From Enigmo to the Enigmo Group
Our 20th fiscal year (FYE January 2024) was a year in which we continued to strengthen our defenses against the harsh external environment. Over the course of the year, we worked to overcome lackluster demand and ensure that we were able to generate stable profits even in such an environment. At the same time, we also began preparing to go on the offensive by creating strategies and structures that will enable us to generate sustainable growth in the future.
With the inflation of fashion items and further depreciation of the yen, the prices of products handled on BUYMA have become more expensive, limiting the number of users who can purchase them.
What is more, the record warm winter caused sluggish demand for outerwear and other heavy clothing during the winter selling season, and now that the COVID-19 pandemic has abated, people are beginning to return to physical stores. As such, it has been a very difficult environment for fashion e-commerce in general.
In order to provide peace of mind to those customers who, despite this challenging environment, are still fueling a demand for products, we have implemented measures to improve the reliability of personal shoppers and the accuracy of the authenticity guarantee, and have implemented the Anshin Navi system, which uses this data to encourage customers to make purchases.
In addition, we have further enhanced our capability to filter out non-genuine items by increasing our appraisal capabilities many times over. For our loyal customers who continue to use our services even amid this low-demand environment, we have expanded our concierge service to make it even more convenient for them to use BUYMA, find the products they want from around the world, and make purchases with confidence. We now also offer this service to Platinum members of American Express, a move which has been well received.
What is more, by utilizing past data and knowledge, we support the activities of personal shoppers by providing them with competitive prices, top selling products, and methods for listing items for sale, and have taken numerous measures to enable a lineup of products that sell at as low a price as possible. While we are braving fierce headwinds with these defensive measures, we remain unable to surpass the previous year’s performance in terms of both volume and sales. Therefore, we will maintain a structure that will enable us to generate 1 billion yen in operating income by thoroughly controlling costs and improving efficiency in an effort to endure until the day we emerge from this long tunnel of adversity.
At the same time, we are not neglecting our offensive preparations aimed at creating a business structure that will allow us to grow continuously without depending on environmental conditions. In order to continuously generate new profit streams, we have systematized the processes by which we create business plans, source M&A candidates, and identify, consolidate, and withdraw from markets, and are in the process of developing our own process management system. Of course, we have yet to see clear results, and we will need to continue to improve the system as we move forward; however, the initial process is moving along according to plan, and we expect to see satisfactory results beginning this fiscal year. We feel that these activities have the potential to grow into a unique system that will continuously generate new profit streams with business impact, while gradually increasing in scale and precision.
In addition, with regard to ESG and the SDGs, our enhanced disclosure of non-financial information has led to improved evaluations by various ESG evaluation organizations, including a “B” score, the third highest out of eight levels, in the CDP’s Climate Change Report 2023. We will continue to contribute to ESG and the SDGs by expanding our business and achieving our materiality targets in a bid to become a company that attracts attention not only from a financial perspective but also from a non-financial perspective.
As a result of the above, the number of members reached 11,296,087 (up 6.7% YoY), the overall trading volume was 57,825,210,000 yen (down 8.6% YoY), net sales for the period under review were 6,203,762,000 yen (down 9.7% YoY), operating profit was 999,507,000 yen (down 12.1% YoY), ordinary income was 1,019,753,000 yen (down 12.1% YoY), and current net earnings were 838,365,000 yen (up 17.7% YoY).
Taking into consideration the trend of our business performance and the future business environment, we will pay an ordinary dividend of 10 yen per share as a token of our appreciation to our shareholders. In this fiscal year, we feel that the day when we will be able to adapt to the severe environment and exit the long tunnel is just over the horizon. In the BUYMA JAPAN business, we are aiming to achieve a growth rate of over 100% this fiscal year. Moreover, given that we were on the defensive in the previous fiscal year, we believe that we will be able to return to strong growth once the environment improves. Also, we will leverage our capabilities in new profit streams, including GLOBAL BUYMA, BUYMA TRAVEL, and M&A, to build up the scale necessary to achieve sales of 1 billion yen by the end of the current fiscal year. Additionally, we will build a business structure of BUYMA + new profit streams + new profit stream cultivation so that we can continue to grow into the next fiscal year and beyond.
The 21st fiscal year (FYE January 2025) marks the 20th anniversary of the founding of Enigmo. With this in mind, we see this as the time to evolve from a stand-alone growth company to an Enigmo Group that operates multiple businesses. We will seek to create new businesses from within the company, as well as attract new colleagues from outside the company through mergers and acquisitions, and will continue to pursue our belief (Purpose) of “Creating Change.” We will aggressively invest from a long-term perspective to evolve into a world-class company, beginning with the early achievement of 10 billion yen in sales and becoming a company that achieves 20% compounded growth. We hope that you, our shareholders, will continue to keep a warm eye on Enigmo over the long term, and look forward to your ongoing understanding and support.
April 2024
Shokei Suda, CEO
