PERFORMANCE BY BRAND
Theory Women’s and Theory Men’s
Aiming to maintain and enhance the value of Theory brand, Theory Women’s operations in Japan restrained new openings of stores, instead, renovated and expanded the floor space of existing stores, in an effort to improve per-store efficiency. Theory Luxe, started as a size extension of the Theory Women’s line, achieved nearly 10% sales growth on comparables stores basis, by raising the profile of this unique brand, incorporating designs from the Premise brand in the United States. Theory Men’s operations expanded sales through the opening of new retail stores, mainly in prominent department stores. The breakdown of openings and closings of stores in Japan is as follows:
In the United States, LTH continued expanding our wholesale business by increasing premium department store volume, LTH’s core customers. Thus LTH was able to boost the market profile of the Theory brand. In the retail sector, we steadily raised brand recognition by opening three new stores during the year, bringing the number of directly managed Theory retail stores in the United States to 33.
In Europe, LTH actively pursued wholesale sales to premium department stores and other local customers. In April 2008, LTH opened a directly managed Theory store in London. This is the second directly managed store in Europe, following the Paris store, which opened in March 2007. These measures have contributed to elevated brand recognition in Europe. As a result, sales of the Theory Women’s segment rose 1.0% from the previous year, to ¥41,256 million, and sales of the Theory Men’s segment grew 2.2%, to ¥5,532 million.
Operating profit of Theory Women’s and Theory Men’s, excluding amortization expenses of goodwill and trademarks, increased to ¥6,733 million (32.1% year-on-year) and operating margin reached 14.4％.
Rosner
The sales of Rosner operations, particularly wholesales, were sluggish. Their net sales during this fiscal year decreased to ¥6,334 million (-16.0% year-on-year).
Urbanholics
The Urbanholics segment, which handles our casual lines in Japan, such as Joie and 7 for All Mankind, recorded a decline in wholesale sales. LTH restructured this segment by streamlining our store network, which resulted in the opening of three new stores and the closure of five existing ones. As a result, segment sales decreased 13.8%, to ¥1,319 million.
Proof (Kulson)
The Proof brand, restarted from the Kulson brand in the 2007 spring/summer season. However, LTH decided to discontinue the brand in the 2007 autumn/winter season, and had closed all stores by February 2008. Segment sales totaled ¥364 million, down 71.6% from the previous year.
Others
In this year, the PLS+T brand performed favorably, boosted by increased sales of original items. LTH also continued to report steady sales of the Helmut Lang brand. At fiscal year-end, there were 21 stores in this segment in Japan, following the opening of five new stores and the closure of one. In the United States, the opening of four Helmut Lang stores and the closure of one brought the total to three stores. Segment sales jumped dramatically, increasing 81.2%, to ¥5,079 million.
Theory Women’s and Theory Men’s
Aiming to maintain and enhance the value of Theory brand, Theory Women’s operations in Japan restrained new openings of stores, instead, renovated and expanded the floor space of existing stores, in an effort to improve per-store efficiency. Theory Luxe, started as a size extension of the Theory Women’s line, achieved nearly 10% sales growth on comparables stores basis, by raising the profile of this unique brand, incorporating designs from the Premise brand in the United States. Theory Men’s operations expanded sales through the opening of new retail stores, mainly in prominent department stores. The breakdown of openings and closings of stores in Japan is as follows:
| Brands | Store Opened | Stores Renovated | Stores Closed | No. of stores at Year-end |
| 「Theory」women's | 1 | 3 | - | 50 |
| 「Theory」men's | 5 | 1 | 1 | 34 |
| 「Theory luxe」 | 1 | 2 | - | 39 |
| 「Theory petit」 | 2 | 1 | - | 10 |
| Total | 9 | 7 | 1 | 133 |
In the United States, LTH continued expanding our wholesale business by increasing premium department store volume, LTH’s core customers. Thus LTH was able to boost the market profile of the Theory brand. In the retail sector, we steadily raised brand recognition by opening three new stores during the year, bringing the number of directly managed Theory retail stores in the United States to 33.
In Europe, LTH actively pursued wholesale sales to premium department stores and other local customers. In April 2008, LTH opened a directly managed Theory store in London. This is the second directly managed store in Europe, following the Paris store, which opened in March 2007. These measures have contributed to elevated brand recognition in Europe. As a result, sales of the Theory Women’s segment rose 1.0% from the previous year, to ¥41,256 million, and sales of the Theory Men’s segment grew 2.2%, to ¥5,532 million.
Operating profit of Theory Women’s and Theory Men’s, excluding amortization expenses of goodwill and trademarks, increased to ¥6,733 million (32.1% year-on-year) and operating margin reached 14.4％.
