary (earnings results out in February; reopened after renovation in June [Q2]), which closed
for relocation.
Results mostly in line with the company forecasts; looking to increase customer count.
The company believes results were in line with its forecasts. Still, based on an analysis of comparable store sales, the
company wants to expand the client base further, despite the higher average spend per customer than expected from
ongoing efforts to promote high-spec, high value-added products.
CoGS-to-sales ratio, SG&A expenses in line with forecasts; advertising expenses held in check through cost-benefit analysis
The slight improvement in the CoGS-to-sales ratio was due to a shift in product makeup. SG&A expenses were in line with
expectations, while rent expenses offset the dent made by closing Miki stores due to improved performance of the
52/75
R
Kimpo-do stores (with fluctuating rent). Advertising expenses were kept in check through cost-effectiveness analysis.
100%
74%
90%
73%
80%
72%
70%
71%
60%
70%
50%
69%
40%
68%
30%
67%
20%
66%
10%
65%
0%
Q1
FY03/09
Q3
Q1
FY03/10
Q3
Q1
FY03/11
Lenses
Q3
Q1
FY03/12
Frames
Q3
Q1
FY03/13
Hearing aids
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
Q1
FY03/16
64%
Q3
GPM (right axis)
SG&A expenses
(JPYmn)
12,000
12%
10,000
8%
8,000
4%
6,000
0%
4,000
-4%
2,000
-8%
0
Q1
Q2
FY03/11
Q3
Q4
Personnel
Q1
Q2
FY03/12
Q3
Q4
Q1
Q2
FY03/13
Q3
Q4
Q1
Q2
FY03/14
Q3
Q4
Rent & depreciation
Q1
Q2
FY03/15
Q3
Q4
Other expenses
Q1
Q2
FY03/16
Q3
Q4
-12%
Inventory assets
(JPYmn)
18,000
270
16,000
240
14,000
210
12,000
180
10,000
150
8,000
120
6,000
90
4,000
60
2,000
30
0
Q1 Q2
FY03/10
Q3
Q4
Inventory
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Sales
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
0
53/75
R
Japan
(JPYmn)
16,000
20%
14,000
15%
12,000
10%
10,000
5%
8,000
0%
6,000
-5%
4,000
-10%
2,000
-15%
0
-20%
-2,000
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
OP
Q3
Q4
Q1 Q2
FY03/15
OPM (right axis)
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
-25%
Inbound tourists and store renovations positively impact results
although comparable store sales still struggled. Sales to inbound tourists helped overall sales and gross profit, improving
performance at existing stores and progress at “shop-in-shop” stores, opened within LAOX (TSE 8202) stores. This new
store format is expected to boost operating profit, despite lower GPM from high commissions versus sales, since the
consignment sales format eliminates personnel expenses (the stores specialize in frames and sunglasses, outsourcing
vision tests to regular Paris Miki stores nearby).
12%
8%
4%
0%
-4%
-8%
-12%
Q1 Q2
FY03/09
Q3
Q4 Q1 Q2
FY03/10
Q3
Q4 Q1 Q2
FY03/11
Q3
Q4 Q1 Q2
FY03/12
Q3
Q4 Q1 Q2
FY03/13
Q3
Q4 Q1 Q2
FY03/14
Q3
Q4 Q1 Q2
FY03/15
Q3
Q4 Q1 Q2
FY03/16
Q3
Q4
FY03/16, the company went on to introduce multiple price ranges for private brand products: JPY60,000–JPY120,000 for
one ear; and JPY108,000–JPY188,000 for both ears. These products, offered at multiple price ranges, are poised to drive
gross profit margins are comparatively higher than other products.
54/75
R
(JPYmn)
16,000
20%
12,000
10%
8,000
0%
4,000
-10%
0
Q1
FY03/10
Q3
Frames
Q1
FY03/11
Lenses
Q3
Q1
FY03/12
Hearing aids
Q3
Q1
FY03/13
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
Q1
FY03/16
Q3
-20%
Unit prices
◤
◤
◤
All-store basis
JPY32,368 (+1.3% YoY)
JPY38,299 (+3.5% YoY)
JPY13,660 (-0.7% YoY)
◤
◤
All-store basis
-4.5% YoY
-6.0% YoY
Customer count
◤
◤
All-store basis
-1.3% YoY
-1.9 YoY
Success with Belle Epoque stores in Kichijoji, Crea Mall Kawagoe, and Marui Family Mizonokuchi
In store renovation, Paris Miki seems to be witnessing a series of success stories. In August 2014, it renovated its store in
Kichijoji (Musashino City, Tokyo) in the Belle Epoque format, representing Paris’ golden age (late 19th to early 20th
centuries). As a result, the store posted robust growth year-on-year, with Q1 showing almost 30% growth year-on-year
(over the figure prior to the renovation). Crea Mall Kawagoe (Kawagoe City, Saitama), which underwent a similar
renovation in March 2015, attained 10% growth year-on-year. The Belle Epoque store in Marui Family Mizonokuchi
(Kawasaki City, Kanagawa) has also been exceeding targets since its opening in March 2015.
Paris Miki plans to renovate about 50 stores in FY03/16. The Kichijoji store format will not be applicable to all renovations
because of its carefully selected location. Still, the company is looking to duplicate the successful model where applicable,
while exploring ways to develop other stores in harmony with their regional characteristics. In 1H, the company opened
most of its stores in shopping centers and other commercial facilities, with the number of new and closed stores in line
with the plan.
