Top Message Sustainability

We would like to extend our deepest condolences to the families of those who lost their lives in the Noto Peninsula Earthquake of 2024, which occurred in January. Additionally, the region centered on the Noto Peninsula, which is still on the path to recovery and reconstruction from the earthquake, has suffered significant damage due to the heavy rains in September 2024. We feel great sympathy for everyone affected by the disaster and send our best wishes for their safety. In addition to feeling great respect for those who are working hard in the relief efforts, we hope for the earliest possible restoration and recovery of the disaster-stricken areas.

With an awareness of being part of the cycle of nature

In June 2024, I visited the Yosemite National Park located near San Francisco for the first time in 10 years. THE NORTH FACE logo design was inspired by this place where various ecosystems are nurtured by nature, and it is also a very memorable place for me. I could feel my body and mind awaken before the grandeur of nature and many ideas came pouring in about the meaning of my work and the mission of Goldwin.

Currently, the rising geopolitical risks in Ukraine, the Middle East and East Asia have highlighted conflicts among humans. The pattern of plunder repeated in history such as colonialism and Global South issues is also evident between nature and humans. All ecosystems on earth depend on exquisite cycles. Humans are inherently part of nature but we have separated the nature from humans and continued to plunder. Now it is time to change this thinking and review our behavior as an integral part of the cycle. This is a significant theme that requires cooperation of mankind as a whole but there is something we can do as a sports apparel manufacturer.

Regeneration

In the 1980s, I took a lesson of “making a difference” from the founder of THE NORTH FACE and also learnt the importance of never stop exploring values different from others. In 2020, we celebrated the 70th anniversary of establishment and discussed with young employees about the future of Goldwin toward the 100th anniversary of establishment. We came up with the idea of achieving unrivalled differentiation in business with the regeneration of global environment. This is our long-term vision of PLAY EARTH 2030. The phrase of PLAY EARTH expresses our desire to return to “play” in nature, as a foundation of all sports, and to achieve global cooperation in solving social and environmental issues.

The first step of our long-term vision started with the previous Medium-term Management Plan (FY 2022/3 to FY 2026/3). THE NORTH FACE which has driven the growth of the Company remains as our core brand, while the areas other than Japan and Korea are subject to the limitations on trademark right. Venturing into the global market is essential for us to continue growth, and we placed the global deployment of our original “Goldwin” brands as our top priority under the Plan. Among others, Goldwin 0 has demonstrated possible differentiators in the overseas market to regenerate the global environment under the three concepts of Circulation, Borderless and Co-Creation.

Collaboration with Spiber Inc. is a major initiative to achieve this and in March 2021 we started mass production of “Brewed Protein™,” the circular material we jointly developed with Spiber Inc. in the last six years. In the fall of 2023, we released products using fibers of Brewed Protein™ by four brands simultaneously on a global basis.

Unwanted clothes in developed countries are exported to Africa, South America and other areas, and unsold clothes are discarded which has a massive environmental impact. This situation has been reported in the media and the young Generation Z are working to change the mass production and a throwaway culture. The Goldwin 0 could gain a strong support by understanding such new value and resonating with people.

Goldwin500

In the fiscal year ended March 2024 we renewed the record-high net sales and operating profit for two consecutive fiscal years. We believe our investments led to the endorsement of our brands, and evolving the business model has paid off. However, the current recovery in the clothing market is largely affected by the increase in the average spending per customer such as by overseas tourists to Japan and the recovery in spending by general consumers is slow. Given this business environment, we announced the new Medium-term Management Plan (FY 2025/03 to FY 2029/3) in July 2024 to maintain sustainable growth. This global strategy is named Goldwin500 Project and we will accelerate the global expansion of the Goldwin brands and aim for a business scale of 50 billion yen in sales in 10 years.

China has adopted a proactive national strategy to address climate change and consumers are increasingly becoming aware of the environment. The product launch event of Brewed Protein™ was visited by many people across industries and I could feel their strong interest in environmental issues. The China market has a high potential for premium brands, a high penetration of new technologies and many affluent customers. Under the Goldwin500, the ratio of Goldwin brands to overseas net sales expanded to 80%, of which 60% will be achieved in the China market. We will accelerate the store openings in the three countries of China, Korea, and Japan, aiming to establish a brand position early. In contrast, in Europe and North America we will take a careful step focused firstly on building brand recognition and philosophy.

