MARUI CO., LTD.

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STORE STRATEGY <strong>CO</strong>NTINUING HIGHLY EFFICIENT STORE OPENINGS Marui, which has until now developed its store network mainly in metropolitan Tokyo, is steadily opening stores in new regions with a view to creating a nationwide network. As the first step in these efforts, we opened Kobe Marui in the Kansai region in October 2003. As well as incorporating the chic presentation style that is Marui’s STORE LOCATIONS Kobe Marui Kitasenju Marui Nanba Store Yurakucho Store Tokyo Metropolitan Area Kansai Region trademark, we designed a highly original store by collaborating with local businesses and designers. Brisk sales have already put the store on track to outperform our sales forecast of ¥7.0 billion for the first year of operations and to achieve our target of turning a profit in the store’s first year. In addition to Kobe Marui, we will further strengthen our operating base in the Kansai region by opening a store in Osaka’s Nanba district, which is the center of Kansai’s political and economic life. Scheduled for opening in 2006, the Nanba store will have a sales floor space of 17,000 square meters—2.5 times larger than Kobe Marui. Meanwhile, in February 2004 we will unveil our largest-ever store, with 35,300 square meters of sales floor space, in Kitasenju. Four commuter lines meet at Kitasenju, making it the largest railway terminal in north Tokyo. Given that more than 700,000 people use the station a day, we are looking forward to attracting large numbers of customers. Plans call for a total investment of ¥28.5 billion. By drawing on store development knowhow accumulated over many years, we aim to create a store with extensive product lineups and services that NEWLY OPENED STORE Kobe Marui Date of Opening Location Sales Floor Space October 2003 One of Kobe’s most popular downtown shopping areas 6,940m 2 NEW STORES SCHEDULED FOR OPENING Kitasenju Marui Nanba Store Yurakucho Store Date of Opening Location Sales Floor Space February 2004 Autumn 2006 Spring 2007 Adjacent to Kitasenju Station, the largest railway terminal in north Tokyo Center of Kansai’s political and economic life Adjacent to Ginza, Tokyo’s prestigious downtown shopping area 35,300m 2 17,000m 2 20,000m 2 6
cater to a wide range of customers. The store will feature not only fashionable apparel and accessories but also food products as well as restaurants and large-scale specialty stores. Moreover, the Group intends to open a store in Yurakucho with sales floor space of 20,000 square meters in 2007. The Yurakucho district is adjacent to Ginza— Tokyo’s prestigious downtown shopping area. It is also close to Marunouchi, which is Japan’s largest business district. Investment in this store is expected to amount to roughly ¥30.0 billion. Setting our sights on metropolitan Tokyo and the Kansai and Chukyo regions, we will step up highly efficient store network expansion efforts. As internal reserves will cover anticipated capital expenditures of approximately ¥60.0 billion over the coming three years, we do not plan any new financing. MANAGEMENT REFORM GOALS BUILDING A NEW ORGANIZATION FOR GROWTH Marui Group companies made a concerted effort to implement reforms aimed at creating a new management organization that will maintain stable growth in Japan’s retail industry. These reforms focused on: ●Heightening the professional specialization of each Group company in its respective business field →to increase the Group’s collective strength, to add value to the Marui brand, and to get on track for new growth. by increasing the level of expertise that employees bring to every aspect of our operations. Through reform of our management organization, we aim to add value to the Marui brand and to strengthen customer loyalty. We expect intensified competition in Japan’s retail industry. Mindful of this, Marui has to implement fundamental reforms that enable flexible responses to changing customer needs and market trends while the Group is still strong. At the same time, we must improve competitiveness, profitability, and capital efficiency to ensure steady growth. STRATEGY 1 CREATING INDEPENDENT BUSINESSES TO HEIGHTEN SPECIALIZATION As part of the reform of our management organization, we transferred roughly 5,100 parent company employees, excluding managers and executives, to Group subsidiaries on October 1, 2003. Under the new management organization, the Marui Group’s operations have been reorganized by function and entrusted to 12 Group subsidiaries. Our aim is for each subsidiary to enhance its specialization and competitiveness in its particular business area and thereby contribute value to the Marui brand. Moreover, we revamped our personnel organization by introducing a salary system based on position and performance. We have built a dynamic, results-driven regime that promotes employees who are able to draw on an Based on the fundamental retailing tenet of always putting the customer first, Marui has consistently won the endorsement of customers by offering the latest fashions. In recent years, however, growing homogeneity among rival stores has become a major problem in an increasingly overcrowded marketplace. It is therefore crucial for Marui to develop and market its own distinctive brands that cater precisely to market demand. Accordingly, to remain competitive in today’s environment, we must further strengthen our ability to provide customers with fashionable products and outstanding customer service 7
Page 1 and 2: MARUI CO., LTD. Eight-Month Fiscal
Page 3 and 4: ENHANCING THE MARUI BRAND Thanks to
Page 5 and 6: Further, we sought to heighten the
Page 7: ENHANCING THE MARUI BRAND ENHANCING
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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