ASICS’ Strengths

From the earliest days of the Company, we have consistently innovated across a wide range of fields, leading to the creation of numerous standout technologies. Starting with the launch of basketball shoes in 1950, ASICS has grown to become a sporting goods manufacturer favored by athletes around the world. That success has been built on our commitment to athlete performance. By scientifically analyzing human movement and the specific characteristics of each sport – from elite athletes to casual runners and in sports ranging from tennis and volleyball to baseball, football, rugby and leather walking shoes – we have developed products with innovative materials and structural designs that have won the support and trust of athletes worldwide. We are harnessing that expertise and technology to continue creating innovative technologies, products and services for all areas of life, not just sport, driven by an unwavering desire to make the world a better place.

Revising AGP2020 to target sustainable growth

Two years have passed since we created our FiveYear Strategic Plan, ASICS Growth Plan (AGP) 2020. However, progress towards the plan’s 2020 targets has been extremely challenging.
The main causes have been a shift in consumer preferences that started in the U.S. and rapid changes in channels. In consumer preferences, we have seen a shift from people passionate about running, which was one of our strengths, to greater interest in sport as a fashion statement, with more people, especially younger consumers, selecting sports shoes and apparel as casual wear. In high-performance running shoes, our brand presence has weakened due to a slowdown in the market itself and a blurring of the boundaries between sports and fashion. In retail channels, there has been a dramatic change in consumer purchasing behavior from physical retail stores to eCommerce, leading to a growing number of bankruptcies in brick-and-mortar stores. In the U.S., we implemented several measures to address those developments, such as restructuring our sales organization to strengthen links with major retailers and improving our distribution network for highperformance products, but these efforts are yet to yield results. As a result, net sales over the past three years have stalled at around ¥400 billion. Furthermore, we have not been able to hold down rising selling, general and administrative expenses while failing to reach our sales targets, leading to lower profitability.
To break this negative cycle, we have revised our sales targets as an initial step, and we aim to increase earnings by allocating marketing investment, personnel and other management resources in the growth fields. We will also reinforce the importance of profitability in each business division, reviewing products, sales methods and processes to build the foundations for further growth.
After revising the AGP2020 targets, we are now aiming for ¥500 billion or more in net sales, average annual sales growth of 7% from 2017 to 2020, an operating margin of 7% or more, and ROE of 10% or more. We are also targeting average annual sales growth in East Asia of 13% and 16% in China, a priority area.
Our Five-Year Strategic Plan lists seven core strategies. We will maintain the basic direction of those strategies while building a foundation for future growth by focusing resources on growth fields and improving profitability.

Priority allocation of resources to growth areas
Our top priorities are running shoes and the U.S. market. The second priority is China. Our most important initiative is to develop the digital field.

Running shoes in the U.S. market
 We have positioned the U.S. as our most important region because it has a vast running market and it tends to lead consumer trends in other regions. Although changing consumer preferences have led to slightly sluggish sales in the performance running market, we need to expand market share and reinforce our brand in the U.S. Otherwise, we will not be able to build a competitive advantage in the casual running category. We will relentlessly develop new technologies and pursue innovation in our highest-performance products, while also emphasizing the advantages of our high-performance products and strengthening sales to specialty stores aimed at serious runners. In the athleisure category – casual clothing and shoes designed to be worn both for exercising and everyday use – we plan to convert technologies developed for high-performance products, an ASICS strength, into a form that is visible to consumers and incorporate them in other products.
In marketing, our goal is to not only create a performance image through our sports assets, but also to communicate a unified brand message and provide product information via celebrities with high profiles in athleisure and digital communication.

China
Our second priority is China. We see significant potential in the Chinese market, as the country’s economy is expanding and our current market share is relatively low compared with other regions.
Sales in China are strong and we expect to see further growth going forward. Moreover, the Chinese government encourages participation in sport as a national policy. We will continue to focus on performance running shoes to tap into continued growth in the number of runners in China amid rising interest in healthy lifestyles. We will also promote our brands by actively supporting marathons and other events, while also using local celebrities to improve our brand image via digital media.
Onitsuka Tiger, which we are working to build up in China, has become very popular as a brand originating in Japan. We will continue to promote and enhance the value of the brand by opening flagship stores in major cities with a focus on high-end products.
In the Chinese market, eCommerce is more advanced than in the U.S., so we need to have a strong presence in China’s online space. Specifically, we will enhance consumer touch points and expand sales through partnerships with competitive online portals. In our own eCommerce channels, we will provide information about product features and product background stories and utilize data gleaned from purchases and browsing history in product planning

Digital commerce and marketing
The last key field is Digital commerce and marketing. We aim to invest actively in digital content to expand and cultivate contacts with our consumers. As explained in our measures for the U.S. market, we will offer products tailored to individual user foot shapes and training frequency, while making use of data and insights from more than 43 million Runkeeper members, our proprietary online foot shape-measuring app Mobile Foot ID, and other services such as the ASICS Studio, training menu. We will continue research and development in services, with a focus on our core running category, to further improve the customer running experience. We will also track online browsing history, using it to provide information personalized to each individual when they visit brick-and-mortar stores, enhancing their shopping experience. Meanwhile, in fields other than running, we will maximize customer benefits and convenience through collaboration with external partners. We will also utilize venture capital to promote the use of digital technologies in our products and services. There are limits to the connections we can cultivate with customers through our own digital commerce and marketing strategies, so we will establish partnerships with competitive online retailers, aiming to expand sales based on win-win relationships.

Improvement of profitability
We aim to improve profitability in Apparel, Core Performance Sport shoes, Retail and Business operation.

Apparel
We have consolidated global functions to improve efficiency in global projects and strengthen brand and design direction. Our next step is to radically overhaul product planning, development and production systems. Over the last few years we have focused on new design proposals and we plan to transfer success in that area to sports fashion products to expand sales in the athleisure market..

Core Performance Sport shoes

This category will play a vital role in maintaining our position as a True Sport Performance brand. Keeping a close eye on return on investment, we will channel investment into strategic product categories to improve profitability, while enhancing the contribution to the ASICS brand as a whole.

Retail
We are tightening our focus on profit management in our own retail channels. Specifically, we will carefully monitor and control the performance of small and medium-sized stores and factory outlets on a store-bystore basis. We will also promptly scrap unprofitable stores, create highly profitable products and improve operations at each store and head office division. Brand presentation will also be strengthened using our flagship stores opened last year in New York, London and Harajuku, Tokyo.

Business operation
Our aim is to achieve speed, accuracy and productivity in internal business operations such as product development, sales and business analysis by taking maximum advantages of digital technologies and robotics. We also plan to reduce costs by reviewing procurement processes across our organizations in Japan, the U.S. and Europe, which are particularly large. We will also improve work practices and continue to maximize corporate value.