55/75
R
Store count
1,050
50
40
30
950
20
850
10
0
-10
750
-20
-30
650
-40
-50
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
Store closures
Store openings
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
Q4
550
Overseas
(JPYmn)
2,500
100%
2,000
75%
1,500
50%
1,000
25%
500
0%
0
-500
-25%
Q1 Q2
FY03/10
Q3
Q4
Q1 Q2
FY03/11
Q3
Q4
Q1 Q2
FY03/12
Q3
Q4
Q1 Q2
FY03/13
Q3
Q4
Q1 Q2
FY03/14
Operating profit
Q3
Q4
Q1 Q2
FY03/15
Q3
Q4
Q1 Q2
FY03/16
Q3
-50%
Q4
250
200
150
100
50
0
Q1
FY03/11
Q3
Q1
FY03/12
Q3
Europe
Q1
FY03/13
America
Q3
Q1
FY03/14
Oceania
Q3
China
Q1
FY03/15
Q3
Q1
FY03/16
Q3
Asia (ex. China)
56/75
R
China store count
10
150
5
140
0
130
-5
120
-10
110
-15
100
-20
90
-25
Q1
FY03/11
Q3
Q1
FY03/12
Q3
Q1
FY03/13
Openings
Q3
Q1
FY03/14
Q3
Closings
Q1
FY03/15
Q3
Q1
FY03/16
80
Q3
FY03/15 results (announced on May 15, 2015)
Quarterly sales
(JPYmn)
18,000
15%
16,000
10%
14,000
5%
12,000
0%
10,000
-5%
8,000
-10%
6,000
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Q3
Q4
Q1
Q2
FY03/12
Q3
Sales
Q4
Q2
Q1
FY03/13
Q3
Q4
Q1
Q2
FY03/14
Q3
Q4
Q1
Q2
FY03/15
Q3
Q4
-15%
YoY (right axis)
(JPYmn)
1,500
80%
1,000
60%
500
40%
0
20%
-500
-1,000
0%
Q1
FY03/10
Q3
Q1
FY03/11
Q3
Q1
FY03/12
Operating profit
Q3
Q1
FY03/13
OPM (right axis)
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
-20%
GPM (right axis)
Earnings overview
Japan: comparable store sales continue to slide
Sales were down year-on-year at main subsidiary Miki because of a protracted pullback in demand following the
consumption tax hike, and the closing of unprofitable stores. Although the company is also opening new stores in parallel
with closing unprofitable stores, comparable store sales continued to underperform. As a result, sales and operating profit
both declined year-on-year, underperforming the company’s targets.
57/75
R
Overseas: operating loss widens; tackling a new challenge in Vietnam
Overseas, the operating loss widened from JPY103mn in FY03/14 to JPY207mn. In China, results are improving as the
company’s Chinese subsidiary closes unprofitable stores, but difficult conditions persisted amid sluggish economic
growth and rising labor expenses. The company’s subsidiary in Southeast Asia had also been contributing to operating
profit, but results were hit by lower sales at this subsidiary. Shared Research judges that the loss at the company’s
Australian subsidiary has probably narrowed as it streamlines its store network.
Sales fell at the UK subsidiary as it closed for relocation. Operating profit also declined owing to expenses associated with
this relocation. Recurring profit, however, improved because the company received compensation for the relocation. The
company also began investing in a medical business in Vietnam, as it takes on a new challenge in this region where eye
healthcare remains underdeveloped.
SG&A expenses
(JPYmn)
12,000
12%
10,000
8%
8,000
4%
6,000
0%
4,000
-4%
2,000
-8%
0
Q1
FY03/11
Q2
Q3
Q4
Personnel
Q1
FY03/12
Q2
Q3
Q4
Q1
FY03/13
Q2
Q3
Q4
Q1
FY03/14
Rent & depreciation
Q2
Q3
Q4
Q1
FY03/15
Other expenses
Q2
Q3
Q4
-12%
100%
74%
90%
73%
80%
72%
70%
71%
60%
70%
50%
69%
40%
68%
30%
67%
20%
66%
10%
65%
0%
Q1
FY03/09
Q3
Q1
FY03/10
Lenses
Q3
Q1
FY03/11
Frames
Q3
Q1
FY03/12
Hearing aids
Q3
Q1
FY03/13
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
64%
GPM (right axis)
Towards FY03/16
In its management plan and forecasts for FY03/16, the company appears likely to continue policies from FY03/15:
strengthening value-added products, continuing to close unprofitable stores, and expanding successful store formats.
Shared Research will also keep an eye out for concrete initiatives to combat the sales and customer declines, as well as
contributions to full-year earnings from stores that changed pricing displays (about 75), and performance of new stores
inspired by the successful Shibuya store.
The company plans to close 30 stores, and open 10 stores, mainly in shopping centers in areas where there are few
stores, to capitalize on underlying demand. It also plans to develop new products together with manufacturers in
58/75
R
response to demand for glasses for different purposes.
Overseas, the company plans to streamline its store network in areas with difficult operating conditions. It may expand in
areas where business is robust and new areas.
Inventory assets
(JPYmn)
18,000
270
16,000
240
14,000
210
12,000
180
10,000
150
8,000
120
6,000
90
4,000
60
2,000
30
0
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Inventory
Q3
Q4
Q1
Q2
FY03/12
Sales
Q3
Q4
Q1
Q2
FY03/13
Q3
Q4
Q1
Q2
FY03/14
Q3
Q4
Q1
Q2
FY03/15
Q3
Q4
0
Japan
(JPYmn)
16,000
20%
14,000
15%
12,000
10%
10,000
5%
8,000
0%
6,000
-5%
4,000
-10%
2,000
-15%
0
-20%
-2,000
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Q3
Q4
Q1
Q2
FY03/12
Q3
Q4
Q1
Q2
FY03/13
OP
Q3
Q4
Q1
Q2
FY03/14
Q3
Q4
OPM (right axis)
Q1
Q2
FY03/15
Q3
Q4
-25%
12%
8%
4%
0%
-4%
-8%
-12%
Q1
Q2
FY03/09
Q3
Q4
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Q3
Q4
Q1
Q2
FY03/12
Q3
Q4
Q1
Q2
FY03/13
Q3
Q4
Q1
Q2
FY03/14
Q3
Q4
Q1
Q2
FY03/15
Q3
Q4
59/75
R
Store count
50
1,050
40
30
950
20
10
850
0
-10
750
-20
-30
650
-40
-50
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Q3
Q4
Q1
Q2
FY03/12
Store openings
Q3
Q4
Q1
Q2
FY03/13
Q3
Store closures
Q4
Q1
Q2
FY03/14
Q3
Q4
Q1
Q2
FY03/15
Q3
Q4
550
(JPYmn)
16,000
20%
12,000
10%
8,000
0%
4,000
-10%
0
Q1
FY03/10
Q3
Frames
Lenses
Q1
FY03/11
Q3
Q1
FY03/12
Hearing aids
Q3
Q1
FY03/13
Q3
Q1
FY03/14
Q3
Q1
FY03/15
Q3
-20%
Unit prices
▶
▶
▶
All-store basis
JPY32,493 (+0.3% YoY)
JPY38,463 (+0.6% YoY)
JPY13,676 (+3.3% YoY)
▶
▶
All-store basis
-6.2% YoY
-6.5% YoY
Customer count
▶
▶
All-store basis
-6.9% YoY
-6.7% YoY
60/75
R
Overseas
(JPYmn)
2,500
100%
2,000
75%
1,500
50%
1,000
25%
500
0%
0
-500
-25%
Q1
Q2
FY03/10
Q3
Q4
Q1
Q2
FY03/11
Q3
Q4
Q1
Q2
FY03/12
Q3
Q4
Q1
Q2
FY03/13
Q3
Q4
Operating profit
Q1
Q2
FY03/14
Q3
Q4
Q1
Q2
FY03/15
Q3
Q4
-50%
250
200
150
100
50
0
Q1
FY03/11
Q2
Q4
Q3
Q1
FY03/12
Q2
Q3
Europe
Q4
Q1
FY03/13
Q2
Q3
Q4
Oceania
America
Q1
FY03/14
Q2
China
Q3
Q4
Q1
FY03/15
Q2
Q3
Q4
Asia (ex. China)
China store count
10
150
5
140
0
130
-5
120
-10
110
-15
100
-20
90
-25
Q1
FY03/11
Q2
Q3
Q4
Q1
FY03/12
Q2
Q3
Openings
Q4
Q1
FY03/13
Q2
Closings
Q3
Q4
Q1
FY03/14
Q2
Q3
Q4
Q1
FY03/15
Q2
Q3
Q4
80
At main subsidiary Paris Miki Co., the company continued development of its mainstay eyewear products, and
aggressively made product proposals geared toward senior citizens. Paris Miki sees this customer segment as one with
great potential, particularly for products such as hearing aids. Steady improvement in earnings drove comparable store
sales up 2.7% YoY. Notable events during the January-March quarter which had an impact on sales were snowfall in
February, which pushed down sales 1.6% YoY, and rush demand prior to the consumption tax hike, which resulted in a
19.5% YoY increase in sales for the month of March. However, sales appear to be sluggish for April and May following the
tax increase.
