NITORI Holdings Co., Ltd[Sapporo Head Office: ]1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo, Hokkaido 001-0907[Tokyo Head Quar ter]3-6-20, Kamiya, Kita-ku, Tokyo 115-0043[Osaka Head Quar ter]1-1, Kamisu-cho, Toyonaka, Osaka 561-0823[Homepage]
ht tp://www.ni tor ihd.co.jp/en/
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NITORI HOLDINGSCORPORATEREPORT2015-2016
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D r e a m
V i s i o n
Bringing comfortable, luxurious home living
to people all over the world.
2017 500 stores ¥550 billion in salesTransformation of Japanese lifestyles
Full-scale launch of global retail chain development.
2022 1,000 stores ¥1 trillion in salesExpansion in key sectors throughout the world
to transform people’s lifestyles.
2032 3,000 stores ¥3 trillion in salesWorking steadily towards the goal of offering
a high-quality lifestyle to people all over the world.
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Spreading the comfort and
enjoyment of high-quality
home living to as
many people as possible:
We take great pride and pleasure
in setting and achieving this goal.
“Enriching the lives of people in every geographic region through our products”
This is our goal, as well as the embodiment of our responsibility to society.
In 1972, when NITORI was a small furniture store on the brink of bankruptcy, my visit to the United States was eye-opening and
life-changing.
In the U.S., I found: product ranges coordinated by color and style, prices that were easily within reach of ordinary consumers,
stores situated in convenient locations so that people could visit them easily, and most importantly, the fact that those chain
retailers were making everyday life a more comfortable and enjoyable experience for everybody.
I thought to myself: “Someday, I want our stores to provide these same things, and to be able to bring comfortable, high-quality
home living to people all over the world.” NITORI remains committed to this vision today, and we continue to follow this path.
Another important aspect of our corporate mission is human resource development.
In order to enrich everyday life for everyone, we have to ensure complete satisfaction for our customers: from product
development through to when the products arrive at customers’ homes, and most definitely after they start to use the products.
”NITORI people” listen carefully to the feedback we get from customers, and use this information to plan for improvements and
upgrading.
We pour our efforts into developing world-class specialists in every facet of business by providing individuals with not only a
solid knowledge of chain retail store principles, but also with opportunities to obtain field experience and expertise from our wide
range of business ventures.
We build systems that enable us to internally control all steps from manufacturing, import-export, logistics and retail sales through
to customer service while simultaneously developing the people that can continuously enhance these systems.
In order to keep “Offering the Unexpected” not only for our customers but also for our stakeholders, we will continue to improve
and upgrade ourselves in the future.
Akio NitoriPresident and CEO
NITORI Holdings Co., Ltd.
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Trading, Planning & Development, and Logistics Functions
Sales Activities
NITORI Holdings Co., Ltd.
[Holding Company]
“Bringing comfortable, luxurious home living to people all over the world”Based on this aspiration, the NITORI Group has outlined a long-term vision and is devoting all of its energy to achieving this Dream.
[Logistics Company]HOME LOGISTICS Co., Ltd.
Advertising and Publicity Functions
Facility Management Functions
[Overseas Sales Companies]NITORI TAIWAN Co., Ltd.NITORI USA, Inc.
Manufacturing Functions
[Overseas Manufacturing Companies]PT. NITORI FURNITURE INDONESIANITORI FURNITURE VIETNAM EPE
[Furniture Manufacturing Factory]NITORI FURNITURE Co., Ltd.
HOME∙DECO CO.,LTD.
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Table of Contents
Our Dream and Vision ………………………… 1
President’s Message …………………………… 2
About the NITORI Group ……………………… 3
How to Achieve “Offering the Unexpected” ………… 5
Our Manufacturing …………………………… 8
Partnership with Our Clients …………………… 10
Our Logistics …………………………………… 11
Our Stores ……………………………………… 13
Other Businesses ………………………………… 15
Our Quality ……………………………………… 17
Environmental Policy …………………………… 19
Interaction with Society ………………………… 21
Looking towards the Future …………………… 21
Financial Highlights …………………………… 22
Company Profi le ………………………………… 22
The NITORI Group comprises several companies, including: NITORI Co., Ltd., which deals in retail home furnishings and home décor; NITORI FURNITURE Co., Ltd., with manufacturing subsidiaries in Indonesia and Vietnam; our logistics arm HOME LOGISTICS Co., Ltd.; NITORI PUBLIC Co., Ltd. for advertising and publicity, and insurance provider NITORI FACILITY Co., Ltd.By clarifying the functional roles and responsibilities within the group, we are able to ensure a more nimble and fl exible management style and enhance our corporate value in this rapidly changing business environment.
[Import Agent Companies]NITORI (China) Co., Ltd.
Shanghai Liqiao Industrial Co., Ltd.
Huizhou Shiniao Logistics Co., Ltd.
