Improvement of Gross Profi t Ratio
In fiscal 2016, we have improved profit margins and reduced selling, general and administrative expenses through the structural reform and continued aggressive efforts in new business fi elds, with the sale of home appliances as the core of our business.Using big data, the focus has been shifted from products to expert service and solutions,which increased the number of visiting customers, the percentage of repeat visitors,and the efficiency in sales promotion activities, leading to an improved gross profit ratio. The effect of the structural reform since the closures of many unprofitable stores in the fi rst quarter of 2015 has fi nally started to appear in this manner.
The Basis of the Structural Reform Exists on Site
I take charge of the structural reform and implementation of the Medium-term Business Plan. Our structural reform is starting to yield results, although we have only reached the half-way point. In promoting the structural reform, we need to constantly ascertain problems and current status and make improvements as necessary. For that purpose, the hands-on approach is very important. Believing that the basis of the structural reform exists on site, I frequently go out into the field and consider how to promote the structural reform and how to have staff members take the necessary actions for particular situations.
The Medium-term Business Plan, from the point of long-term vision, is for the achievement of an IoT company with the largest service network in Japan in order to realize sustainable growth of the Group and respond to expectations of stakeholders. We will endeavor to fulfill the plan through proactively carrying out the following eight concrete measures as the structural reform: (i) environmental business, (ii) Yamada Net Mall services, (iii) smart house services, (iv) renovation services, (v) daily life support services, (vi) original product development services, (vii) reform for improving store effi ciency, and (viii) personnel system reform. We will carry out these reform measures simultaneously with the aim of achieving the Medium-term Business Plan leading up to fi scal 2019.
Agreement on Exclusive Sales of FUNAI-brand Products in Japan
The structural reform for the development of products and stores is yielding results, which include the conclusion of the basic agreement on exclusive sales of FUNAI-brand LCD televisions and Blu-ray recorders in Japan. FUNAI ELECTRIC CO., LTD. has acquired a top level market share in North America and has high technological capabilities and production capacity. Its products are highly reliable and we want to further enhance the prestige of the brand in a cooperative manner. Yamada Denki is authorized to exclusively sell FUNAI-brand products for the coming ten years. We will launch the full lineup of the products and sell them using our nationwide network to achieve the goal of acquiring a 5% share in the domestic TV market. If successful, this will be a new business model and verify the Yamada Denki Group's competence.
Regarding the strengthening of the structural reform, we will make intensive efforts for achieving the major goals: "advanced store development integrating real and virtual spaces, and stabilization of profi ts," "development, renewal and abolition of products, and improved ratio of gross margin to inventory," and "increased profits from respective solution businesses."
Steady Implementation of the Medium-term Business Plan and Other Business Plans
The top priority is to conduct business based on the strengths of the whole group, including bountiful human resources, for the purpose of fulfilling our social responsibility as expected by our stakeholders, and steadily achieve results in our business activities, while shifting the focus from products to expert service and solutions. As one of the representative directors, I will responsibly promote steady implementation of the Medium-term Business Plan and other business plans.