61/75
R
GPM was down 0.4 points YoY to 67.6%, and private brands composed 78.0% of sales (78.4% in FY03/13). The company
continued its drive to close unprofitable stores, and the SG&A-to-sales ratio consequently improved 1.1 points to 66.2%.
Along with the announcement of FY03/14 results, Paris Miki commented on discrepancies between its full-year earnings
forecasts (announced on May 15, 2013), and its full-year FY03/14 earnings results. Compared to its forecasts, sales were
2.6% lower, operating profit was 37.5% lower, recurring profit was 28.9% lower, and net income was 36.4% lower. The
company attributed lower sales to growth in comparable store sales that was slower than expected as it continued to
close unprofitable stores. Lower sales also yielded lower SG&A expenses, but this difference was not enough to make up
for the loss in sales; operating profit, recurring profit, and net income were lower as a result.
Domestic market
Sales were JPY49.6bn (-0.5% YoY), and segment profit was JPY863mn (+13.0%).
The company added 7 new stores, while closing 27 stores for a total of 867 stores (as of end of FY03/14). Although the
number of stores decreased, sales were lower only slightly, and segment profit posted a YoY increase.
Domestic sales by product category were as follows:
▶
▶
▶
▶
▶
Frames: JPY16.2bn (-2.1% YoY)
Lenses: JPY22.8bn (-0.6%)
Sunglasses: JPY2.2bn (+12.0%)
Contact lenses: JPY1.3bn (-15.9%)
Hearing aids: JPY5.7bn (+7.7%)
Unit price and sales volume growth rates were as follows:
◤
Unit prices: JPY32,410 (+10.2% YoY) on all-store basis, JPY38,236 (+10.3%) for stores other than Opt-LABEL and
OPTIQUE PARIS MIKI, and JPY13,235 (+8.8%) for Opt-LABEL and OPTIQUE PARIS MIKI stores
◤
Number of eyeglasses sold: Down 11.6% YoY on all-store basis, down 11.6% YoY for stores other than Opt-LABEL
and OPTIQUE PARIS MIKI
◤
Number of customers: Down 9.2% YoY on all-store basis, down 8.8% YoY for stores other than Opt-LABEL and
OPTIQUE PARIS MIKI
Concerning hearing aids, the company began a rent to own service during Q4 FY03/13. Customers may use a hearing aid
on a trial basis (while paying a monthly fee), and have the option to purchase the unit at any time. This new service was
successful in attracting customers, and sales of hearing aids were up 7.7% YoY. The cumulative number of rent to own
applications during FY03/14 was more than 2,300, and 450 of these customers moved on to purchase. Slightly less than
1,000 are still under rental.
Overseas
Sales were JPY7.7bn (+29.2% YoY), and segment loss was JPY103mn (compared to a segment loss of JPY360mn in
FY03/13). Sales and operating profit were strong in the Southeast Asia region. However, conditions remain harsh in
China, with an economic downturn and rising personnel expenses weighing on the company’s local subsidiaries despite
measures taken to reorganize the store network.
62/75
R
Sales were 55.4 billion yen (-6.9% YoY), operating profit was 427 million yen (operating loss of 114 million yen in the
previous year), recurring profit was 1.2 billion yen (recurring loss of 25 million yen in the previous year), and net income
was 103 million yen (net loss of 103 million yen in the previous year).
At main subsidiary Paris Miki Co., the company changed its retail prices, while promoting functional lens lines, such as the
RakuRakuKun series. However, economic uncertainties resulted in an 8.1% decline in comparable store sales over the
previous year. Furthermore, gross profit margin improved to 68.0%, a 1.2 percentage point increase over the previous
year (full-year GPM target was 68.7%). Private brand sales (unit volume basis) were 78% of total sales, a slight increase
YoY.
A reduction in SG&A expenses (-6.6% YoY at 37.3 billion yen) due to lower salaries and advertising costs resulted in
higher profits in FY03/13, despite a 0.3 percentage point rise in SG&A-to-sales ratio.
FY03/13 earnings results were basically in line with the company’s full-year forecasts revised on May 8, 2013. Higher unit
prices YoY were due to the company encouraging customers to buy frames and lenses separately for more fashionable
appearance, rather than just buying prefixed sets of eyeglasses. Advertising and promotional expenses were reduced
during the year, which caused a decline in customer traffic at its stores. As a result, sales fell short of the company’s initial
forecast.
Domestic market
Sales were 49.8 billion yen (-7.4% YoY), and segment profit was 764 million yen (+321.4% YoY). The company added 7
new stores, while closing 69 stores for a total of 887 stores (as of end of FY03/13). As a result, total store sales fell 8.8%
YoY, mainly due to a reduction in the number of stores, which have been on a downward trend.