NITORI TRADING VIETNAM COMPANY LIMITED(from Dec. 2015)
NITORI (Malaysia) Sdn. Bhd.
NITORI TRADING THAILAND COMPANY LIMITED(from Dec. 2015)
NITORI India Private Ltd.
[Product Planning & Development]Deco Home China Co., Ltd.
Advertising and Publicity Functions
Facility Management Functions
[Advertising Agency]NITORI PUBLIC Co., Ltd.
[Facility Management]
[Insurance Agent Business]NITORI FACILITY Co., Ltd.
[Store Management Companies]NITORI Co., Ltd.∙ HOME FURNISHING STORE∙ HOME FASHION STORE∙ NITORI MALL∙ DECOHOME∙ Online Shopping Business∙ Renovation Business∙ Corporate Sales Business etc.
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By establishing an all-inclusive
“Manufacturing, Logistics and Retail Sales” business model, we are able to offer life-enhancing products to our customers.
Providing products of consistently high quality at prices that are easily within reach for everybody:We gain satisfaction from meeting our customers’ expectations.
How to Achieve “Offering the Unexpected”.
NITORI’s Manufacturing Process
Coordination Proposal
Products coordinated by color, pattern, and style are developed from scratch. Effortless coordination to enable the creation of an ideal room setting.
Our manufacturing is always based on the customer’s perspective
To create a better everyday life for our customers, we develop products by undertaking research from the customer’s perspective.
1 Market Research / Product Planning 2 Product Development
We do everything in-house, from product planning, manufacturing and logistics through to retail sales:
All of our products provide “Unexpected Value”.
Enjoy shopping without having to worry too much about the price
NITORI’s low-priced products with new functionality make everyday life more fun.
7 Sales
Even our logistics is self-run
We have built our own distribution network, from product importation to delivery to customers.
6 Import and Logistics
1Market Research
Product Planning
2Product
Development
6Import and Logistics
Call CenterUtilizing customers’ feedback,
we develop new products from scratch to offer even
better products.
7Sales
Enjoy shopping without having to worry too much about the price
NITORI’s low-priced products with new functionality make everyday life more fun.
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In order to offer the “Unexpected” in our products, we place emphasis on the following 3 key elements:
1. Affordability ……………… prices that make products easily obtainable.
2. Quality and Functionality … use-appropriate quality and functionality.
3. Coordination ……………… 1) a full range of products to support each usage scenario.
2) the above are linked by style and color.
Components of “Offering the Unexpected”
Raw material procurement from all over the world
We do not leave raw material procurement to others. We collect information about potential sourcing areas and then visit the areas before we begin procurement.
All parts are managed individually in-house, from the parts manufacturing stage onwards
We direct and manage manufacturing all the way through production. NITORI’s system creates products with consistent quality.
3 Raw Material Procurement
We do everything in-house, from product planning, manufacturing and logistics through to retail sales:
All of our products provide “Unexpected Value”.
4 Manufacturing
Quality responsibility for all items
For our customers to be able to use our products with peace of mind, we evaluate safety and quality from every angle. Products will hit the store shelves only if they conform to our strict standards.
5 Quality Check
3Raw Material Procurement
4Manufacturing
5Quality Check
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Think and act from the customer’s point of view, not just as a retailer.
This is why WE make the decisions on everything we do. Of the 10,000
products in our product line-up, 90% are NITORI’s privately branded
products, planned and developed internally. We use our own eyes,
ears and shoe-leather to research and analyze existing sources of
dissatisfaction and inconveniences in the market, in order to figure out
where and what to sell. We are constantly improving and upgrading each
phase of all processes, including procurement, manufacturing, quality and
function, price and sales method, delivery to stores and customers, as
well as post-sales customer support, all in an effort to complete the whole
process without any outside support.
We aim to take full responsibility for all aspects of everything relating to our products, as we are the ones that sell those products.
Producing products that manufacturers want to produce.
Traditional retail sales
Manufacturers
Reta i l Sa les
Customers
Retailers become the voice of the consumer, producing what the consumer really needs.
NITORI’s vision of true chain stores
Manufacturers
Reta i l Sa les
Customers
Distribution Revolution
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Manufacturing to support “Offering the Unexpected” [Our Manufacturing]
In order to bring “comfortable, luxurious home living” to our customers,
we are continually working to enhance our quality and product efficiency
so as to offer “Unexpected” products that will satisfy our customers’ needs.
More than 90% of NITORI’s products are manufactured (and
imported from) overseas. NITORI has more than 700 subcontracted
factories throughout the world. We supervise and manage all aspects
of our contract manufacturers, which support most of NITORI’s
manufacturing efforts, including manufacturing methods, production
processes, product and facility management, factory environment, and
organizational structure.
