PERFORMANCE BY BRAND
Theory Women’s and Theory Men’s
Aiming to maintain and enhance the value of Theory brand, the Theory Women’s operations in Japan did not proceed with a large expansion. Rather, they renovated and expanded the floor space of existing stores, in an effort to improve per-store efficiency. In contrast, operations for Theory Men’s and Theory Luxe, a size extension of Theory Women’s line, expanded their sales volumes by opening stores, particularly in upscale department stores. Theory Women’s operations opened one new store and renovated one store. The Theory Men’s operations opened two new stores, renovated one store, and closed one store. The Theory Luxe operations opened one new store and renovated one store. Theory Petit operations renovated one store. In the U.S. wholesale business, we continued to improve the visibility of the Theory brand. We expanded floor space in major upscale department stores, our core business in the US. We maintained a close relationship with these stores for product development. Theory Men’s operations increased their sales, by upgrading their product assortment and expanding the floor space in certain department stores. The Theory Accessories operations, which handle shoes and bags, added distribution channels and received increased inquiries from potential customers. The operations were able to provide customers with products fit for their lifestyle. Our U.S. retail business increased sales due to the opening of two stores in major urban areas, where our consumer is predominant. In addition, brand recognition was improved steadily.
The Theory Europe operation continued to promote the wholesale of Theory products to European customers, utilizing the infrastructure of Rosner GmbH & Co. KG (Rosner), a subsidiary in Germany. The retail store in Paris increased sales steadily.
As a result, during the interim fiscal period, Theory Women’s operation recorded ¥20,740 million (+3.5% year-on-year) in net sales on a consolidated basis, and Theory Men’s operations, ¥3,109 million (+8.1% year-on-year).
Rosner
Rosner operations, particularly in terms of wholesale, suffered from sluggish sales. Their net sales during the interim fiscal period decreased to ¥3,326 million (-19.1% year-on-year).
Urbanholics
Urhanholics Co., Ltd., the holding group housing our casual fashion business in Japan, including brands such as Joie, 7 For All Mankind etc., continued to increase sales, particularly wholesale. The company intensified its efforts toward improvement of the business structure through restructuring unprofitable stores, etc. During the interim fiscal period, the company opened one store and closed three stores. Its net sales during the interim fiscal period decreased to ¥734 million (-1.4% year-on-year).
Proof (Kulson)
Proof made its debut with the Spring/Summer 2007 collection as an upgraded version of the former Kulson brand with a new design team. However, we exited the business at the end of 2007 Fall/Winter season; thus, at the end of February 2008, we closed all stores. The net sales of this operations during the interim fiscal period decreased to ¥351 million (-57.6% year-on-year).
Others
PLS+T operations performed well, benefiting from growing sales of original products. Helmut Lang operations continued to increase their sales steadily. We opened seven stores and closed one store. As a result, the number of stores reached 23 in total. The net sales during the interim fiscal period rose to ¥2,783 million (+185.0% year-on-year).
Theory Women’s and Theory Men’s
Aiming to maintain and enhance the value of Theory brand, the Theory Women’s operations in Japan did not proceed with a large expansion. Rather, they renovated and expanded the floor space of existing stores, in an effort to improve per-store efficiency. In contrast, operations for Theory Men’s and Theory Luxe, a size extension of Theory Women’s line, expanded their sales volumes by opening stores, particularly in upscale department stores. Theory Women’s operations opened one new store and renovated one store. The Theory Men’s operations opened two new stores, renovated one store, and closed one store. The Theory Luxe operations opened one new store and renovated one store. Theory Petit operations renovated one store. In the U.S. wholesale business, we continued to improve the visibility of the Theory brand. We expanded floor space in major upscale department stores, our core business in the US. We maintained a close relationship with these stores for product development. Theory Men’s operations increased their sales, by upgrading their product assortment and expanding the floor space in certain department stores. The Theory Accessories operations, which handle shoes and bags, added distribution channels and received increased inquiries from potential customers. The operations were able to provide customers with products fit for their lifestyle. Our U.S. retail business increased sales due to the opening of two stores in major urban areas, where our consumer is predominant. In addition, brand recognition was improved steadily.
The Theory Europe operation continued to promote the wholesale of Theory products to European customers, utilizing the infrastructure of Rosner GmbH & Co. KG (Rosner), a subsidiary in Germany. The retail store in Paris increased sales steadily.
As a result, during the interim fiscal period, Theory Women’s operation recorded ¥20,740 million (+3.5% year-on-year) in net sales on a consolidated basis, and Theory Men’s operations, ¥3,109 million (+8.1% year-on-year).
