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Last Update:2022/07/08

We will return to the origin of customer capital and tackle drastic structural reform of mail order business. Mr. Kajiwara Kenji, President and Representative Director

I would like to express my gratitude to all our shareholders for their continued support.

In 2021, sales in the mail-order and online shopping business were firm in relation to 2019, which was before the pandemic. However, sales were down 12.2% from 2020 to 73,149 million yen. The main reasons were the decline in the temporary upturn in demand when people stayed home during the pandemic and the removal of the bridal business from the consolidated financial statements at the end of the first quarter of 2021. This business was sold as part of a reexamination of the Senshukai Group’s business portfolio.
Although earnings were lower in the mail-order and online shopping business because of the decline in sales, consolidated earnings increased due to the smaller bridal business loss. Operating profit was 349 million yen compared with a 389 million yen loss in 2020, ordinary profit improved to 520 million yen from the previous year’s 3,800 million yen loss, and profit attributable to owners of parent was 308 million yen following the 3,946 million yen loss in 2020. More information about our performance in 2021 is in the summary of financial results that was announced on February 10, 2022.
On May 13, 2022, we announced downward revisions to our forecast for 2022 mainly because of a decrease in orders caused by problems with the new core IT system that we started using in January 2022 and expenses to end these problems. Furthermore, geopolitical risk is increasing, particularly involving the Ukraine crisis and China’s zero-Covid policy, and the yen has depreciated quickly. As a result, we expect that the cost of procuring merchandise will increase and anticipate higher prices for the materials that we use. These events are making our business climate increasingly difficult.
We are determined to raise our corporate value as these unprecedented and rapid changes in our business climate take place. Accomplishing this goal will require upgrading the structural reforms that have produced benefits in previous years and continuing to focus on cost reduction and other measures to operate more efficiently. There is also an urgent need to quickly shift to a business model centered on the use of digital technologies for the highly accurate segmentation of individual customers and the proper use of frequent communications with our customers. With these goals in mind, the Senshukai Group is focusing on these three activities in order to be profitable.
(1) Achieve a suitable mix of promotional activities by strengthening activities using digital technologies.
(2) Growth of the advertising solutions business
(3) The use of co-creation for the expansion and reinforcement of services

Although we do not plan to pay a dividend for 2022, we will continue the shareholder benefit program.

We are determined to resume dividend payments as soon as possible. Activities will be centered on investments for transforming our operations to a unique and new business model that enables the Senshukai Group to achieve its full potential. Building a sound financial position is another goal. I ask shareholders for even more support as we take the steps needed to become more competitive and establish a powerful foundation for all of our business activities.

Numerous structural reforms between 2018 and 2020 significantly improved our profitability and financial soundness. In July 2021, we announced a new medium-term plan with the main goal of shifting our mail-order and online shopping business from a high-volume business model to a new co-creation business model. In addition, to continue playing a role in creating a sustainable society, we plan to become a leading company regarding the ability to leverage our distinctive strengths for better living and a better future. Everything we do is guided by our commitment to “thinking more about customers than others and working more than others on making customers happy.” We will embrace this spirit as we provide products and services for a diverse array of customers’ lifestyles, support their lives and add more color to their lives. By evolving to become a new Senshukai that is “appealing in 1,000 ways” (the meaning of the Chinese characters for “Senshu”), we are determined to become a sustainable company that can be successful for more than 100 years.

I ask for your continued support and encouragement.

Kenji Kajiwara
President and Representative Director
July 2022