Our group company NITORI FURNITURE Co., Ltd. has its own
fully-owned factories in Indonesia and Vietnam. The total site area
of these factories amounts to around 70 thousand tsubo (more than
250,000 square feet, an area five times as large as the Tokyo Dome)
with 4,700 employees manufacturing 800,000 pieces of furniture every
year. “HOME DECO Co., Ltd. provide import and wholesale of ready-
made curtain,sewing of order curtain and its delivery. We supply NITORI with the latest design curtain from China ,Viet Nam,Turkey,etc.”
We never rely on others for raw materials, in order to ensure that we can offer products with appropriate quality and “Unexpected”
value. Starting off by examining what customers look for in quality and price, and going on to thoroughly investigate whether lead time,
functionality and cost criteria are fulfilled, NITORI handles its own negotiations and contracts. We believe that creating the right mechanisms
in manufacturing will lead to “Offering the Unexpected” with “Unexpected Value.”
NITORI’s sourcing activities throughout the world
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●Taiwan
●Vietnam
●Indonesia
NITORI’s manufacturing of “Unexpected Products” with the aim of offering better productsWe will continue to expand our operations, transcending boundaries and regions.
●Factory of NITORI FURNITURE in Vietnam
This factory, with an area of over 48,000 tsubo (over 1.7 million square feet), is located in the Quang Minh Industrial Zone in Me Linh District near Hanoi, the capital. The average age of the employees is in the early 20’s, and 90% are women aged around 20.
●ChinaOverseas
Subcontracting Factories
18 Regions740 Companies
(as of 2015)
●Japan
● Hong Kong
●Malaysia
●Thailand
Bangladesh●
●India
●Factory of NITORI FURNITURE in Indonesia
This factory, with an area of over 21,000 tsubo (over 752,000 square feet), is located in the capital of North Sumatra, Indonesia. Over 1,500 local employees work in this large scale factory, of whom 40% are women and 60% are men. This percentage shows that women play an active role in the factory. In order to improve productivity, we apply two Japanese-style methods thoroughly: “Mieruka” (identifying problems and bringing them to the foreground) and “5S” (Sort, Straighten, Shine, Standardize, and Sustain). Our key source of competitive advantage is the manufacturing process that eliminates “Muda, Mura, Muri” (Muda: Waste, Mura: Unevenness or irregularity in operations, Muri: Overburdening of people and equipment).
South Korea●
●Singapore
●Pakistan
● Philippines
●Cambodia
1990 (FY)1995 2000 2005 2010 2012 2014
(%)
0
20
40
60
80
100
DomesticOverseas
Furniture41.2%Home Fashion
58.8%
Change in Overseas / Domestic Product Ratio (based on sales)
Change in Furniture / Home Fashion* Products Ratio
(as of 2015)*HFa: Products other than furniture, including
tableware, sinks, curtains, rugs, decorative furnishings, etc.
●Turkey
●Egypt
●Spain
●France
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We share our “Dreams and Vision” and conduct business in a way that values partnership with our clients.
We believe that eliminating injustice, unfairness, or
opaqueness and building trust with clients will lead
to a sustainable business, as we strive to establish a
“truer partnership”.
The NITORI Group’s Client Charter (extract)
1. The NITORI Group companies, together with our partners,
aim to bring an “enriched lifestyle” to a global audience.
2. The NITORI Group companies, together with our partners,
strive to be the best in the world.
3. The NITORI Group companies, together with our partners,
aim for a true partnership to become the best in the world.
4. The NITORI Group companies, together with our partners,
will establish a true partnership that will realize a competitive
spirit, seeking ongoing improvements, in every related field.
5. The NITORI Group companies, together with our partners,
will establish a true partnership, eliminating injustice,
unfairness, or opaqueness.
[Partnership with Our Clients]
Factory Guidance and Open Houses Logistics Partnership
NITORI is also actively engaged in working with clients at manufacturing sites, striving to improve our products collaboratively
HOME LOGISTICS Co., Ltd. has begun strengthening relations with partner companies supporting logistics sites
We train employees using jigs, tool management improvement,
“Mieruka” using the “Kanban Method” (a set of principles and
practices that are applied to an existing process), and Modular
Production (Zero Intermediate State) to establish traceability. We also
carry out one-on-one development of younger human resources
together with our clients, focusing on education of quality control
engineers (both domestic and overseas). (FY2014 overseas results:
6 chief engineers and 78 technical advisors qualified) In addition,
we host factory tours
for clients to facilitate
upgrading technology
throughout an entire
manufacturing site.
We will also be
working to expand
our activities and host
“factory management
guidance” events.
The NITORI Group’s logistics is supported by delivery
companies as well as numerous partner companies. As a
result, HOME LOGISTICS Co., Ltd. has begun holding a
“Management Policy Meeting for Clients,” starting in FY2015,
to explain anticipated future management and partnership
developments. NITORI has adopted a proactive approach
towards working together with suppliers to implement training
relating to furniture product handling and delivery, and to jointly
organize initiatives aimed at achieving a further enhancement
in service quality. In the future, we will continue working with
partner companies in preparing for the installation of rest
facilities for drivers, as well as the introduction of materials
handling machinery* and tools etc. that can be used by all
workers, regardless of age or sex. These efforts will alleviate
issues in the logistics industry such as shortage of workers,
and will also help to address issues relating to changes in
society, such as the aging of the population and the growing
percentage of women working outside the home.
