■Shop Sales Business
With regards to shop sales business, we have focused on thorough training of employees, development and sales promotion of original brand products, promoting cooperation with group companies, strengthening sales of kitchen equipment, and tackling direct sales operations.
Regarding our thorough employee training, we carry out "Wolf Training" to turn our area managers and shop managers into strong leaders, "Salesman Training" that teaches our salespeople information about kitchen equipment and group tactics for recommending products, "Part-Time Training" designed to extend the potential of our part-time staff, as well as a "Part-Time Master Contest" where staff can compete with what they have learned in the training, and a "Sales Master Contest" where trained staff compete each other.
By improving the quality of our employee training, we provide a level of service that will please our customers, and all of our existing stores have shown better business result. Regarding development and sales promotion of original products, we have developed over 500 items of private brand products (herein referred to as "PB products") that serve to elevate our profit ratio as part of our recommendation sales strategy, and promote them by means of shop front exhibitions and checking on sales conditions. Also, we create an annual recommendation sales schedule for our stores, to be used in recommending seasonal products.
Concerning cooperation with group companies, we have taken a thorough approach to service products aimed at the 160,000 nationwide customers of our group companies. We focus not only on kitchen equipment and cooking tools, but on issues that cause issues for restaurant managers such as "sales promotion" and "training staff", sales promotion tools such as the "Fax DM", our training programs designed to educate restaurant managers, as well as product proposals. Regarding our "Training programs", they were held 12 times last year in all parts of the country, with a total of over 300 people in participation. Also, by introducing information about real estate agents and helping new customers with fund-raising, we plan to ensure that they do not get trapped in a price competition with other companies.
In relation to strengthening sales of kitchen equipment, we have focused our attention on marketable products, with our sales center playing an important role. By acquiring them only from restaurant operators, but also real estate agents, interior designers, leasing companies, and participation in auctions, we have increased our inventory of marketable recycle kitchen equipment to meet our customers' needs.
In relation to direct sales operations, we have created a direct sales training center at our Shinjuku branch, and gathering 10 to 15 people from around the country, we have held 2 training sessions that each lasted 2 months. The 21 people who completed that training are now situated in major cities around the country, carrying out sudden sales operations in their respective areas. In relation to the Kagoshima and Osaka Yodogawa stores that opened in November last year, although they were in the black on a monthly basis, their annual balance was in the red, causing a decrease in operating profit. However, we are developing a structure to ensure all stores stay in the black, so we think that they will be able to contribute profits during the current term. Also, inventory funding for product development and the increase of revised products designed for product replacement, as well as the cost recovery from the establishment of a distribution center did not go as planned, an the overall profit from store business has decreased as a result. However, whilst developing efficient PB products that take into account a reasonable inventory, we are increasing the PB sales share, so we believe that we can make a profit contribution this term.
As a result, shop sales business reached a total of ¥8,984,000,000 (a 1.3% decrease compared to last year), and our operating profit was ¥807,000,000 (a 13.2% decrease).
Forecast for the period from May 2014 through April 2015
Concerning FBP business, we mediate between real estate agents and customers in the main body of the food and drink industry, take orders for interior design and construction, attract group customers through exhibitions, strengthen sales through strategies involving smartphones and the Internet, promote sales through our original POS system "tenposcube" (herein referred to as "TC"), and by operating TC and our number management ASP "Food Link" together, we have focused on ASP sales promotion.
When mediating between customers and real estate agents, we focus on the main body of the food and drink industry, and our company's FBP staff make proposals regarding the top businesses in the industry according to our company president. Because the companies involved in these proposals are familiar with our company, we receive fast approvals, and maintaining a high degree of flexibility, we have increased the number of contracts completed. At this company, we do not simply sell things, but instead our salespeople perform everything from product consultations to business funding preparations, explain everything leading up to the opening of a business and provide follow-up support once the business is open.
Concerning exhibitions to attract group customers, by actively participating in exhibitions all over Japan, we have managed to attract many new customers. For example, at hotel and restaurant shows and Japanese barbecue industry exhibitions, by showing that our company boasts a wide range of valuable services and can answer to a variety of demands, we have turned many casual visitors into potential customers. We also collect information from each group company, and connect this to our courteous follow-up services.
Because of our smartphone sales strategies using the Internet, a comparison of sales in November and March reveals a 162% increase, and the number of products published has also made a huge increase from 90,000 in the first term to 140,000. Also, after converting to a portal site, FC referrals, ticket sales, and access to the transaction site have all improved, and the number of visits has increased 300% compared to this time last year. In March we opened a Tenpos Yahoo store, which lead to a significant increase in sales of PB products.