▶
▶
▶
▶
▶
Frames: 16.7 billion yen (-7.9% YoY)
Lenses: 22.9 billion yen (-13.5% YoY)
Sunglasses: 1.9 billion yen (+8.3% YoY)
Contact lenses: 1.5 billion yen (-13.2% YoY)
Hearing aids: 5.3 billion yen (+3.2% YoY)
◤
Unit prices: 29,407 yen (up 6.8% YoY) on all-store basis, 34,663 yen (up 11.7% YoY) for stores other than Opt-LABEL
and OPTIQUE PARIS MIKI, and 12,160 yen (up 8.1% YoY) for Opt-LABEL and OPTIQUE PARIS MIKI stores
◤
Number of eyeglasses sold: Down 18.4% YoY on all-store basis, down 19.5% YoY for stores other than Opt-LABEL
and OPTIQUE PARIS MIKI
◤
Number of customers: Down 8.4% YoY on all-store basis, down 8.6% YoY for stores other than Opt-LABEL and
OPTIQUE PARIS MIKI
In Q4 FY03/13, the company launched a rent to own service for hearing aids. Users pay a monthly fee and may purchase
the hearing aid at any time. This initiative proved successful, with Q4 (January–March 2013) sales of hearing aids
increasing 8.2% YoY.
63/75
R
The company revised its store closure plan for FY03/13, from the previous 50 to 69 stores during Q3 FY03/13. In Q4
FY03/13, the company closed 41 unprofitable stores, and consequently, SR Inc. believes that the company may see better
profitability overall from FY03/14.
Overseas
Sales were 5.9 billion yen (-2.6% YoY), and segment loss was 360 million yen (compared to a segment loss of 345 million
yen in FY03/12). The company was focusing on reorganizing its unprofitable stores overseas.
Sales were down 1.0% YoY at 59.6 billion yen, and the company posted an operating loss of 114 million yen (vs. an
operating profit of 1.1 billion yen YoY), a recurring loss of 25 million yen (vs. an recurring profit of 1.7 billion yen YoY),
and a net loss of 1.2 billion yen (vs. net income of 473 million yen YoY).
The company explained sales at Paris Miki Co. declined as the subsidiary’s sales and advertising strategy failed to boost
customer numbers and due to lower unit prices for eyeglasses.
Operating profit was hit by a decline in sales but also by inventory write-downs, and a 2.6 point YoY decline in
the gross profit margin to 66.8%. Inventory meanwhile actually rose by 250 million yen YoY to 10.2
billion yen at end-March 2012.
Sales were 439 million yen above company estimate, and operating profit 477 million yen above estimate (lower deficit).
The company downwardly revised its full year forecast via Q3 FY03/12 results announcement. Smaller-than-expected sales
decline and lower SG&A expenses thanks to better personnel cost controls were behind results higher than estimates.
SG&A expenses declined 1.9% YoY to 39.9 billion yen. Even though advertising expenses increased 7.8% YoY to 1.4
billion yen on Internet and other advertising, personnel expenses declined 3.8% YoY to 19.9 billion.
Domestic
Sales declined 0.8% YoY to 53.6 billion yen. In terms of retail sales, comparable store sales declined 0.7% YoY.
Meanwhile, the total number of domestic stores remained in a declining trend. As of end-FY03/12 there were 949
domestic stores (vs. 954 as of end-FY03/11) with 21 new store openings and 26 closures over this period. As a result,
all-store sales fell 1.5% YoY.
At the subsidiary level, retail sales at Paris Miki Co. fell 1.7% YoY on an all-store basis and declined 0.9% YoY on a
comparable-store basis. However, retail sales at Kimpo-do Co. increased 1.4% YoY on an all-store basis and 1.4% YoY on a
comparative-store basis.
▶
▶
▶
▶
▶
Frames: 18.0 billion yen (-2.2% YoY)
Lenses: 26.5 billion yen (-3.1% YoY)
Sunglasses: 1.8 billion yen (-2.9% YoY)
Contact lenses: 1.8 billion yen (-8.0% YoY)
Hearing aids: 5.2 billion yen (+8.5% YoY)
64/75
R
◤
Unit prices: 27,535 yen (down 7.8% YoY) on all-store basis, 31,033 yen (down 8.6% YoY) for other than Opt-LABEL,
OPTIQUE PARIS MIKI, and 11,246 yen (down 6.0% YoY) for Opt-LABEL, OPTIQUE PARIS MIKI.
◤
Number of eyeglasses sold: Up 7.2% YoY on all-store basis, up 7.5% YoY for other than Opt-LABEL, OPTIQUE PARIS
MIKI
◤
Number of customers: Down 0.5% YoY on all-store basis, down 0.8% YoY for other than Opt-LABEL, OPTIQUE PARIS
MIKI
Operating profit for the segment fell 51.2% YoY to 838 million yen. Lower unit prices for eyeglasses and inventory
write-downs were behind the drop in gross profit margin at Paris Miki Co. From Q3, Paris Miki Co. began to earnestly
market frame and lens sets, but this new approach failed to attract more customers, resulting in these poor results. SR Inc.
believes the sluggish results can be attributed to a confused market positioning in which the company is not sure if its
message should be "value" or "price", while its TV commercials and other advertising efforts have done little to raise
brand awareness.
Furthermore, the company commented that results at Kimpo-do Co., which mainly operates shops within department
stores, fell slightly short of plans due to reduced operating hours and extra holidays at department stores in conjunction
with rolling power cuts in the wake of the Great East Japan Earthquake. In November 2011, Kimpo-do opened its new
Kyobashi flagship store along Chuodori in Kyobashi, Tokyo. According to the company, the floor space of this new store is
around 198 sqm compared to the usual 66 sqm. Kimpo-do's head office functions were also relocated to this site, making
supervision of this key store easier. The services provided by the Kyobashi flagship store will be expanded to its
department store-based shops as the company strives to further improve the services it offers.
Overseas
Sales were down 2.6% YoY at 5.9 billion yen and this segment saw an operating loss of 345 million yen (vs. 319 million
yen operating loss in FY03/11).
Overseas retail sales declined 3.1% YoY, but increased 0.5% YoY when eliminating the impact of a stronger yen. By
region, sales in Asia increased 2.4% YoY (+6.8% YoY when excluding impact of exchange rate fluctuations), sales in
Europe were down 22.9% YoY (-19.3% YoY when excluding impact of exchange rate fluctuations) and sales in
Oceania/Hawaii were down 22.1% YoY (-23.2% YoY when excluding impact of exchange rate fluctuations).
By region, operating profit in Asia rose 16.9% YoY. Losses in Oceania/Hawaii were smaller due to the shuttering of
unprofitable stores.
The company had 12 stores in Oceania as of end-FY03/12 after the closure of four stores. The company said that it will
continue to eliminate, whenever necessary, loss-making stores for which contracts have been completed. In South Korea
there was a net gain of 15 stores (opened 16, closed 1) for a network of 41 stores, while in China there was a net decrease
of 21 stores (opened 9, closed 30), leaving a network of 138 stores. The company said that its network in China is
currently being reorganized with an eye on future growth. Furthermore, the company has not limited itself to eyeglasses,
but has been offering a wide range of products including hearing aids and accessories as it tries to pinpoint customer
needs and determine the ideal store makeup.