*Materialshandlingequipment:Machineryusedtoenhancetheefficiencyoflogisticsoperations.
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NITORI’s distribution network extends throughout Japan and overseas[Our Logistics]
We are able to control the flow of all products and achieve a high level of efficiency by having developed
our own proprietary distribution network and entry system.
All these efforts enable us to provide quality products at affordable prices.
NITORI group sources raw materials worldwide and has about 90%
of its products manufactured outside Japan. Importing approximately
150,000 20-feet-containers per year, NITORI group has the largest
distribution scale in Japan (for a single business enterprise). Besides
the 10 distribution centers inside Japan, we also have overseas
distribution bases in both China and Vietnam that supply products to
Japan every day. We also put a great deal of effort into making our
infrastructure more sophisticated. For the purpose of labor-saving and
preserving products better, our main domestic distribution centers
have introduced an automatic warehouse system. Our home-delivery
service utilizes an automatic planning system which can specify
the most suitable route to adjust to changes in delivery schedules.
Finding the best way of processing from a global point of view, and
returning the value to our customers, is one of our most important
missions.
Japan’s largest-scale distribution operations, with sophisticated infrastructure
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In order to deliver our “comfortable, luxurious home living,”
bringing products to our customers as fast as possible, we have
logistics centers located throughout Japan to control the main
arteries of our distribution network. By comparing track-records
against original plans, these logistics centers distill issues and
analyze reasons every day, to make improvements for the purpose
of preventing product shortages, maintaining product quality, and
reducing logistics costs. We have also introduced IT systems such
as CMS (Cart Management System) and Piece Sorter to improve
accuracy. “Quality Improvement” and “Cost Reduction” are two
areas on which we continue to focus heavily.
Large scale logistics centers support safe and smooth proprietary distribution
Having started by developing overseas distribution centers, NITORI
has repeatedly revolutionized distribution and logistics. After
introducing our innovative automatic warehouse system in 1980, we
went on to establish our own customs clearance system by setting up
the “Overseas Logistics Division.” NITORI’s products, which cover
almost all everyday commodity needs, are manufactured in many
different countries. Since each country has its own unique customs
clearance rules, overseas logistics operations have always been filled
with complicated “Apply, Approval, Permission, Contract” work. For
a long time, we entrusted all of these tasks to specialist companies,
because of the highly specialized nature of the work. By establishing
our own customs clearance system, we were able to handle all the
work by ourselves. This made it possible to substantially reduce costs
and to bring the products into Japan much more smoothly. Also, since
we were able to negotiate regarding vessels and routes with shipping
companies overseas, this made it possible to deliver from the port to
our distribution centers by the shortest route. Even though they are
manufactured overseas, our products are mainly sold in Japan. Reduced
loss and shorter time-lag are the focus of our logistics operations.
“Overseas Logistics Division” —Our own customs clearance system which expedites shipment by marine transport
Kansai Distribution Center
Kanto Distribution Center
Completing the import declaration process using an electronic customs clearance system.
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Stores that match our customers’ lifestyles[Our Stores]
NITORI has launched various different types of stores to make sure that our customers can freely
coordinate their living space and enjoy comfortable, luxurious home living.
10
0
20
30
40
50
60
5
15
25
35
45
55
(1M sets) (stores)
0
50
100
150
200
250
300
350
1967 1981 1992 1996 1999 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (FY)
StoresNo. of transactions
Change in the number of stores and number of customers
Not only do NITORI’s products offer a variety of colors, patterns and materials for
customers to choose from according to their particular lifestyle, they are also designed
to easily coordinate with other products. To make it easier and more convenient for our
customers to select the products they want, NITORI explores new locations and opens
new stores every year. Also, in order to deliver our products into the hands of customers
overseas, we are aggressively moving forward with opening new stores outside Japan.
Offering “Total Coordination” to help customers enjoy a more fulfilling lifestyle
By 2032:
3,000stores
2014 (Actual)
2022 (Planned)
2032 (Planned)
0 20 40 60 80 100 (%)
92% 8%
74% 26%
33% 67%
Domestic Overseas
U.S.A.Taiwan
JapanChina
Change in Ratio of Stores between Domestic and Overseas (Planned)
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Any good-quality product that enhances people’s lives can be bought
conveniently with “one-stop shopping”: this is NITORI’s idea of a
shopping center that is designed from a customer/user-centric perspective.
The “Power Center,” a type of shopping center that anchors fast-growing
stores from each retail model is very common in the U.S., but in Japan,
it is rare, especially GMC or realtor-operated shopping centers. Making
a contribution to enhancing people’s lives in the areas where they live by
promoting “NITORI MALL” is NITORI’s new “DREAM”.