Rosner
The sales of Rosner operations, particularly wholesales, were sluggish. Their net sales during this fiscal year decreased to ¥6,334 million (-16.0% year-on-year).
Urbanholics
The Urbanholics segment, which handles our casual lines in Japan, such as Joie and 7 for All Mankind, recorded a decline in wholesale sales. LTH restructured this segment by streamlining our store network, which resulted in the opening of three new stores and the closure of five existing ones. As a result, segment sales decreased 13.8%, to ¥1,319 million.
Proof (Kulson)
The Proof brand, restarted from the Kulson brand in the 2007 spring/summer season. However, LTH decided to discontinue the brand in the 2007 autumn/winter season, and had closed all stores by February 2008. Segment sales totaled ¥364 million, down 71.6% from the previous year.
Others
In this year, the PLS+T brand performed favorably, boosted by increased sales of original items. LTH also continued to report steady sales of the Helmut Lang brand. At fiscal year-end, there were 21 stores in this segment in Japan, following the opening of five new stores and the closure of one. In the United States, the opening of four Helmut Lang stores and the closure of one brought the total to three stores. Segment sales jumped dramatically, increasing 81.2%, to ¥5,079 million.
PERFORMANCE BY REGION
Japan
In Japan, LTH opened 18 retail stores and closed 21, for a total of 175 stores at fiscal year-end. The number of closed stores includes 14 Proof stores, which went out of business, and the total number of store has consequently decreased from a year earlier. Net sales stay at the same level as last year, but gross margin significantly improved due to a successful inventory control and reduction of purchase price. On a consolidated basis, regional sales increased 0.6% year-on-year to ¥22,476 million and regional operating income increased 64.1% to ¥3,598 million.
North America
In North America, LTH opened seven retail stores and closed two, for a total of 36 stores at fiscal year-end. Regional net sales significantly increased because net sales of Helmut Lang brand has been contributed in addition to newly opened retail stores. Also, expense increased as promotion and designing fee as well as store openings expense increased due to expansion of the Helmut Lang business. On a consolidated basis, regional sales grew 6.7% year-on-year to ¥31,498 million, and regional operating income increased 70.1% to ¥1,843 million.
Europe
In Europe, Theory operations turned out to be quite favorable on the contrary to a weak net sales of Rosner; however, operating income improved as a result of recovered gross margin and successful expense control. On a consolidated basis, regional sales decreased 7.1% year-on-year to ¥8,192 million, and regional operating loss decreased to ¥1,496 million, from ¥1,726 million in the previous year.
Others
LTH, through its local subsidiaries, opened four retail stores in mainland China and three stores in Hong Kong. As a result, there were 11 retail stores in Asia (excluding Japan) at fiscal year-end. On a consolidated basis, regional sales fell 16.5% year-on-year to ¥417 million, and regional operating income amounted to ¥17 million (regional operating loss of ¥6 million in the previous year).
Japan
In Japan, LTH opened 18 retail stores and closed 21, for a total of 175 stores at fiscal year-end. The number of closed stores includes 14 Proof stores, which went out of business, and the total number of store has consequently decreased from a year earlier. Net sales stay at the same level as last year, but gross margin significantly improved due to a successful inventory control and reduction of purchase price. On a consolidated basis, regional sales increased 0.6% year-on-year to ¥22,476 million and regional operating income increased 64.1% to ¥3,598 million.
North America
In North America, LTH opened seven retail stores and closed two, for a total of 36 stores at fiscal year-end. Regional net sales significantly increased because net sales of Helmut Lang brand has been contributed in addition to newly opened retail stores. Also, expense increased as promotion and designing fee as well as store openings expense increased due to expansion of the Helmut Lang business. On a consolidated basis, regional sales grew 6.7% year-on-year to ¥31,498 million, and regional operating income increased 70.1% to ¥1,843 million.
Europe
In Europe, Theory operations turned out to be quite favorable on the contrary to a weak net sales of Rosner; however, operating income improved as a result of recovered gross margin and successful expense control. On a consolidated basis, regional sales decreased 7.1% year-on-year to ¥8,192 million, and regional operating loss decreased to ¥1,496 million, from ¥1,726 million in the previous year.
Others
LTH, through its local subsidiaries, opened four retail stores in mainland China and three stores in Hong Kong. As a result, there were 11 retail stores in Asia (excluding Japan) at fiscal year-end. On a consolidated basis, regional sales fell 16.5% year-on-year to ¥417 million, and regional operating income amounted to ¥17 million (regional operating loss of ¥6 million in the previous year).
