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11 Home center business

38 Royal Home Centers throughout Japan
images The home center business is a growth field within the retailing sector in Japan. During the term we opened four new stores and closed two existing ones that were insufficiently profitable, in order to enhance the efficiency of store operations. Aggregate floor space was expanded by 13.7% to 166,239 square meters, and the number of store visits during the term grew by 21.1%, topping 20 million for the first time. As a result, annual sales rose by a substantial 14.7% year-on-year, to ¥52,159 million, and operating income grew by 1.4% to ¥305 million.

Net sales/Operating income Number of employees/Operating income per employee
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Our home centers stock an average of 50,000 products, well above the industry average in Japan of approximately 31,000 items. These range from interior and exterior goods to gardening and outdoor products, pet supplies, leisure goods, and daily necessities, and include many environmentally friendly items with Ecomark certification and private-brand products. DIY is given strong emphasis, with an extensive range of items both for the general user as well as materials and tools for professionals. A characteristic of our stores is the large number of carpenters and other building professionals who use them.

We also took steps to cater to the burgeoning renovation market. We stepped up the display and sale of household fixtures and fittings, and advisory services in which customers receive advice from experts in fields such as building, interiors, and garden design.

We intend to continue to expand this business into a 50-store network by fiscal 2005. This will be distinguished from rival stores by offering a product range that takes advantage of the economies of scale of a nationwide chain, but at the same time being managed in a way that ensures that each center is attuned to the needs of the locality it serves.

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Number of home centers and floorspace Number of customers and average sales per customer
Breakdown of sales at Royal Home Centers
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