Home goods, fashion and food services: a shopping center designed from customers’ point of view
NITORI MALL Sagamihara
[NITORI MALL Opening plan]Store Name: NITORI MALL Hirakata (provisional name)
City: Hirakata City, Osaka
Ground Area: About 58,558m2
Commercial Area: About 40,000m2
Location: Adjacent to National Highway 1
Population of commercial area: About 600,000 people (estimate)
NITORI has been opening its stores in locations with a population of
200,000~400,000 in the area. However, in order to encourage customers
to visit our stores more frequently, there was a need to create a new and
smaller store format that would work for areas with smaller populations.
“DECO HOME” is our home-fashion model which carries frequently-
purchased everyday goods. This represents a brand new concept in product
assortment and store design, as well as in the operation of the stores.
Development of a brand new store format, and advancement into new markets, in line with our future store-opening strategy
DECO HOME AEON MALL Inagawa store
In April 2015, “NITORI Printemps Ginza store”, the very fi rst NITORI
outlet inside a department store, opened its doors. This store places
heavy emphasis on coordination, and the most fashionable of products
are selected from our regular assortment to create a sales fl oor with an
innovative lifestyle message. We will continue to make improvements so
that people that may not have been aware of our products in the past can
experience and feel the joy of NITORI’s home coordination.
Taking up the challenge of moving into a new fi eld, the “urban model”, to expand our clientele
NITORI Printemps Ginza store
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Handling everything from goods to construction work
NITORI has launched an interior renovation business for homes, stores and
other facilities. This business is focused on providing a complete overhaul
of any space. This total renovation service, with a focus on our proprietary
products such as integrated kitchen systems and restroom sink units, is a
holistic service from the initial proposal right through to construction work
for system-baths, toilets, and other indoor renovation. Our services are
not simply about replacing water supply equipment, but are rather about
offering total coordination with NITORI’s furniture and home goods around
the renovated space. NITORI’s philosophy of doing everything in-house
is precisely how new forms of businesses like these can be launched
effectively.
Penetrating the B2B market, by making effective use of our product development capability
We are expanding our B2B business with these five main business areas as
pillars.
●Office Business ●Commercial / Educational Business
●Nursing / Medical Facility Business ●Hotels and Living Conditions Business
●Model Home Business
Recently more and more corporate clients have been looking to lower the cost
of installations in their offices and facilities. It is now possible for us to meet
such needs, as we can develop products for corporate clients, utilizing the
SPA know-how which NITORI has acquired through its home furniture sales
business. The corporate sales business market has been expanding rapidly
over the past few years, and we are aiming at further growth in this market.
Interior Renovation Business
Business to Other Businesses
Showroom
Example of NITORI products in use: Office
Example of NITORI products in use: Commercial Facility
Positioning ourselves as a true “LIFE STYLE SUGGESTION COMPANY,” utilizing a wide range of business fields
[Other Businesses]
NITORI’s pursuit of our corporate vision is not limited to offering home furnishing goods in stores. In
order to deliver a truly enhanced lifestyle to every person in different ways, we will continue to expand
the range of business areas in which we operate.
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In order to offer NITORI goods to as many customers as possible, we have extended the joy of shopping to the Internet
As an advertising company, NITORI PUBLIC has developed a wide range of businesses that extend beyond the boundary of the NITORI group
NITORI PUBLIC is an integrated advertising agency which
provides a variety of services, including strategic communication
planning, advertising and sales promotion. We currently conduct
marketing work for several clients, including a real estate company
and a travel agency. We have recently also been putting efforts into
developing novelty goods. Improving its business skills by dealing
with a wide range of different enterprises, NITORI PUBLIC aims to
play a role in enhancing the value of the entire NITORI group.
From creating spaces for stores to insurance
NITORI FACILITY handles maintenance duties in order to
keep the stores and offices of the NITORI group in an optimal
condition, and pursues the goal of creating an ideal space
where our customers can feel comfortable, while at the same
time the maintenance cost is reduced. Furthermore, as an
insurance agency dealing with both life insurance and liability
insurance, we support our customers and employees to design
their future in a way that is both satisfactory and reliable.
“nitori-net” website homepage / Smartphone-optimized website pages (as of August 2015)
Online shopping site for furniture and interior goods
NITORI PUBLIC NITORI FACILITY
Our online shopping business has grown rapidly in
response to the needs of customers who want to
research goods online in advance, find it difficult
to drop by our stores, or want to make online
purchases at home after checking goods at the
store during the day. With a view to providing the
same convenience on our nitori-net site as we
do at our stores, we are now adding convenient
functions such as being able to view furniture
coordination on screen, or being able to search
stock at a specific store. In addition, we have
developed a special application for smartphones
which makes it easy to access nitori-net. As the
core feature of NITORI’s omni-channel strategy,
we continue offering a way of shopping that is
more convenient and more enjoyable for our
customers.
