Top Message | Investor Relations

I would like to thank you, our shareholders, for your steadfast support of Aoyama Trading Company, Ltd. (the “Company”).
I would also like to express my heartfelt sympathy to all those in the areas affected by the Great East Japan Earthquake which occurred in March of this year.I sincerely pray for their early recovery and we will do our best for the restoration of the affected areas.
Unfortunately,the Aoyama Trading Group recorded declines in both sales and profits for a third consecutive year.This performance reflected decrease in sales in the region struck by the Great East Japan Earthquake and other factors.
In this challenging business environment,we will strengthen the organization and cultivate human resources to appropriately and swiftly respond to changes in diversifying customer needs and further expand market share.
In all our endeavors,I would be grateful for your continued understanding and support.

Brakes Put on Decrease in Customers

The Group's business results reflected the adverse business environment.Net sales were ¥193,246 million, 99.3％ of the previous year's level and operating income was ¥13,359 million,90.4％ of the previous year's level.
In the mainstay suit business,we continued to strive to expand market share by constantly opening new stores mostly in Tokyo and the three neighboring prefectures.In addition,we implemented various measures to increase the number of customers.These measures include the “special sale” campaign implemented in May 2010 at all Yofuku-no-Aoyama stores in order to attract new customers mainly by appealing to them in terms of price.
Also,we opened the Ginza Honten Store in October 2010 and the Shibuya Ekimae So-honten Store in November 2010 as our flagship urban stores,and at same time conducted an opening commemoration sale at all stores.
In womenswear,we bolstered the line-up of functional products,such as the “Aqua Wash Suit” which can be washed at home,and newly featured actress Nozomi Sasaki as a spokesperson of womenswear in February 2011.Through these efforts, we won new customers,resulting in brisk sales.The number of existing-store customers increased to 102.7％ of the previous year's level.
With regard to the suits,our main product item,the number sold was 2,522,000, or 100.3％ of the previous year's level,thus putting the brakes on the decrease in the number sold for the first time in three years.Meanwhile,the average unit selling price continued to decline,resulting in ¥23,578, or 96.2％ of the previous year's level.

Strengthened Line-up of Cool Biz Products, etc.

The environment surrounding the Company is expected to remain challenging given factors such as the lackluster personal consumption and intensifying competition.
Furthermore,the Great East Japan Earthquake which occurred in March 2011 has heightened uncertainties about the Japanese economy.
Amid these circumstances,in the core suit business,we will strive to achieve restoration of the affected areas as soon as possible and bolster the line-up of Cool Biz products in response to electricity saving-related demand.Through such initiatives,we are intent on swiftly and accurately responding to diversifying customer needs.

[Net Sales : Consolidated]

[Operating Income / Net Income : Consolidated]

Menswear Retail Business

This business comprises four companies—Aoyama Trading Co., Ltd., Blue Reverse Co., Ltd., MDS Co., Ltd., and Eisho Co., Ltd. Casual Land Aoyama Co., Ltd. had been included in menswear retail business up to now,but was excluded from this business and included in “others” due to the application of the new accounting standard from the year under review.
Sales from the menswear retail business were ¥162,882 million,100.7％ of the previous year's level,and operating income was ¥12,891 million,95.0％ of the previous year's level.

Aoyama Trading Co., Ltd.

Existing-store sales were 99.3％ of the previous year's level.The number of suits sold was 2,522,000, or 100.3％ of the previous year's level,thus putting the brakes on the decrease in the number sold for the first time in three years.Meanwhile,the average unit selling price for suits continued to decline, resulting in ¥23,578, or 96.2％ of the previous year's level.
The Company newly opened 17 Yofuku-no-Aoyama stores (including six relocated stores) and closed 1 inefficient store during the year under review. Furthermore, the Company opened 1 The Suit Company (TSC) store while it closed 1 The Suit Company's Weekend store,and eliminated the business format.
As a result,sales were ¥162,300 million,100.6％ of the previous year's level and operating income was ¥12,419 million,95.5％ of the previous year's level.

Credit Card Business

The number of “Aoyama Card” members amounted to 3.7 million at the end of February 2011 (same as the previous year),and the balance of operating loans was ¥40,947 million.
Due to the impact of the revised Money Lending Business Act, sales were ¥4,055 million,74.0％ of the previous year's level,and operating income was ¥31 million,8.3％ of the previous year's level.

Commercial Printing Business

We placed priority on the cultivation of relationships with existing customers,reinforcement of efforts to win new customers,and development of new businesses.
Due to the impact of the Great East Japan Earthquake,forward-looking investments for new businesses,and other factors,sales were ¥10,631 million,104.9％ of the previous year's level,and operating income was ¥9 million, 5.6％ of the previous year's level.

Sundry Sales Business

This business involves the operation of “Daiso & Aoyama 100 Yen Plaza” shops on premises previously occupied by Yofuku-no-Aoyama or CALAJA stores or on premises shared with Yofuku-no-Aoyama stores to achieve synergy.
As a result of the opening of 6 new shops and closing 5 inefficient shops during the year under review,the total number of Daiso & Aoyama 100 Yen Plaza shops was 129 at the end of February 2011.
With industry competition on the rise as businesses in different formats enter the scene,sales were ¥16,399 million,94.9％ of the previous year's level,while operating income was ¥385 million,75.3％ of the previous year's level.

Others

With respect to Casual Land Aoyama Co., Ltd., which was excluded from the“menswear retail business” and included in “others” due to the application of the new accounting standard,existing-store sales were 92.5％ of the previous year's level due to factors such as sluggish personal consumption.
As for stores,we opened 3 2nd STREET stores,1 JUMBLE STORE store,1 LEVI'S STORE store,and closed 4 CALAJA stores.As a result,the number of stores at the end of March 2011 was 26 CALAJA stores,4 2nd STREET stores,1 JUMBLE STORE store,and 2 LEVI'S STORE stores.
Also,in a bid to expand the casual wear business as a franchise of the U.S. AMERICAN EAGLE OUTFITTERS,we newly established Eagle Retailing Corporation in December 2010 through a joint venture between Aoyama Trading Co., Ltd. and Sumikin Bussan Corporation and plan to open a new store of AMERICAN EAGLE OUTFITTERS as the first standalone store in Japan in Omotesando (Shibuya Ward, Tokyo) in Spring 2012.
As a result of the above,sales from “others” were ¥3,502 million, 100.9％ of the previous year's level,and the operating loss was ¥292 million.

March 31, 2011
President and CEO

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