Rosner
Rosner operations, particularly in terms of wholesale, suffered from sluggish sales. Their net sales during the interim fiscal period decreased to ¥3,326 million (-19.1% year-on-year).
Urbanholics
Urhanholics Co., Ltd., the holding group housing our casual fashion business in Japan, including brands such as Joie, 7 For All Mankind etc., continued to increase sales, particularly wholesale. The company intensified its efforts toward improvement of the business structure through restructuring unprofitable stores, etc. During the interim fiscal period, the company opened one store and closed three stores. Its net sales during the interim fiscal period decreased to ¥734 million (-1.4% year-on-year).
Proof (Kulson)
Proof made its debut with the Spring/Summer 2007 collection as an upgraded version of the former Kulson brand with a new design team. However, we exited the business at the end of 2007 Fall/Winter season; thus, at the end of February 2008, we closed all stores. The net sales of this operations during the interim fiscal period decreased to ¥351 million (-57.6% year-on-year).
Others
PLS+T operations performed well, benefiting from growing sales of original products. Helmut Lang operations continued to increase their sales steadily. We opened seven stores and closed one store. As a result, the number of stores reached 23 in total. The net sales during the interim fiscal period rose to ¥2,783 million (+185.0% year-on-year).
PERFORMANCE BY REGION
Japan
In Japan, LTH opened nine retail stores and closed nineteen, concluded the interim fiscal period with a total of 168 stores. The closed stores include 14 Proof stores, which exited the business, and the total number of store has consequently decreased from the end of last fiscal year. Net sales for LTH stay at the same level as last year, but gross margin significantly improved due to successful inventory control and a reduction of purchase price. On a consolidated basis, regional sales increased 0.1% year-on-year to ¥11,748 million and regional operating income increased 49.6% to ¥1,900 million.
North America
In North America, LTH opened five retail stores, for a total of 36 stores at the end of the interim fiscal period. Regional net sales significantly increased because net sales of Helmut Lang and Premise, as well as revenue generated by newly opened retail stores. Simultaneously, expense increased due to promotion, design and retail cost associated with the establishment of such new brands. On a consolidated basis, regional sales grew 18.2% year-on-year to ¥16,193 million, and regional operating income increased 866.5% to ¥873 million.
Europe
In Europe, Theory operations turned out to be quite favorable in contrary to weak net sales of Rosner. Operating loss improved as a result of improved gross margin and successful expense control. On a consolidated basis, regional sales decreased 12.1% year-on-year to ¥4,223 million, and regional operating loss decreased 31.5% to ¥460 million.
Others
Through local subsidiaries, LTH has expanded retail operations in Asia (excluding Japan). During the interim fiscal period, the company opened one retail store in mainland China and one store in Hong Kong. As a result, there were six retail stores in Asia (excluding Japan) at the end of interim fiscal period. On a consolidated basis, regional sales fell 4.9% year-on-year to ¥194 million, and regional operating income amounted to ¥4 million (regional operating loss of ¥25 million in the previous fiscal year).
Japan
In Japan, LTH opened nine retail stores and closed nineteen, concluded the interim fiscal period with a total of 168 stores. The closed stores include 14 Proof stores, which exited the business, and the total number of store has consequently decreased from the end of last fiscal year. Net sales for LTH stay at the same level as last year, but gross margin significantly improved due to successful inventory control and a reduction of purchase price. On a consolidated basis, regional sales increased 0.1% year-on-year to ¥11,748 million and regional operating income increased 49.6% to ¥1,900 million.
North America
In North America, LTH opened five retail stores, for a total of 36 stores at the end of the interim fiscal period. Regional net sales significantly increased because net sales of Helmut Lang and Premise, as well as revenue generated by newly opened retail stores. Simultaneously, expense increased due to promotion, design and retail cost associated with the establishment of such new brands. On a consolidated basis, regional sales grew 18.2% year-on-year to ¥16,193 million, and regional operating income increased 866.5% to ¥873 million.
Europe
In Europe, Theory operations turned out to be quite favorable in contrary to weak net sales of Rosner. Operating loss improved as a result of improved gross margin and successful expense control. On a consolidated basis, regional sales decreased 12.1% year-on-year to ¥4,223 million, and regional operating loss decreased 31.5% to ¥460 million.
Others
Through local subsidiaries, LTH has expanded retail operations in Asia (excluding Japan). During the interim fiscal period, the company opened one retail store in mainland China and one store in Hong Kong. As a result, there were six retail stores in Asia (excluding Japan) at the end of interim fiscal period. On a consolidated basis, regional sales fell 4.9% year-on-year to ¥194 million, and regional operating income amounted to ¥4 million (regional operating loss of ¥25 million in the previous fiscal year).
