OTSUKA KAGU,LTD. (E03078) Stock Price

**Otsuka Furniture Business Overview**

Otsuka Furniture is a company whose primary business is the retail of furniture, home appliances, and interior products. The company sells domestic and international furniture and home appliance products through showrooms nationwide, and is characterized by high-quality merchandise and consulting-based face-to-face sales services. Currently, it operates as a subsidiary of Yamada Holdings.

The company serves both individual consumers and corporate clients. For individual customers, it sells furniture, home appliances, and interior products through showrooms across the country. For corporate clients, its contract division provides specialized services to hotels, luxury care-equipped condominiums, and housing-related companies, thereby diversifying revenue sources.

In terms of business structure, the Otsuka Furniture group, in addition to Otsuka Furniture itself, holds Akita Mokko as a non-consolidated subsidiary. Akita Mokko possesses traditional bent-wood furniture manufacturing technology and develops products by leveraging customer needs identified through the company's face-to-face sales, focusing on the creation of distinctive, high-value products.

Otsuka Furniture is implementing a comprehensive management strategy aimed at achieving long-term performance recovery. Under its founding mission of providing "quality living," the company has set targets for early profitability through maximizing sales revenue and gross profit while minimizing selling, general, and administrative expenses. Specifically, the company focuses on developing high-value-added products with comprehensive consulting services, offering excellent products from around the world—centered on luxury and mid-range items—at reasonable prices by eliminating intermediary markups.

The company's priority investment areas are strengthening collaboration with Yamada Holdings and advancing omnichannel operations. It aims to improve "complete living" proposals through furniture sales at Yamada Denki stores and home appliance offerings at Otsuka Furniture locations, while deploying a sales maximization strategy that integrates three sales channels: physical stores, e-commerce, and direct sales. By leveraging high-quality consulting services such as remote interior design consultations, the company enhances customer convenience through seamless service delivery across physical stores and the internet.

In new market development, the company is actively strengthening B2B operations alongside its consumer business. It is capturing corporate demand from senior housing facilities—whose demand is growing due to aging demographics—as well as hotels and corporate offices. The company is also intensifying sales activities to design firms by leveraging the brand power of luxury brands for which it holds exclusive distribution rights. Additionally, it is expanding its business scope through sales partnerships with housing developers, including Yamada Holdings group companies.

Regarding technological innovation, the company continuously upgrades its website and e-commerce platform to adapt to internet proliferation and evolution, achieving both improved usability and increased foot traffic to physical stores. The company also pursues profit and cash flow improvements through operational efficiency gains—including reduced rental costs from store restructuring and reduced logistics expenses from optimized inventory levels—by leveraging group synergies with Yamada Holdings, thereby establishing a stable financial foundation.