65/75
R
Paris Miki Holdings ＞ Income statement
Income statement
Income Statement
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
(JPYmn)
Cons.
Cons.
68,011 66,929 63,876 57,745 56,299 60,140 59,547 55,419 56,903 54,342 53,727
Total Sales
-1.6%
-4.6%
-9.6%
-2.5%
6.8%
-1.0%
-6.9%
2.7%
-4.5%
-1.1%
-1.3%
YoY
17,529
18,414
17,260
19,524
18,505
17,986
17,643
18,414
19,751
17,708
CoGS
19,519
Gross Profit
48,492 47,405 45,371 39,759 38,656 41,725 39,795 37,711 38,488 37,082 36,197
68.0%
67.6%
68.2%
67.4%
66.8%
GPM
71.3%
70.8%
71.0%
68.9%
68.7%
69.4%
39,910
39,199
40,663
37,283
37,680
36,906
35,928
40,559
SG&A
39,248
40,372
41,488
67.6%
67.0%
67.3%
66.2%
67.9%
66.9%
70.2%
69.6%
65.0%
SG&A / Sales
57.7%
60.3%
3,883
-800
-543
1,062
-114
427
808
175
269
7,033
Operating Profit
9,244
-44.8%
89.2%
-78.3%
53.7%
-23.9%
YoY
-10.2%
0.5%
0.3%
OPM
13.6%
10.5%
6.1%
-1.4%
-1.0%
1.8%
-0.2%
0.8%
1.4%
570
243
722
326
263
Non-Operating Income
810
740
715
612
382
691
174
83
99
111
338
11
75
Non-Operating Expenses
210
81
96
845
1,666
-25
1,066
1,035
635
174
-172
Recurring Profit
9,844
7,692
4,502
-1,033
-2.9%
-38.6%
-72.6%
-41.5%
YoY
-8.5%
-21.8%
1.8%
1.2%
0.3%
RPM
14.5%
11.5%
7.0%
-1.8%
-0.3%
2.8%
-0.0%
1.9%
Extraordinary Gains
594
72
147
61
93
42
238
566
38
Extraordinary Losses
561
597
577
1,669
192
390
451
467
276
494
310
558
528
542
Tax Charges
3,678
3,343
2,070
639
-128
862
816
534
19
-19
-38
20
8
-3
-22
2
Minority Interest
8
19
103
419
198
-601
1,907
-3,202
-233
473
-1,177
Net Income
5,597
4,327
- 306.8%
-52.7%
YoY
20.4%
-22.7%
-55.9%
-1.1%
-5.5%
-0.4%
0.8%
-2.0%
0.2%
0.7%
0.4%
Net Margin
8.2%
6.5%
3.0%
Paris Miki’s top-line sales grew to a peak of just under 84 billion yen in FY03/02 and then declined pretty much every year
for a cumulative peak-to-trough decline of 33.0% as of FY03/10. Gross profit margins are also on the downward trend.
Sales, General, and Administrative expenses have been largely determined by wages (the largest cost), rental expense,
and advertising (including promotion) expenses (see Cost Structure discussion in Business Description).
Operating profit margins have averaged 10.8% from FY03/00 until FY03/10. The company had operating losses in
FY03/09, FY03/10, and FY03/12.
The company has recognized some sizeable extraordinary losses during the period under review (FY03/00-FY03/11). In
FY03/01 and FY03/02, extraordinary losses were mainly the result of accounting changes related to pension fund (defined
benefit) obligations. The company discontinued the pension plan during FY03/03, and recognized a one-time charge of
3.2 billion yen. Extraordinary losses of 2.3 billion yen during FY03/05 were the result of inventory write down charges of
approximately 2.0 billion yen. Impairment losses and expenses related to store closures were the main components of a
1.7 billion yen extraordinary loss recorded in FY03/09.
66/75
R
Balance sheet
Balance Sheet
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
(JPYmn)
Cons.
Cons.
Cons.
Cons.
ASSETS
15,693
17,201
20,037
18,751
14,332
14,642
15,790
18,363
20,609
26,292
23,143
Cash and Equivalents
2,966
3,257
3,277
4,041
3,203
2,760
2,767
2,313
2,835
2,855
2,393
Accounts Receivable
814
814
865
882
811
610
610
3,776
4,018
3,646
609
Securities
10,244
9,658
10,308
11,034
10,237
9,993
9,185
9,791
9,381
Inventories
8,338
8,535
-167
-18
-15
-70
-100
-128
-187
-20
-30
-45
Allowance for Doubtful Accounts
-107
2,918
2,184
1,841
1,805
2,851
2,569
3,154
2,710
3,038
1,983
3,031
Other
Total Current Assets
40,576 44,413 38,944 34,212 32,523 36,518 34,922 29,854 31,569 32,892 32,461
11,974
11,584
11,350
11,327
11,247
11,995
13,008
12,903
13,400
Buildings
12,086
12,923
8,880
8,478
7,956
8,089
7,890
8,068
8,028
8,317
8,760
8,354
8,506
Equipment
1,062
1,062
1,062
1,062
1,051
1,051
1,051
1,051
1,051
1,070
1,068
Land
76
45
279
382
394
412
397
16
68
68
221
Leased Assets, Construction
34
108
122
131
128
33
37
33
52
24
Other
19
-14,675 -14,729 -15,487 -15,127 -15,498 -14,491 -14,766 -15,023 -15,529 -15,770 -15,594
Acc. Depreciation
5,410
5,709
5,646
6,174
7,004
7,693
7,845
7,039
7,081
6,926
6,782
Tangible Fixed Assets
219
124
315
410
481
149
157
Goodwill
384
482
851
1,307
1,566
1,606
1,254
396
445
272
Other
266
1,254
1,606
272
603
545
865
892
1,166
1,526
1,690
Total Intangible Assets
266
2,873
2,052
4,379
3,130
600
193
245
317
303
442
636
Investment Securities
2,000
Long-term Deposits
5,000
2,000
3,000
129
99
129
125
311
395
213
139
194
237
Long-term Receivables
336
8,422
7,491
7,039
6,605
6,090
8,908
9,588
10,284
11,153
Leaseholds and Security Deposits
11,771
11,251
482
362
258
174
115
596
786
999
1,186
Construction Assistance Funds
1,641
1,387
-11
-10
-26
-11
-11
-11
-10
-19
-11
-11
Allowance for Doubtful Accounts
-24
-31
-36
-70
Allowance for Losses in Investments in Affiliates
-26
941
833
691
533
946
461
617
276
392
537
Others
431
9,982 14,523 14,881 12,978 11,941
Total Other Fixed Assets
17,285 14,001 13,332 11,932 11,202 10,348
Total Fixed Assets
24,556 21,967 21,782 19,517 19,150 18,167 17,932 22,224 22,219 20,296 18,606
Total Assets
65,131 66,379 60,726 53,729 51,673 54,720 52,854 52,079 53,788 53,187 51,067
LIABILITIES
Accounts Payable
Short-Term Debt
Curr Portion of Long-Term Debt
Other Current Liabilities
Total Current Liabilities
Long-Term Debt
Other Long-Term Liabilities
Total Fixed Liabilities
Total Liabilities
SHAREHOLDER EQUITY (NET ASSETS)
