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News Release

2010/01/19

Announcement Regarding Reorganization of Subsidiaries

World Co., Ltd. has decided to reorganize the operations of production subsidiaries World Industry Co., Ltd. and World Industry Fukushima Co., Ltd., which had been responsible for apparel manufacturing and production planning, into new companies through spin-offs and joint spin-offs (incorporation-type company splits) effective January 18, 2010, and to liquidate the two companies effective March 31, 2010.

1. Reason for reorganizing these subsidiaries

World Co., Ltd. has been endeavoring to maximize customer value and productivity based on the SPARCS* concept, which seeks to unify the entire business process from retail to production by converting losses and inefficiencies into new value. Under this concept, we established our production system to enable integrated control of the purchasing and production of all of our brands from the perspective of total optimization centered on the Production Headquarters. With respect to production, we have been restructuring our production organization since March 2009 under the product categories of knit, fabric and jersey toward achieving more efficient production with minimum loss through production based separately on these categories across our brands. With our goal for the category-based organization of our Headquarters in sight, we are taking this opportunity to proceed to the next step—reorganizing World Industry Co., Ltd., which produces knit and fabric products at its factories in Sumoto City, Hyogo Prefecture, Okayama City, Okayama Prefecture, Miyakonojo City, Miyazaki Prefecture and Matsumoto City, Nagano Prefecture, and World Industry Fukushima Co., Ltd., which maintains knit product factories in Date City and Soma-gun, Fukushima Prefecture, and Shibata-gun, Miyagi Prefecture, into a system that facilitates even greater organic collaboration with the newly reorganized Headquarters. We intend through these efforts to establish a production system that delivers greater value for the World Group.

Industry Matsumoto Co., Ltd., which is to be established through the spin-off, will not be included in the category-based framework. It will instead be positioned as a factory for pursuing possibilities in flexible and varied production capabilities.

※1 SPARCS:
World’s proprietary business model, combining Super, Production, Apparel, Retail, and Customer Satisfaction.

2. Overview of newly established companies

(1) World Industry Fabric Co., Ltd.
a Business transferred: Fabric business of World Industry Co., Ltd.’s Miyazaki Technology Development Laboratory, Okayama Technology Development Laboratory and Goshiki Technology Development Laboratory
b Date of incorporation: January 18, 2010
c Main office: 3457-1, Ohori, Nakakirishima, Yamada-cho, Miyakonojyo City, Miyazaki
d Representative: Yasushi Ito
e Capital: ¥90 million (100% owned by World Co., Ltd.)
f Number of employees: 404 (as of January 18, 2010)
g Fiscal year end: March 31
(2) World Industry Knit Co., Ltd.
a Business transferred: Knit business of World Industry Fukushima Co., Ltd. and World Industry Co., Ltd.’s Goshiki Technology Development Laboratory
b Date of joint incorporation: January 18, 2010
c Main office: 1052-1, Tsushimanzai, Goshiki-cho, Sumoto City, Hyogo
d Representative: Tatsuji Kada
e Capital: ¥41 million (100% owned by World Co., Ltd.)
f Number of employees: 191 (as of January 18, 2010)
g Fiscal year end: March 31
(3) Industry Matsumoto Co., Ltd.
a Business transferred: World Industry Co., Ltd.’s Matsumoto Technology Development Laboratory
b Date of incorporation: January 18, 2010
c Location: 7110-45, Matsumotodo, Imai, Oaza, Matsumoto City, Nagano
d Representative: Yasushi Ito
e Capital: ¥35 million (100% owned by World Co., Ltd.)
f Number of employees: 83 (as of January 18, 2010)
g Fiscal year end: March 31

3. Overview of companies scheduled for liquidation

(1) World Industry Co., Ltd.
a Business: Apparel manufacturing and production planning
b Established: November 4, 1980
c Main office: 525-1, Hirota, Hirota, Minami-Awaji City, Hyogo
d Representative: Wataru Nishiuchi
e Capital: ¥92 million (100% owned by World Co., Ltd.)
f Number of employees: 569 (as of December 31, 2009)
g Fiscal year end: March 31
h Scheduled completion of liquidation: March 31, 2010
(2) World Industry Fukushima Co., Ltd.
a Business: Manufacturing and production planning of knit products
b Start of operations: October 1, 2005
c Main office: 107 Aza Yamato Hobaramachi, Date City, Fukushima
d Representative: Tatsuji Kada
e Capital: ¥99.5 million (100% owned by World Co., Ltd.)
f Number of employees: 113 (as of December 31, 2009)
g Fiscal year end: March 31
h Scheduled completion of liquidation: March 31, 2010

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