Announcement of Planned Transition to a Holding Company
World Co., Ltd. today resolved at an extraordinary meeting of its Board of Directors to pursue a basic policy of shifting to a holding company structure by the target date of April 1, 2017.
Preparations and plans for the transition will commence after gaining approval at an extraordinary general shareholders meeting scheduled to take place toward the end of March 2017. We will provide more details as soon as they become available.
1. Background to the transition to a holding company structure
The apparel market in Japan continues to mature at an accelerated pace, making the competitive environment increasingly harsh. Additionally, advancing waves of digitization have led to a dramatic shift in consumer behavior.
To maintain a corporate organization that achieves consistent growth and continues to survive the competition amid vast changes in the domestic apparel market and among consumers, it is imperative that we establish a new and innovative business model in the same vein as the repeated changes we have implemented throughout our corporate history.
Against this backdrop, we will seek to become a more competitive organization that from April 2017 will be optimized to the market. To that end, we will spin off our brands into separate companies by business model and marketing channels as a means of transferring authority even further and will make decisions with greater speed.
We have also determined that in order to bolster our competitiveness, we must promote the development of diverse business models that transcend the boundaries of our brand businesses. For that reason, we will prepare for the transition to a holding company structure.
The World Group will prepare for the transition to a holding company structure for the following reasons.
- Achieve market optimization for brand businesses
With respect to our brand businesses, we will respond with agility to the changing market through initiatives that include a reallocation of our business portfolio. Also, we will aim for even greater efficiency and optimization toward developing different profit structures for each business model.
- Accelerate initiatives to achieve profitability for platform businesses
Over the years, we have constructed platforms in various areas, including production, sales, and an array of business services. We will seek to develop these platforms into independent businesses with the aim of breaking away from a business structure that is dependent on our brand businesses.
3. Transition method and timeline
We plan to have further discussions to determine the details of our transition to a holding company structure.
At present, we envisage a transition process through which each of our current and future subsidiaries will assume the rights and responsibilities of their respective businesses based on absorption-type company split agreements.
The following is an overview of the transition schedule.
|November 29, 2016||Resolution by the Board of Directors concerning the basic policy on shifting to a holding company structure (extraordinary meeting)|
|Mid-February 2017||Resolution by the Board of Directors concerning the conclusion of absorption-type company split agreements|
|Late March 2017||Resolution by the Shareholders Meeting and Class Meeting concerning the transition to a holding company structure
(extraordinary meetings of shareholders and class shareholders)
|April 1, 2017||Transition to a holding company structure|
4. Group structure following the transition (tentative)
Shaded sections signify companies that are scheduled to be established (company names to be decided).