Issued Capital
Reserves
Retained Earnings
Shares Held in Treasury
Securities Valuation Adjustment
Foreign Currency Adjustment
Subscription Rights to New Shares
Minority Interests
Total Shareholder Equity (Net Assets)
Working Capital
Interest-Bearing Debt
Net Cash
2,543
7,342
9,885
420
420
10,305
2,311
8
7,769
10,088
406
406
10,494
2,443
5,269
7,712
599
599
8,311
2,050
5,849
7,899
470
470
8,369
1,794
5,638
7,432
637
637
8,069
1,656
1,832
5,191
8,679
2,500
935
3,435
12,114
1,474
5,256
4,772
11,502
923
923
12,425
1,570
1,382
4,465
7,417
4,000
827
4,827
12,244
1,852
1,664
5,399
8,915
4,000
869
4,869
13,784
1,896
1,988
4,000
4,162
12,046
600
867
1,467
13,513
1,803
5,751
3,871
11,425
1,066
764
1,830
13,255
5,901
6,829
47,183
-6,123
414
468
5,901
6,829
48,145
-6,034
72
784
5,901
6,829
46,745
-8,387
22
963
5,901
6,829
41,153
-8,389
9
-394
5,901
6,829
39,297
-8,393
27
-313
5,901
6,829
38,496
-8,399
-3
-463
5,901
6,829
36,391
-8,401
21
-535
5,901
6,829
35,557
-8,401
44
-359
5,901
6,829
35,050
-8,402
165
145
152
54,824
8,188
26,920
185
55,884
8,984
8
30,303
341
52,415
9,705
24,256
249
45,359
10,054
18,973
253
43,602
10,226
17,811
246
42,606
11,192
4,332
16,315
220
40,428
11,973
5,256
14,306
262
39,834
11,365
5,382
14,832
313
40,003
12,497
5,664
11,843
5,901
6,829
34,321
-8,402
184
481
13
344
39,673
12,395
6,588
13,016
5,901
6,829
32,792
-8,402
13
384
35
257
37,811
11,400
6,817
11,690
Paris Miki’s Balance Sheet has been characterized by small amounts of debt and high levels of cash. The company has
been in a substantial net cash position (cash and equivalents - total interest bearing debt). The equity ratio has stayed at a
high level.
Balance Sheet Ratios
Quick Ratio
Current Ratio
Equity Ratio
FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
295.5%
327.4%
350.0%
269.2%
277.6%
270.6%
197.3%
248.0%
217.8%
163.3%
410.5%
440.3%
505.0%
433.1%
437.6%
420.8%
303.6%
402.5%
354.1%
273.1%
83.9%
83.9%
85.8%
84.0%
83.9%
77.4%
76.1%
76.0%
73.8%
73.9%
Assets
Assets on the company’s balance sheet have historically been cash (and equivalents) and inventories given that Paris Miki
does not normally own its stores. The balance sheet is highly liquid as illustrated by relatively high quick ratio (cash,
67/75
R
inventories, and receivables as a proportion of total current liabilities).
Inventory on the balance sheet is monitored by a POS system installed in the stores.
Non-current assets on the balance sheet are predominantly deposits for leases for the retail store network (fixed term land
leaseholds). The fixed-term land leaseholds are depreciated by a declining balance method during the useful life.
Depreciable assets on the balance sheet are related to store openings and refurbishments.
Liabilities
Most of the liabilities on the company’s balance sheet are current accounts payable. Although debt increased from
FY03/11 to FY03/14, interest-bearing debt has stayed at a level below that of cash and an equivalent, meaning the
company remains in a net cash position.
Shareholders’ Equity
Changes in shareholder equity have been largely determined by net income and dividends; there have been no instances
of notable valuation charges or similar adjustments.
68/75
R
Statement of cash flows
Cash Flow Statement
(JPYmn)
Operating Cash Flow (A)
Investment Cash Flow (B)
Free Cash Flow (A+B)
Financial Cash Flow
Depreciation & Amortization (A)
Capital Expenditures (B)
Working Capital Changes (C)
Simple FCF (NI + A + B - C)
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
7,436
4,676
1,390
-589
2,156
1,035
479
2,428
2,065
175
1,095
-478
1,642
-1,621
1,195
-1,643 -11,088
-421
-2,207
-137
2,876
-1,360
6,958
6,318
-231
606
513 -10,053
58
221
1,928
3,051
-265
-2,456
-3,250
-5,666
-2,438
-1,694
2,929
-151
-958
-806
-149
-694
1,246
1,274
1,505
1,510
1,402
1,511
1,534
1,480
1,387
1,289
1,242
-1,437
-1,510
-2,201
-1,520
-1,031
-1,374
-1,432
-1,400
-1,229
-1,265
-924
-858
796
721
349
172
966
781
-608
1,132
-102
-995
6,264
3,295
490
-3,561
-34
-356
-1,856
791
-555
324
712
Operating cash flows have been somewhat volatile; there were two instances of negative operating cash flow since
FY03/01. Negative operating cash flow in FY03/03 was a result of an increase in inventories (1.2 billion yen) and taxes
paid (6.6 billion yen). From FY03/13 and beyond, the company posted net income, pushing up operating cash flows.
Investment cash flows have reflected the company’s expansion and securities investment activities.
Financial cash flows have been defined by cash dividend payments and share buybacks. Cash used for dividend payment
and buybacks are shown below:
Financial Cash Flow
(JPYmn)
Dividend Payment
Treasury Stock Sale/Repurchase, net
Dividends and Treasury Operations
Financial Cash Flow
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
3,339
3,333
3,304
2,436
1,622
1,274
925
925
927
927
2,353
2
4
6
1
3,339
3,333
5,657
2,438
1,626
1,280
926
925
927
927
2,456
3,250
5,666
2,438
1,694
-2,929
151
958
806
149
Simple free cash flow (net income adjusted for depreciation and amortization, subtracting capital expenditures and
additions to working capital) has been relatively robust over FY03/00-FY03/08 period. Higher sales generally produced
higher cash flow, as in FY03/00-FY03/02 period. Simple free cash flow in FY03/04 coincides with the end of the company’s
capital expenditure cycle; store growth slowed from FY03/04 to FY03/14.
