MARUI CO., LTD.

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to continue in the retail industry due to the long-term slump in consumer confidence and increasingly fierce competition. Against this backdrop, the Company will accelerate its store scrap-and-build program while taking steps aimed at moving the Marui Group into a new era of growth. Aiming to expand our area of commercial operations, we will actively open stores in promising locations. In October 2003, we opened our first store in the Kansai region—Kobe Marui, a young and sophisticated fashion specialty store situated in front of Sannomiya Station. Also, we will open our largest-ever store, Kitasenju Marui, in February 2004. By including other major specialty stores, this new store will be able to cater to the diverse needs of a wide range of customers. Plans also call for the opening of new stores in front of Nanba Station in Osaka in 2006 and in front of Yurakucho Station in Tokyo in 2007. In addition, we will enhance the efficiency of our network of existing stores. Such efforts will involve continued investment in store remodeling aimed at heightening the competitiveness and freshness of our stores. At the same time, we will close stores for which it has become difficult to leverage Marui’s distinctive strengths due to size or to changes in the surrounding commercial environment. In line with that strategy, we closed three stores and two buildings in January 2004, including our stores in Tsuchiura, Hachioji, and Kawaguchi. And, our Numazu store is slated for closure in May 2004. Moreover, we intend to use internal reserves for capital expenditures, including all store openings. We therefore do not plan any new financing in relation to these measures. In financial services operations, we will continue efforts to steadily increase the membership of our house credit card, the Akai Card, and to expand the branch network of Zero First Co., Ltd. Thanks to ongoing prudent credit management, consolidated outstanding loans at the end of the fiscal period were ¥217.2 billion. As part of the Marui Group’s shift to an integrated management organization, on October 1, 2003, approximately 5,100 of the parent company’s employees were transferred to Group subsidiaries according to their abilities and areas of expertise. Also, we introduced a more performance based salary system while creating a personnel organization that actively promotes individuals—irrespective of age or experience—who are able to translate high levels of expertise into concrete results. The Marui Group will achieve solid growth by implementing the abovementioned measures to further develop its unique business model, which is founded on retail and financial services operations. In the current fiscal period, ending March 31, 2004, which is an irregular six-month accounting period due to a change in the Company’s fiscal year-end, we expect consolidated total operating revenues of ¥293.0 billion, ordinary income of ¥20.0 billion, and net income of ¥8.0 billion. Factoring in planned store closures and the restructuring of our personnel system, we anticipate ordinary income of ¥40.0 billion and ROE of more than 5% in the fiscal year ending March 31, 2005—the first 12-month accounting period after the change in fiscal year-end. In closing, I would like to take this opportunity to ask our stockholders and friends for their continued support. January 2004 Tadao Aoi, President 4
ENHANCING THE <strong>MARUI</strong> BRAND ENHANCING THE <strong>MARUI</strong> BRAND Marui Kit Center Marui Seasoning Marui Access Marui M’s Mode Moving Zero First CSC AIM Create M&C Systems Marui Fashion Freak Virgin Megastores Japan Marui Smart Support Marui will accelerate its growth through stepped-up efforts to open new stores efficiently and to broaden its customer base and area of operations. In October 2003, Marui made its first venture into the Kansai market when it opened the Kobe Marui store in Kobe, Hyogo Prefecture. We plan to open another store in the Kansai region in 2006—at Nanba, Osaka. In metropolitan Tokyo, meanwhile, plans call for store openings at prime locations in Kitasenju in February 2004 and in Yurakucho in 2007. Further, the Marui Group revamped its management organization on an unprecedented scale in October 2003 and began Group management in earnest. The main aim of such reforms is to have Group companies work together toward strengthening customer loyalty and adding value to the Marui brand. Through these reforms, we are not simply trying to cut costs; our goal is to improve competitiveness and to establish a dynamic organization capable of stable longterm growth. At the same time, Marui will improve profitability by withdrawing from unprofitable stores and lineups. By building a highly profitable store network and implementing farsighted reform of our management organization, we will create stores that even more customers love to visit. 5
Page 1 and 2: MARUI CO., LTD. Eight-Month Fiscal
Page 3 and 4: ENHANCING THE MARUI BRAND Thanks to
Page 5: Further, we sought to heighten the
Page 9 and 10: cater to a wide range of customers.
Page 11 and 12: etirement benefits to employees tra
Page 13 and 14: CONSOLIDATED OPERATIONS In the fisc
Page 15 and 16: NON-CONSOLIDATED FIVE-YEAR SUMMARY
Page 17 and 18: Thousands of U.S. dollars Millions
Page 19 and 20: CONSOLIDATED STATEMENTS OF STOCKHOL
Page 21 and 22: NOTES TO CONSOLIDATED FINANCIAL STA
Page 23 and 24: The new accounting standard require
Page 25 and 26: 9. LEASES (a) Pro forma information
Page 27 and 28: (b) The reconciliation between the
Page 29 and 30: INDEPENDENT AUDITORS’ REPORT To t
Page 31 and 32: 2 City Ueno 3 Family Mizonokuchi 4
Page 33 and 34: ADMINISTRATIVE SERVICES Marui Smart
Page 35 and 36: CORPORATE DATA (As of September 30,

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