Our basic idea of management.

Our basic idea of management is that an enterprise should exist for the happiness of the people, and there is no other way to receive the support from a society. I think that the social mission of retail industry is to modernize the obsolete distribution system, which remains in some fields. I regard the hardware/tool and gardening/plant as the principal categories of Komeri. Farms of garden plants still rely on family labor and small-scale market transactions are the main force of demand and supply adjustments. On the other hand, the distribution of hardware/tool field still holds a complicated and inefficient part built by the traditional middleman system. Komeri wishes to contribute toward realizing more affluent society through innovating the distribution of such fields. I think that an enterprise shall not be allowed to exist in the society without such an idea in corporate activities.

Komeri keeps growing in sales and profit in spite of sluggish economy in Japan. What is the major factor of it?

Heading for the chain store system is a major trend in retail industry. As we have been building the chain store system in Komeri with an original strategy, our steady and constant effort seems to have obtained recent good results. Although our original H&G format, which has 1,000 ・ of selling space, is smaller than so-called home centers of others, it was designed as a specialty store for a standardized chain store operation from the beginning of development. Moreover, Komeri has independently designed and constructed the functions of merchandising, logistics, and information that support the store operation. It is the mechanism that is able to realize strong power of mass merchandising and low cost operation, when stores and other functions work together as a unified system.

How does H&G differ from small size home centers of your competitors?

The power of merchandising derived from large store count is essential for a success of a small size store. Hard & green has brought up hardware/tool and plant/gardening as the core merchandise although there are some difficulties to deal them in. By realizing the mass merchandising system in these fields, we have acquired the merchandise power with which H&G can compete with larger stores. Furthermore, thanks to small investment and thorough low cost operation, H&G can be opened in the small marketing area of about 10,000 people of population, where competitors are not able to intrude. Without attrition from a fruitless competition, H&G can monopolize the demand of the market in such an area. On the other hand, many of the small size stores that the other companies once tried were solely intended to avoid the store opening regulation based on selling space. Since those stores were nothing more than a scale-down of a large store, the assortment of an individual sector became insufficient for anybody, and even an operation cost increased. I think that was the reason that they could not obtain the support of consumers in the result.

Why were the hardware/tool and plant/gardening chosen as the core categories?

Komeri was established in Sanjo, Niigata, one of the biggest producing districts of hardware in Japan. Moreover, Niigata is a leading agricultural area of the entire nation, and the cultivation of gardening plants is prosperous as well. Even before starting DIY chains, Komeri has been in such an environment and had something to do with the field of the hardware/tool and plant/gardening. In order to strengthen the merchandising power, it is blessed very much for a retailer to be close to the producing district and be familiarized with the circumstances of the production and distribution. As Komeri was blessed with such an advantageous location, efficient merchandising became possible in the difficult categories such as hardware and plants. However, the more important point to be mentioned is that distribution systems of those fields were so obsolete that modernization was long awaited. I believe it is the social mission of Komeri to innovate the distribution in the field of the hardware/tool and plant/gardening through the chain store system resulting to contribute to more affluent society.

What do you think the most important for Komeri to grow continuously in the future?

If we were persist only in the existing market for us, our growth would reach the limit sooner or later. But plenty of markets remain undeveloped for us. It means not only the room for new store location but also new categories. In other words, there are some fields whose conventional distribution system, such as an agricultural coop or middleman system, has been shaken by the change in social structures. The agricultural materials and building materials are good examples. Komeri wants to enter actively into such markets to bear the construction of a new marketing mechanism there. For this achievement, an overwhelming store count that can realize the mass merchandising is necessary first of all. Therefore, Komeri sets the present goal in filling this country with 1,000 stores, and are pushing forward for that.

Our basic policy toward shareholders.

The Group places the highest priority on increasing returns to shareholders by constantly raising its corporate value. When distributing profits we aim to continuously provide stable dividends while strengthening the Group’s operating base and financial structure.

We strive to efficiently allocate funds in our internal reserves for investment in new stores as well as for expansions and renovations to further vitalize the existing stores, thereby achieving sales growth and a higher ROE. In this way, we aim to increase returns to shareholders from a comprehensive, long-term perspective.