Simple free cash flow was negative in FY03/09, due in part to a net loss for the period of 3.2 billion yen. In FY03/13, simple
free cash flow increased thanks to net income recorded for the period.
The company’s cash conversion cycle is shown in the following table
Cash Conversion Cycle
(Days)
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Accounts Receivable Turnover
28.4
24.2
23.1
25.0
19.9
21.1
18.6
16.9
14.1
16.7
Days in Accounts Receivable
13
15
16
15
18
17
20
22
26
22
Inventory Turnover
2.3
2.3
2.0
1.8
1.9
1.8
1.9
1.8
1.8
1.6
Days in Inventory
156
160
185
199
190
198
189
199
204
233
Payables Turnover
7.7
8.4
7.6
8.8
9.8
11.1
13.4
11.3
9.9
9.1
Days in Payables
48
43
48
42
37
33
27
32
37
40
Cash Conversion Cycle (days)
121
131
153
172
171
183
182
188
194
215
The cash conversion cycle for Paris Miki has been on an increasing trend. The spread between inventory and payable
turnover has had the largest impact on the cash conversion cycle. Payables turnover has been increasing, indicating that
the company was paying suppliers more quickly in FY03/13 vs. FY03/09, which explains the overall increase in the cash
conversion cycle.
Paris Miki has used a POS system to manage inventory since 1990. Despite the ability to efficiently track and reorder the
69/75
R
inventory, the inventory cycle is an average of about 190 days. SR Inc. questions if this is the optimal use of company’s
capital. The company has a warehouse for inventory, but also maintains relatively high levels at its shops. Increasing free
cash flow by improving inventory turnover would allow the company to invest the cash into more productive purposes
(refurbishing stores or marketing, for example). Currently, the HQ merchandising department is providing guidance
regarding the inventory, however for the most part the inventory is kept at experience-based (and rarely questioned)
levels that are perceived by store managers as necessary to satisfy “customers’ needs”.
70/75
R
Paris Miki Holdings ＞ Other information
Other information
History
The roots of the company can be traced back to 1930, when the founder Yoshio Tane opened a small watch shop called
Seikakudo Tokeiten in Himeji City, in the Hyogo Prefecture. Miki Tokeiten Inc. was founded in Himeji in early 1950; the
company sold clocks and watches, jewelry, and eyeglasses. The company changed its name to Megane no Miki (“A Miki
store of glasses”) in 1960. Store growth was predominantly in the Hyogo Prefecture; brand recognition outside of the
prefecture was limited.
Growth of the business accelerated notably in 1973, when Tane opened a Miki-branded store in Paris, close to the
Mitsukoshi department store. The concept was simple: Japanese tourists shopping at Mitsukoshi would see the Miki store,
which would help create the association between the company and a sophisticated European image. Execution of the
marketing strategy began in Japan during 1974 with the creation of the Paris Miki company (later to merge with Megane
no Miki of Kansai region and renamed Paris Miki) to open retail stores in the Tokyo area. The store design was an effective
component of the overall effort: the “towers” of the castle façade were easily identifiable by customers and could be seen
from far away, rising above low-rise structures of the Japanese towns.
The company listed on JASDAQ in 1995, and was listed on the second section of the TSE in 1996. The company’s stock
was moved to the first section of the TSE in 1998.
News and topics
February 2016
On February 1, 2016, the company announced that Hiroshi Tane, president and representative director of main
subsidiary Paris Miki Co., would be stepping down from his post following his resignation. Director Masahiro Sawada has
been newly appointed as representative director, slated to come into effect February 8, 2016.
September 2015
On September 14, 2015, the company announced that it will implement a shareholder benefit program to
commemorate the 20th anniversary of its stock exchange listing.
Details of the commemorative shareholder benefit program
The program includes the issuance of investor benefit cards and incentives for long-term shareholders.
Benefit cards
Shareholders whose name appears on the register of shareholders, or those who own one unit of shares (100 shares) or
more as of September 30, 2015, or March 31, 2016, will be sent cards, which can be used to receive a 20% discount on
glasses purchased at any Paris Miki, Megane no Miki, OPTIQUE PARIS MIKI, or MIKISSIMES GINZA store. Each qualifying
shareholder will be given three cards, and can use the card for up to five people when making purchases.
Benefits for long-term shareholders
Of the shareholders whose name appears on the register of shareholders, or those who own one unit of shares (100
shares) or more as of September 30, 2015, a survey will be sent to those who have held the company’s shares for 10 years
71/75
R
or more. Candidates will then be selected based on the answers to the survey, and offered benefits based on a lottery.
The company is finalizing details of the benefits but plans to offer travel plans linked to its group businesses.
The company has stated that this shareholder benefit program is limited to this one time and will not be continued. It will
examine future programs in light of its overall shareholder policy.
August 2015
On May 25, 2015, the company announced changes to executive management.
At a meeting held on the same day, the board of directors agreed upon changes to the representative director and
officers of the company. The company plans to officially decide upon these changes at the ordinary general meeting of
shareholders to be held on June 23, 2015, and the subsequent meetings of the board of directors and board of corporate
auditors.
Overview of the changes
Name
New role
Current role
Mikio Tane
Representative director and vice president
Director
Junichi Kaga
Director and vice president
Jiro Nagata
Senior councilor (Miki Group)
Tomoko Aramaki
Director and head of IR
Non-executive director
Top management
Hiroshi Tane, President of Paris Miki Holdings, is the oldest son of the company’s founder; born in 1931. Tane joined the
company in 1950 at the age of 19, and was made an Executive Director in 1957. Tane became the company CEO in 1986
and Chairman in 1988.
Mikio Tane, Vice President of Paris Miki Holdings, born in 1959; joined the company in 1984.
Junichi Kaga, Vice President of Paris Miki Holdings, born in 1954; joined the company in 1977. Responsible for overseas
operations.
Employees
At the end of FY03/16, the company employed 4,618 employees (3,227 full-time, 1,391 contract).
72/75
R
Major shareholders
Top Shareholders
Lunettes Inc.
Codomo Limited
HAL International Investments N.V.
