Stable New Mall Openings Coupled with Faster Pace of Openings

In operations in Japan, our first task is to continue efforts to expand new business bases. Since the collapse of Lehman Brothers, competition between shopping centers has intensified. In this climate, ÆON MALL has pushed ahead with the rigorous selection of properties for development and the opening of new shopping malls. As we continue with the stable opening of new malls, we plan to channel energy into quickening the pace of openings and initiatives for developing new prime locations. The current fiscal year ending February 20, 2012, has already seen the opening as scheduled in March 2011 of ÆON MALL Kofu Showa (Yamanashi Prefecture) and ÆON MALL Omuta (Fukuoka Prefecture). Both malls are off to a strong start, especially Kofu Showa, where performance has surpassed targets despite the impact of scheduled blackouts associated with the Great East Japan Earthquake and other issues.

In the fiscal year ending February 20, 2013, plans call first for two shopping malls, then four more malls in Japan’s Kanto, Kinki, and Kyushu regions the following year. The ÆON Group is integrating all developer business functions into ÆON MALL, a move we expect to accelerate the pace of shopping mall openings going forward.

Renovating over Half of Existing Shopping Malls

We plan to vigorously carry out renovations at existing malls to better attract customers and boost earnings. In fiscal 2011, plans call for renovating 9 malls across the Chubu, Kinki, and Kyushu regions. Another 10 shopping malls are slated for similar treatment in the fiscal year ending February 20, 2013, followed by 9 more the following year. Ultimately, ÆON MALL is scheduled to renovate 28 malls, or more than half of its existing roster, over the next three years. Floor space expansion is on tap for two of these facilities.

Expand New Businesses to Groom New Earnings Sources

ÆON MALL is also seeking to expand new businesses that will serve as new sources of earnings. In the property management (PM) business, which continues to deliver stable results, we are currently involved in several projects. In the mall media business, where we leverage the customer attraction of ÆON MALL facilities to conduct advertising and other media-related activities, our intent is to take advantage of the Group’s more than 100 shopping centers to further groom this business as a stable earnings source.

Ultimately, the goal is to promote stable earnings expansion by strengthening our business base in Japan, and accelerate the development of operations in China and ASEAN economies.