■Growth Strategy

1. Progress of the medium-term management strategy “SANYEI 2025”

Sanei Corporation (8119) is promoting the medium-term management strategy “SANYEI 2025” (2024/3 to 2026/3). The quantitative targets for the final year are 50 billion yen in sales and 2 billion yen in ordinary income, and the progress period is an important period of “solidifying our foothold” towards that target. Regarding “business portfolio review (promotion of consolidation of low-profit businesses),” which is a priority measure of “protection,” cost reduction results have been achieved by implementing absorption and merger with the headquarters of Zerrick Corporation Co., Ltd. in 2024/4, dissolution and business succession of Essen Corporation Co., Ltd. in 2024/2, and reduction of directly managed brand stores (from 47 stores to 18 stores). Remaining issues include restoring profitability in the home appliance business and establishing Benexy's select shop business type. In terms of “aggressive” priority measures, “expansion of overseas sales” was sluggish due in part to the economic downturn in Europe and China, but with regard to “EC business expansion” and “promotion of sustainable business,” the enhancement of product lineups has progressed, and a marketing foundation for growth has been put in place, and progress is progressing smoothly.

2. Expansion of EC business

“EC business expansion” is one of the growth drivers of the medium-term management plan. EC business sales for the interim period ending 2025/3 are 2878 million yen. There was also a period when sales in the EC business stalled due to a break in nesting demand, but the progress period once again entered a growth trajectory. Until now, it has focused on furniture and interiors, but it has expanded into exteriors and other new genre products. As an example, the furniture/interior “MINT” is a Rakuten Ichiba store, and e-commerce sales of foliage plants began in 2024/11. We have collaborated with farms that specialize in foliage plants for over 40 years in Kumamoto Prefecture, and in addition to their quality control and cultivation techniques, we have realized a system to send high-quality, fresh plants directly from the farm. Currently, we handle small to medium breeds such as Pachira and Monstera, but in the future, we plan to expand the handling of varieties and increase the number of large living organisms. Also, since it operates infrastructure for EC on a fixed scale, we have begun outsourcing various fulfillment functions such as photography, product page creation, order processing, and settlement, and we already have multiple contract records. EC business sales for the full fiscal year ending 2025/3 are planned to increase 14.3% from the previous fiscal year to 6000 million yen.

3. Promoting sustainable business

The “Our Earth Project,” which is based on the concept of “more earth-friendly,” was launched in 2019/9, and activities such as import and sale of overseas brand products with the keywords “sustainable” and “ethical,” development of our own brands, and provision of materials and manufacturing have been carried out. We handle over 10 brands, and in addition to “uF,” which handles bags and pouches using recycled materials, “YOT WATCH,” a watch born from toy waste materials, and apparel wear “Pure Waste (Pure Waste),” which recycles scraps of clothing from the environmentally advanced country Finland, etc., the brand “e.Dye,” which uses anhydrous dyeing technology, suppresses the intrusion of solar heat etc. by using it on the roof and walls of buildings The number of products and materials that stand out, such as the heatwave countermeasure product “heat shielding sheet,” has also increased. In 2024/10, “uF” won the 2024 Good Design Best 100 sponsored by the Japan Institute of Design Promotion (Japan Foundation). Along with the high level of design and convenience, the fact that it utilizes the anhydrous dyed fabric “e.dye” that does not use water and the reduction and visualization of CO2 emissions (can be confirmed with a QR code) were highly evaluated.

(Written by FISCO Visiting Analyst Hideo Kakuta)