Since our establishment in 1999, Primo Japan has sold bridal rings under the management philosophy of turning “Primo” dreams into “Primo” happiness. Behind this philosophy is our desire to create wedding rings for couples to carry with them forever as reminders of the happiest moment of their lives. To achieve this even as the values of our customers grow increasingly diverse, it is important we create an organization in which every employee thinks and acts first for the customer. In turn, building such an organization depends heavily on how we hire and train our employees. We believe that new employees are like diamonds in the rough, who we then polish through training so that they can focus on helping our customers achieve their own happiness.

The larger business and competitive environment we find ourselves in today continues to be a difficult one, with little room for optimism. Despite these conditions, we remain focused on our management goal of being the No. 1 closer of engagement and wedding ring contracts in Japan, and will work to expand profits by focusing corporate resources on the following three areas.

First, we will continue to expand through new store roll-outs. Today, Primo Japan has 57 I-PRIMO stores and ten Lazare Diamond Boutiques, for a total of 67 stores operating domestically, but we believe there remains considerable room for more stores. In the previous fiscal year, we added I-PRIMO stores in Machida and Niigata, and we plan a constant succession of new store roll-outs in the current fiscal year as well. Second, we will accelerate the expansion of our business in Asia. At the end of the previous fiscal year, we established a local subsidiary in Hong Kong, a follow-up to our entry into Taiwan; a store opening is planned for next spring. At the same time, we are continuing our research into opportunities in Asian regions outside of Hong Kong. Finally, we will work to enhance the customer interaction skills and other personal qualities of our employees by expanding our Primo College and other training programs. Sales and service training is essential in a business such as ours, which deals with high-priced merchandise. We will continue to focus on employee training in our ongoing effort to win the support of as many customers as possible.

While demographic changes involving a falling birth rate and aging population affect our business, an equally pressing issue for Primo Japan is the continuing drop in the percentage of couples purchasing engagement rings. One reason for this drop, we believe, is that people have come to think of the proposal and the engagement ring as two separate things. To encourage customers to move away from this kind of thinking, over the past fiscal year we conducted a variety of events centered on the word “propose”. While this is likely to become a long-term initiative, we will continue to devote our efforts to rebuilding the tradition of having an engagement ring in hand when proposing marriage.

We greatly appreciate the patronage and support that we have received from our customers, suppliers, shareholders, and everyone else affiliated with Primo Japan. We look forward to your continued support and guidance now and in the years to come.