Concerning sales promotion through TC, by means of excellent design at a low cost, and proposals to customers who come to our stores to purchase kitchen equipment, the number of sales has made a significant increase. Also, concerning ASP sales promotion, by selling as a set with OPS, we have been able to increase the number of sales. Furthermore, in addition to our direct sales business, we have also begun to work with a number of agencies, and our network is steadily broadening. These things have contributed greatly to an increase in the total sales of our FBP business.
As a result, FBP business reached a total of ¥5,058,000,000 (a 49.7% increase compared to last year), and our operating profit was ¥190,000,000 (a 55.2% increase).
Forecast for the period of May 2014 through April 2015 Concerning FBP business, our marketing department offers a "Restaurant Customer Attraction Strengthening Service", and our Internet department offers "Smartphone Site Strengthening" and "OEM for POS Systems Using iPad and Other General Devices" as well as other services. Our "Restaurant Customer Attraction Strengthening Service" is a special service that we offer to corporate clients that involves sharing a "Fully Booked Fax" with all our group companies. Also, by attracting mass media coverage and broadening our PR business, we help to increase our clients' profits, and attract even more customers. As smartphones continue to gain popularity and become the standard for mobile communication, our "Smartphone Site Strengthening" will aim to increase site access and sales by providing elegant, easy-to-use sites. "OEM for POS Systems Using iPad and Other General Devices" involves carrying out sales of high-profit products and new product development, by using the extremely well-selling iPad POS system brand "tenposcube". Also, we are anticipating the synergy and sales increase of our new group company, Kitchen Techno Co., Ltd.
■Food and Drink Business
Regarding the food and drink business, we investigate stores to discover problematic issues, continuously enforce training to solve those problems, and by doing so work to raise the level of our service. Regarding the quality, quantity, and price of our products, and considering those as the chef's quota, we endeavor to raise the value of existing products and develop new menu items every month. As a result, we have been able to receive a high valuation of our services when compared to rival companies. In order to raise the number of customers visiting our stores, we send out a member's magazine by email to encourage repeat business, and we use a method known as fax DM to attract new customers. Also, assuming that customers are conscious about costs, we have tried an experiment where we intentionally raise some of our ingredient costs in order to offer the customer an even better menu.
Regarding store development tactics, with our main brand, Asakuma (31 directly owned stores, 8 FC stores) as a base, we also deal pro-actively with business conditions development, and have opened 3 FC "enjoy Kitchen" stores, and 2 FC "ASAKUMAKITCHEN" stores. We have opened a company store in Sagamihara city, Kanagawa prefecture, and as well as increasing the number of stores, by carefully selecting our contractors, we have been able to make a significant contribution to our operating profit. Also, the restaurants run by our subsidiary company Asakuma Succession, including Farmer's Garden (2 directly owned stores), Na No Ha (5 directly owned stores), and Motsuyaki Ebisu San (6 directly owned stores), have all shown a favorable transition in sales.
As a result, food and drink business reached a total of ¥4,517,000,000 (a 21.4% increase compared to last year), and our operating profit was ¥378,000,000 (a 51.8% increase).
Forecast for the period of May 2014 through April 2015 Concerning the food and drink business, between the steak restaurant "Asakuma", buffet restaurant "Farmer's Garden", and the roast giblets store "Ebisu San", we are planning to open 15 new stores. We will also strengthen our services based on our store investigations, and continue to pursue greater efficiency in our stores.
In terms of our total sales, because of our increases in the various industries listed above, we expect an increase of 23.9% from ¥18,560,000,000 in the period from May 2013 to April 2014, to ¥23,000,000,000 in the period from May 2014 to April 2015.
Regarding our operating profit as well as our current profits, after developing our sales staff into salespeople, expanding our line of PB products, training part-timers to increase their potential, strengthening our sales and optimizing our sales center, and reducing costs by checking on group company management, we expect a 13.7% increase in our operating profit from ¥1,346,000,000 in the period from May 2013 to April 2014 to ¥1,530,000,000 in the period from May 2014 to April 2015, and a 5.1% increase in our current profits from ¥1,221,000,000 in the period from May 2013 to April 2014 to ¥1,630,000,000 in the period from May 2014 to April 2015.
Regarding our current net income, since we anticipate improvements in our operating profit and current profits as listed above, we expect an increase of 6% from ¥849,000,000 in the period from May 2013 to April 2014 to ¥900,000,000 in the period from May 2014 to April 2015. Furthermore, the forecast mentioned above is based on the information currently available to our company, and calculated based on reasonable conditions. It is possible that the actual results will differ depending on a variety of factors.