We decided to exit from the business of DANSKIN, ellesse, 241, and BLACK & WHITE to concentrate our management resources to the Goldwin brands. Meanwhile, we signed an exclusive distributor agreement with Allbirds, Inc. to distribute Allbirds® products in Japan. We believe this brand shares the same ecological value with us and significant synergy can be expected by utilizing our business infrastructure.

We will also strengthen recruitment and training of human resources to promote overseas business. An internal training program was introduced to support motivated employees to actively work overseas, while proactively hiring local staff to localize operations.

We integrated CI (Corporate Identity) and BI (Brand Identity) and also revised our Purpose to globally expand the recognition and presence of Goldwin. This is a strong commitment to carry on the founding spirit.

True value

I really cherish the phrase “Everyone pays attention to what is right before their eyes. What sets a manufacturer apart is giving painstaking attention to what is not readily visible.” left by our founder, Tosaku Nishida. With a view to expanding overseas, we refer to this as “dedication to detail.” The true meaning of this phrase is the “pursuit of true value.” This includes the aspect of manufacturing that is invisible from the surface such as our commitment to materials and careful sewing and processing techniques to ensure long-lasting use, and the invisible value of supporting customers through their new challenges and environmentally conscious lifestyles.

The in-store digestion-based product supply business model is our strength that has supported the Company’s high profitability by effective inventory management, and the original purpose is the manufacturing and store management from a customer perspective. The brands such as THE NORTH FACE have gained support through careful communication at 163 directly-managed stores and other self-managed sales floors. Products equipped with true values are beneficial both for the customers and environment because they require no excessive number of items and can be used for long without being swayed by trends. The Company can control inventory and discounts, and the pursuit of true value enables us to achieve both business sustainability and environment sustainability.

As a premium sports brand to provide true value, we will build a brand identity with a theme of keeping harmony with nature, expressing traditional Japanese aesthetic manners of delicacy, care, precisions, and simplicity, and aligned with those who take on challenges. Responses from the Goldwin Beijing opened in 2021 and the inbound tourism customers demonstrate the true value is supported across borders.

Creativity

The net sales of THE NORTH FACE have grown approximately fivefold in the last 10 years, yet still there is much room for growth in the categories of lifestyle, women, and kids. Sports footwear market, in particular, has a market worth 400 billion yen for Japan alone, while our net sales remain at about 6 billion yen. We will pursue differentiation also in this category with a true value proposition. Shoes must be functional such as easy to walk and relieving fatigue, in addition to designs. We are confident to enhance the brand presence by proposing products so unique to THE NORTH FACE and equipped with these features.

To generate true values, creativity comes into play to question common sense and see things from an innovative perspective. Our employees are diligent and have strong operational skills, and there remains room to strengthen creativity. It is said creativity depends on individual sense of style but this sense can be honed and developed. For products, a sense for combining functions and designs at a high level is required and for store expression, a sense for editing and staging is required to correctly convey the brand philosophy. The more people are equipped with these two senses, the more true values Goldwin continues to enhance.

Creativity is also our focus in recruiting human resources. We seek people who can utilize their unique ideas to our business regardless of their educational background, nationality, or gender. Our ideal corporate culture, we believe, is respecting unique ideas and generating values that cannot be found elsewhere through creativity, and this will evolve the essence of diversity.

Regenerate global environment as a corporate responsibility

I spend most of my weekends out in the nature and have experienced changes caused by climate change. I feel nature is sending warnings such as a low activity of fish due to higher water temperature and attacks of bears on people in the residential area. Sustainability from a human perspective no longer prevents the destruction of the global environment. We would like to inspire sustainability by clearly targeting the positive impact aimed at regenerating the global environment, in addition to reducing the environmental burden.

The GOLDWIN PLAY EARTH PARK Business Concept project is such a symbolic initiative. We will fulfill our responsibility to the local communities and nature by serving as a common ground to experience the beauty of nature and further resonate with people. Japan is a beautiful country with rich nature and four seasons but very few are aware of its charm. I believe increasing the demand for enjoying nature will generate a new economic impact.

To regenerate the global environment, we need to build partnerships not only with business partners but also with our customers, shareholders and investors who share our values and co-create together. We will steadily implement our growth strategy including the Goldwin500 and build on trust we have earned, along with expanding the circles of partners who resonate with the Company which seriously embraces challenges on regenerating the global environment.