In-store insurance shop: “Nitori no hoken + Life salon” (at NITORI Minami-suna store)Examples of major
innovations
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[Our Quality]
A thorough-going commitment to quality improvement – That is our mission as a company that delivers goods to customers.
In NITORI, where approximately 90% of our products are PB (Private Brand) products, we set our own original
quality standards and work on improving quality on a daily basis. We carry out an in-house quality inspection
before each new product launch and, if a problem is discovered, we send it back to the manufacturer with a
request for improvement. The process is repeated until the standard for quality is met. In addition, when a defect
is found in a product, we do not simply hand off the issue to the factory. We are involved at every step of the
way, including in-house investigation of the cause, development of a remedial action plan, and providing training
to support implementation of the corrective measure at the factories. Developing products that are the most
price-competitive while ensuring that an appropriate level of quality is maintained, and being responsible for our
products from beginning to end as the last point-of-contact to customers: we believe that these two things are
necessary to truly help customers achieve a comfortable, luxurious lifestyle.
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More recognition for our quality and safety initiatives
Before letting the production line start, we dismantle each product and check its structure thoroughly in order to confirm the safety of the product. It is rare for a new product to pass the in-house standard at first go, and many products repeat the improvement steps until quality standards are met.
We have worked to build an unprecedented in-house distribution network, as we believed that a complete overhaul of distribution would be a shortcut to realizing our “low price with appropriate quality” policy. We have now realized distribution cost reduction with an in-house customs clearance system and become able to supply imported products to the domestic market more smoothly.
In order for our customers to be able to shop more conveniently, we have set up a 1, 5, and 30-year warranty program for repairs or part replacement services. In addition, loyalty cards have been set up in such a way that they can be used for warranty purposes in case a product defect occurs, while effective management of the card holder’s purchase history helps us to create better products.
At the NITORI customer service center, more than 200 staff handle customers’ inquiries about stores and goods as well as customer complaints about our services. Information provided from customers is shared with all necessary departments and becomes the starting point for providing better products and services.
When a defect is discovered in a product, we investigate the cause thoroughly by analyzing the goods, while also implementing thorough after-sales service. The knowledge and know-how gained from the investigation are consistently utilized in the development of new products.
Our actions towards enhancing quality control were evaluated and we received a
commendation from the Ministry of Economy, Trade and Industry in 2014 (Manufacturing
and import company section), following on from a similar commendation in 2013 (Retail
and sales company section). We received a comment that "actions towards product safety
are leading to improvement of corporate value" from a member of the award committee.
●Quality improvement ●Product development
●Continuous improvement of products ● Member’s card●Call center
Quality control in logistics
We check, based on our in-house Quality Assurance Manual, whether our partner factories can meet our quality requirements. Even after production starts, we do not leave quality control to the factories. We carry out on-site inspections regularly so that unevenness in the product quality does not emerged during the manufacturing process.
Thorough quality control from production and logistics through to after-sales service
Quality control in production
Quality control in after-sales service provision
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19
To reduce negative impacts on the environment[Environmental Policy]
The NITORI Group is implementing environmental measures
at every stage from manufacturing through to logistics and retail sales.
Efficiency of transportation by compressing the packing size of the product
We work on reducing the frequency of transportation by increasing the number of products that can be carried at a time, by means of compressing the packing size of the product. In this way, we contribute to a substantial reduction in carbon dioxide emissions.Having started from relatively small products such as cushions and futons, we now do the same for larger items like spring bed mattresses. With compression packing of these mattresses, we expect to be able to achieve reduction of approximately 800 containers and 550 tons of carbon dioxide emissions a year.
Environmentally-friendly product development
NITORI’s original “Randoseru” (schoolchild’s satchel) co-developed with TEIJIN LIMITED, a leading material manufacturer, is an environmental-friendly product that uses recycled fiber made from PET bottles.According to an LCA (Life Cycle Assessment: a method for assessing environmental impact at every stage in a product’s life cycle, from manufacturing through to shipment, sale, usage, disposal and recycling) study, using this recycled fiber helps to reduce carbon dioxide emissions by 47% and cut energy consumption by 33%, as compared to using petroleum as the raw material.
* Data that adds in the carbon dioxide emitted in the case of burning rather than recycling (based on estimates compiled by the Industry Information Center)
Initiatives in product development
In addition, NITORI’s corporate sales division offers an outdoor bench using reclaimed wood or recycled plastic.
Simplification of product packaging
We are trying to get rid of unnecessary individual packing while promoting FRM (Floor Ready Merchandise) packaging, which enables us to display goods for sale at our stores without unpacking individually.
Efficient use of wood and paint
In order to make the most efficient possible use of wood (which is a limited resource), we utilize the edge pieces which were discharged at the production stage as reinforcing structures for furniture at our factories in Vietnam and in Indonesia. Furthermore we even use small pieces of wood as fuel for the boiler used to dry paint, in order to reduce waste. The fuel is burnt at a high temperature of 1,000 - 1,500 degrees to avoid emitting smoke. In addition, we re-use the left-over paint from the furniture production line in a solvent to wash production machines.