Employee Stock Ownership
Mikio Tane
CA Indosuez(Switzerland) SA
Hiroshi Tane
Japan Trustee Services Bank, Ltd. (Trust Account)
SMBC Trust Bank Ltd. Designated Securities Trust
Nobuhiko Tane
Amount
Held
27.11%
10.11%
7.27%
4.20%
2.21%
2.16%
1.97%
1.73%
1.48%
1.39%
As of March 31, 2016
The largest shareholder is Hiroshi Tane, the President of the company. In addition to direct holdings, his ownership is
represented through Lunettes Inc., Codomo Limited.
Investor relations
The company holds Q2 and full year results meetings, and maintains an IR website in both English and Japanese.
73/75
R
Company profile
Company Name
Head Office
PARIS MIKI HOLDINGS Inc.
Konan, Minato-ku
4-1-8
Tokyo, Japan 140-0001
Phone
Listed On
+81-3-6408-8601
Tokyo Stock Exchange 1st Section
Established
Exchange Listing
January 27, 1950
August 9, 1995
Website
Fiscal Year-End
http://www.paris-miki.com/index.html
March
IR Contact
IR Web
http://www.paris-miki.com/investor/index.html
IR Mail
IR Phone
74/75
R
About Shared Research Inc.
We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by
presenting a continuously updated third-party view of business fundamentals, independent of investment biases. Shared Research can be found on
the web at http://www.sharedresearch.jp.
Current Client Coverage of Shared Research Inc.
Accretive Co., Ltd.
FreeBit Co., Ltd.
Nippon Parking Development Co., Ltd.
Accordia Golf Trust
FUJITA KANKO INC.
Nisshinbo Holdings Inc.
Adastria Co., Ltd.
Gamecard-Joyco Holdings, Inc.
Ono Sokki Co., Ltd.
AEON DELIGHT Co.
GCA Savvian Corporation
Onward Holdings Co., Inc.
Ai Holdings Corp.
Grandy House Corp.
Paris Miki Holdings Inc.
Aiming Inc.
Gulliver International Co., Ltd.
NS Tool Co.
AnGes MG Inc.
Hakuto Co., Ltd.
NTT Urban Development Corporation
Anicom Holdings, Inc.
Happinet Corporation
Pigeon Corp.
Anritsu Corporation
Harmonic Drive Systems Inc.
Resorttrust, Inc.
Apamanshop Holdings Co., Ltd.
Hearts United Group Co., Ltd.
Round One Corp.
ArtSpark Holdings Inc.
Heiwa Real Estate Co., Ltd.
Ryohin Keikaku Co., Ltd.
AS ONE Corporation
IID, Inc.
SanBio Company Limited
Axell Corporation
Infomart Corp.
Sanix Incorporated
Azbil Corporation
Intelligent Wave Inc.
Sanrio Co., Ltd.
Bell-Park Co., Ltd.
istyle Inc.
SATO Holdings Corp.
Benefit One Inc.
Itochu Enex Co., Ltd.
SBS Holdings, Inc.
Canon Marketing Japan Inc.
ITO EN, Ltd.
Ship Healthcare Holdings Inc.
Carna Biosciences, Inc.
J Trust Co., Ltd
SMS Co., Ltd.
Chiyoda Co., Ltd.
Japan Best Rescue System Co., Ltd.
SOURCENEXT Corporation
Chugoku Marine Paints, Ltd.
JIN Co., Ltd.
Star Mica Co., Ltd.
Cocokara Fine, Inc.
Kameda Seika Co., Ltd.
SymBio Pharmaceuticals Limited
Comsys Holdings Corporation
Kenedix, Inc.
Takashimaya Co., Ltd.
CRE, Inc.
LAC Co., Ltd.
Takihyo Co., Ltd.
Creek & River Co., Ltd.
Lasertec Corp.
Tamagawa Holdings Co., Ltd
Daiseki Corp.
MAC-HOUSE Co.
TEAR Corporation
DIC Corporation
Matsui Securities Co., Ltd.
3-D Matrix, Ltd.
Digital Garage Inc.
Medinet Co., Ltd.
TOKAI Holdings Corp.
Don Qijote Holdings Co., Ltd.
MEGANESUPER CO., LTD.
WirelessGate, Inc.
Dream Incubator Inc.
Milbon. Co., Ltd.
Yellow Hat Ltd.
Elecom Co.
MIRAIT Holdings Corp.
Yumeshin Holdings
EMERGENCY ASSISTANCE JAPAN Co.
MONEY SQUARE HOLDINGS, INC.
V-cube, Inc.
en-Japan Inc.
NAGASE & CO., LTD
VOYAGE GROUP, Inc.
FerroTec Corp.
NAIGAI TRANS LINE LTD.
ZAPPALLAS, INC.
Fields Corp.
NanoCarrier Ltd.
Financial Products Group Co., Ltd.
Nichi-Iko Pharmaceutical Co., Ltd.
Attention: If you would like to see firms you invest in on this list, ask them to become our Client, or sponsor a report yourself.
Disclaimer
This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared Research
Inc. offers no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report. Shared Research
Inc. shall not be held responsible for any damage caused by the use of this report.
The copyright of this report and the rights regarding the creation and exploitation of the derivative work of this and other Shared Research Reports
belong to Shared Research Inc. This report may be reproduced or modified for personal use; distribution, transfer, or other uses of this report are
strictly prohibited and a violation of the copyright of this report. SR Inc. officers and employees may currently, or in the future, have a position in
securities of the companies mentioned in this report, which may affect this report’s objectivity.
Japanese Financial Instruments and Exchange Law (FIEL) Disclaimer
The report has been prepared by Shared Research Inc. (“SR”) under a contract with the company described in this report (“the Company”).
Opinions and views presented are SR’s where so stated. Such opinions and views attributed to the Company are interpretations made by SR. SR
represents that if this report is deemed to include an opinion by SR that could influence investment decisions in the Company, such opinion may be
in exchange for consideration or promise of consideration from the Company to SR.
Contact Details
Shared Research.inc
3-31-12 Sendagi Bunkyo-ku Tokyo, Japan
http://www.sharedresearch.jp
Phone: +81 (0)3 5834-8787
Email: info@sharedresearch.jp
75/75

Paris Miki Holdings | 7455 |

Transcription

Similar documents

Management Outlook and Growth Strategy

FY03/2010

HOT SHOT: MIKI VALE - Sleeping Giant Music

Thomas Quasthoff. - Philharmonie de Paris

gift ideas - Karen Carter Chemist

french leader in the information about higher education

Results of Operations Six Months Ended September 30, 2015

Exchange Programme at Paris1 Pantheon Sorbonne

UBANGI-SHARI-CHAD OUBINGUI·CHARI·TCHAO

texte à partager_site EN - Passerelle Centre d`art contemporain