Initiatives in the manufacturing process
*Annual total transportation distance: Sea transportation distance
+ land transportation distance.
2012 2013 2014 (FY)56
57
58
59
60
61
57.7
59.4
60.6
Total transportation distancereduced by 3,900km/year *
Total transportation distancereduced by 2,700km/year *
(CBM)
Average loading (CBM) per container
< Compression Packaged >
*The illustration is for reference purposes only
16cm
97cm
197cm
103cm
28cm28cm
Made using 6 recycled PET bottles (500ml x 6)
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20
[Traditional Method] [Container Round Use]
Reduction of CO2 emissions by making transportation more efficient
We promote efficiency in product transportation and work on reduction of CO2 emissions by shortening movement distance.Although we used to deliver ordered goods to customers via an in-house distribution center, we are now working on creating a new mechanism that enables us to deliver the goods directly from the manufacturer to the customer, eliminating relay points.As a result of these actions, CO2 emissions from our stores will decrease.
Container Round Use
Container Round Use (CRU) is a concept in which a devanned container is used for export without returning it to the shipping company. In cooperation with many of our business partners, NITORI applied the round use approach to 2,000 containers in 2014 and was able to reduce CO2 emissions by approximately 130 tons.
Initiatives in logistics
Initiatives in store operations
Energy saving at stores
In 2013, we started to introduce the use of LED ceiling lights to newly-opened stores. As for existing stores, we are also changing their illumination sequentially. Besides LED lights, other energy saving facilities such as a heat pump type air conditioner, demand control system (which suppresses electric power consumption) and BEMS (Building Energy Management System), have also been introduced.
Use of eco-friendly packing material
We use reusable packing materials for furniture product transportation between bases to reduce consumption of corrugated cardboard or urethane foam.In 2014 we introduced special packing materials for case goods (e.g. cupboards) into approximately 200 stores. We will continue introducing new packing materials and expect to be able to thereby reduce garbage discharge by 550 tons annually.
Other initiatives
Introduction of TV/WEB meetings
We have organized a system which enables us to have meetings anytime, anywhere, through each office’s TVs or personal PCs. This leads to a reduction of CO2 emissions by enabling people to not have to meet in person.
Actions aimed at energy saving and resource saving in offices
We have introduced fluorescent lamps equipped with reflecting plates with a high reflection ratio into our large-scale distribution centers in the Kanto and Kansai regions, and this has contributed to a reduction in electric power consumption. In addition, we implement “paperless” projects, including computerization of several types of documents, and deployment of projectors to meeting rooms.
PortFacility
PortFacility
ImporterImporter
Exporter Exporter
Empty
Empty
Cargo
Cargo
Cargo Cargo
Empty
2013 2014 (FY)
(kg)
68
72
76
80
84
8885
74
Approx. 10%Reduction
2011 (FY)2012 2013 2014
(t-CO2)
0
30
60
90
120
150
Change in CO2 emissions per store from domestic transportation
Annual consumption of corrugated cardboard per sales transaction (kg)
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21
“Glad to have NITORI”Aiming to be a company that is appreciated by societyWe conduct a variety of social contribution activities to give something back to the society that has supported us and helped us to achieve today’s success, with a particular focus on initiatives in Hokkaido, the region in Which NITORI was originally founded.
Endowed Chairs at Universities
Arranging lectures on chain store management to convey basic principles of distribution and service to young people who will be the mainstay of society in the future. Lectures are given by key personnel from individual companies in the NITORI group.
Public Interest Incorporated Foundation “NITORI International Scholarship Foundation”The NITORI Group has received a great deal of support from Asian countries in relation to several business activities, such as product supply. Hoping to “return the favor to Asian countries”, NITORI International Scholarship Foundation was established in March 2005 with a monetary donation from its Representative Director. We have been providing scholarships, developing human resources, and arranging exchange activities for international students from all over the world studying in Japan. In FY2015, the cumulative total number of scholars supported by the Foundation has reached 895 scholars from 38 countries and regions, including China, Indonesia, and the United States. We have also started expanding our network worldwide, providing financial support to local students studying at universities overseas. * Other activities: Scholarships for high school students who were affected by the East Japan Earthquake.
Public Interest Incorporated Foundation “NITORI Culture Foundation”NITORI Culture Foundation was established in April 2011 to serve as a bridge for new culture formation by developing, passing on, and supporting Culture, Art, and Tradition. We changed the Foundation’s status to that of a public interest incorporated foundation in December 1st 2012. As of FY2015, we have provided grants to 105 organizations, supporting environmental activities such as tree planting and other regional revitalization activities.
● Approx. ¥1.2 billion monetary donation to help those affected by the East Japan Earthquake
● ¥200 million monetary donation to help those affected by the Sumatra Earthquake (Indonesia)
● ¥100 million monetary donation to help those affected by the Niigata-Chuetsu Earthquake in Japan.
● ¥48 million in Scholarships for International Students from Asian countries● Monetary donation to Japan Alliance for Humanitarian Demining Support (JAHDS)
● Approx. ¥100 million to help those affected by the Great Sichuan Earthquake (China)
● Hosting a Joint Seminar with Hokkaido University● Donation of 25 satellite phones to an NGO● Donation of bedding to help those affected by the
Hiroshima Landslides
Activities of the Public Interest Incorporated Foundation
Main donations and donation activities
Regional and Social Contribution through Sports
●NITORI Ladies Golf Tournament
●Establishing NITORI Ladies Track & Field Club
[Interaction with Society]
Looking towards the Future
Currently, we are experiencing a period of
dramatic change. NITORI has over 400 stores in
Japan, and our overseas markets now extend
to the U.S. and China. We believe that “not
being satisfied with the current situation and
always looking for improvements,” instead of
being content with the status quo, is essential.
This is why we focus on communicating with
our employees. We are actively trying new
things, such as extracting ideas from mid-level
employees and female employees.
The “human resources” that support
manufacturing, logistics, and sales are one of
the most valuable assets of our company, and
we believe that communication with them can
be a major driver of growth for the future. We
will keep on challenging ourselves to realize our
Dreams and our Vision.
Toshiyuki ShiraiExecutive Vice PresidentNITORI Holdings Co., Ltd.
President and CEONITORI Co., Ltd.
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22
Closing month Feb. 2011 Feb. 2012 Feb. 2013 Feb. 2014 Feb. 2015
Revenue (millions of Yen) 314,291 331,016 348,789 387,605 417,285
Ordinary income (millions of Yen) 53,594 59,151 62,195 63,474 67,929
Current net income (millions of Yen) 30,822 33,548 35,811 38,425 41,450
Net assets (millions of Yen) 146,038 174,949 209,764 247,898 310,531
Total assets (millions of Yen) 246,187 267,153 284,290 321,703 404,793
Capital ratio (%) 59.2 65.3 73.6 76.8 76.4
Number of employees (persons)
(Average no. of temporary employees)6,073
(6,431)7,213
(7,145)7,496
(7,776)8,373
(8,511)9,215
(9,877)
Number of stores (stores)* 244 268 300 331 373
* Includes DECO HOME and overseas stores (Taiwan, U.S., and China)
[Changes in revenue and stockholding value]
Transition of stockholding value (Yen)
Ordinary income (billions of Yen)
'16(Forecast)
'15'14'13'12'11'10'09'08'07'06'05'04'03'02'01'00'99'98'97'96'95'94'93'92'91'90'89Initial
① ② ② ③ ②② ②
②
④
④
Stock was split 10 times, resulting in an 18-fold increase in the number of shares.
※
(Yen) (billion Yen)
0
50,000
0
10
20
30
40
50
60
70
80
100,000
150,000
2008 Global
Financial Crisis
200,000
250,000
3,100 4,650 4,965 5,616 5,897 5,647 7,144 8,002 8,328 5,839 3,018 5,95711,757 7,446 9,798
17,94924,808
29,581
49,09954,366
46,74747,970
64,99470,168
64,43064,806
89,920
142,968
205,800
1989 Listed on Sapporo S
tock Exchange
2003 Listed on Tokyo Stock E
xchange
At time of listing in 1989
As of February 2015
Comparison
Number of stores 18 373 20.7 timesRevenue (100 million yen) 117 4,172 35.7 timesOrdinary income (100 million yen) 8 679 84.9 timesFair value of shares (per share) 3,100 yen *205,800 yen 66.4 times
Changes in the company’s performance since listing on the stock market
① Stock split: 1 stock 1.5 stocks
② 1 stock 1.2 stocks
③ 1 stock 1.05 stocks
④ 1 stock 2 stocks
U.S.5 stores
Japan367 stores
China5 stores
Taiwan24 stores
[Financial Highlights (on a Consolidated Basis)]
[Corporate Profi le]Company Name
Sapporo Head Offi ce
Tokyo Headquarters
Osaka Headquarters
Established
Registered
Capital
Number of employees
Business areas
NITORI Holdings Co., Ltd.
1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo,
Hokkaido 001-0907
3-6-20, Kamiya, Kita-ku, Tokyo 115-0043
1-1, Kamisu-cho, Toyonaka, Osaka 561-0823
December 1967
March 1972
133.7 million yen (as per the consolidated fi nancial
statements issued in February 2015)
9,215 full-time employees
(average no. of part-time workers: 9,877 employees)
(as of February 2015 [on a consolidated basis])
Business administration of the group companies and
other related business
Number of stores
(as of the end of Oct. 2015)
NITORI 330
DECO HOME 37
TAIWAN 24
U.S. 5
CHINA 5
TOTAL 401
*As of August 2015
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