Q&A with top management | From the president to investors
Responses to questions below are as of the month posted. The situation may have changed, due to various factors including economic conditions and the competitive landscape within the industry, depending on the time of viewing.
- Does PC DEPOT handle PS VITA?
- PS VITA is a video game console, but as it is a product that can be connected to the Internet, our company does handle it in our shops. In addition, we also offer some services for the customers who purchase "PS VITA", for example setting up a wireless connection or a connection to the PlayStation network, enabling customers to play online games with the console right out of the box.
- Does PC DEPOT currently have any outside board members?
- In order to strengthen the functions of management monitoring/supervision, and also to enhance the system enabling adequate and impartial decision making, PC DEPOT appoints a number of outside board members. Among eight directors we have at present, as many as three are outside board members. These board members are consisted of a certified public accountant , lawyer and a professional in such areas as risk management, business continuity, and information security. They give the company objective advice in the times when we need to make decisions regarding important managerial matters and advise us on how to best supervise our business operations. We plan to continue having outside board members in the future, since their presence greatly enhances our system of corporate governance.
- Could you provide any information regarding the plans to hire new graduates in the next term?
- We plan to actively increase the number of shops further with about five PC DEPOT shops and twenty to thirty PC DEPOT PC Clinics. To prepare ourselves for the increase, we plan on taking active steps to hire new personnel. We intend on hiring about 100 people, which is more than the number hired during this term.
- What concrete impact will the flood in Thailand have on the business?
- Due to the damages incurred by factories manufacturing hard disks, at present there are reasons to expect shortages of personal computers, PlayStations and other products using hard disks. Also, there might be shortages of supply of certain models of digital cameras, printers, etc. As a specialized store, PC DEPOT will provide a number of solutions for customers’ trouble, such as advising substitutive goods or offering repairs for the products they currently use.
As for the impact of the flood on business results, we into consideration the information available as of the beginning of November and announced the revised earnings forecast on November 8.
Please refer to it for details.(Japanese Only)
- Does PC DEPOT sell au iPhone4S?
- au iPhone4S is currently available at 24 shops directly managed by PC DEPOT that handle Macs.
We also currently sell Softbank iPhone4s in 56 shops of PC DEPOT, that is, in most shops of the company.
- What is the difference between the technical services/support offered by PC DEPOT and repairs/support available at the manufacturers?
- PC DEPOT offers quick solutions and measures firstly because we can diagnose the problem right at the shop, and secondly because we provide a service comprised of inspection and setting of users' environment as a whole, including the computer itself, peripheral devices, Internet connection, etc.
- Japanese manufacturing industry incurred extensive damages due to the flood in Thailand, and judging from the news, it can affect the year-end shopping rush. Does PC DEPOT expect any negative impact?
- It seems that there might be certain negative impact on digital cameras, printers, hard disks, and some other products. However, at present it is too early to make any projections about the range or the extent of the impact.
- It seems that results for the month of August were unfavorable. Was this due to a backlash from demand for digital terrestrial broadcasting?
- Compared to the same month in the previous year, there was a decrease in net sales and the number of customers for August. Handling of televisions began methodically from June in the previous year. In August, sales were conducted at some stores as part of efforts to expand shops handling the product. Therefore, we did not directly experience a major backlash from demand for digital terrestrial broadcasting. Instead, we believe that the decreased results were the effect of multiple factors such as consumer confidence and falling unit prices for all products, including personal computers.
Net sales for service were almost in line with the plan.
- Is there special demand for energy-saving products in winter?
- We do not handle seasonal products. Therefore, similar to summer, we predict little direct effect regarding special demand for energy-saving products.
- To prepare for the advent of the Smart Era, does PC DEPOT have any plans for business expansion to different types of operations involving additional dealing in products other than those currently handled?
- The business of PC DEPOT is centered on solving various troubles of the customers related to personal computers and networks. We are open to possibilities that could result in a synergistic effect with our already established business, but we are not planning on handling products that are not related to personal computers or networks, and neither do we plan an entry into any unrelated business areas.
- Judging from the results of the first quarter, it would seem that it will be difficult to achieve the results planned for this term. What are the reasons you do not expect a downturn in the figures for the full fiscal year?
- In the first quarter of the term ending March, 2012, there was an increase in revenue and a decrease in profits.
Service sales advanced favorably and the gross profit increased, but following an increase in sales and general administrative expenses, there was a decrease in profit. The dominant cause of this is the increase in personnel and other expenses of the shops of 34 PC DEPOT PC Clinics that have been opened since September, 2010. In the first quarter the situation was in fact quite severe.
But even though there are many uncertain points and some elements are completely unpredictable at present, according to our estimations, the situation is in the range making the achievement of the plan for the full fiscal year possible.
A detailed explanation is also available at this page.(Japanese Only)
- The CEO of Apple commented that the PC will no longer be the hub of digital life soon. What do you think?
- The Internet is entering its next generation, and the era with the PC as the hub is ending, but the era when all Internet devices such as smart phones and TVs have great potential is coming. Therefore, we thought we have to be a "Solutions Store" to be ready, and we have been preparing for a long time.
We will continue to strengthen our handling of products that can be connected to the Internet such as smartphones and TVs, and we will develop as well as provide technical service and supports for such products.
- The full-fledged summer has come and the opportunities to save power are increasing. Has PC DEPOT made any related changes to its organization?
- Since the Great East Japan Earthquake, taking into account the peculiarities of each locality and having secured the understanding of our customers, we have changed the closing time of certain shops that had previously operated until 22:00 to two hours earlier.
Although we have not adopted this measure in all of the shops, depending on the situation we are fully prepared to enforce new changes regarding business hours in the future.
- Are there any problems with getting hold of the personnel necessary to accommodate the expansion of the shop network during this term?
- PC DEPOT has already conducted measures to reinforce the recruitment. We are sparing no efforts to ensure that we have the necessary personnel, which is an essential prerequisite for our business, by continuing promoting part-timers to the status of contracted employees, and promoting contracted employees to full-time employees, in addition to hiring new graduates.
- It seems that there are some areas, in which a PC DEPOT shop is in close proximity with a PC DEPOT PC Clinic in another volume electronics retailer. What is the idea behind this proximity?
- We at PC DEPOT strive to achieve a more dominant presence of the company in roadside shops.
Customers who come to PC DEPOT shops and those who come to PC DEPOT PC Clinics established in other volume electronics retailers are different in many aspects, and we shall thus strive to attain dominance by employing both types of business operations. Accordingly, the number of areas, in which the two coexist in close proximity, shall increase further in the future.
- Will current consumers' disposition of consumption to save power and energy have any impact on PC DEPOT?
- A PC DEPOT does not deal in such products directly related to the issue as electric fans or LED bulbs. On the other hand, it seems that there are people turning to personal computers for aid, for example, watching digital terrestrial broadcasting not on a large-sized TV set but on a personal computer or preparing for possible power cuts by setting up mobile connection. We believe that interest in such devices and peripheral equipment will increase.
One of the measures PC DEPOT has started as a part of our technical service and support is the service of setting up power-saving mode on personal computers (by setting up power-saving programs offered by Microsoft Japan Co., Ltd.)
- Are any measures conducted to accommodate the increase of Internet usage among the senior generation?
- Our company accommodates a broad range of needs encompassing everyone from beginners to experts. By offering information, offering suggestions regarding the choice of the products, and also offering such technical service and support as setting, connection, and repairs of personal computers tailored to the individual level of each customer, we are offering our users comfortable environment. We also have special "senior discount".
("Senior discount": a PC DEPOT discount system for senior customers aged 65 or over.)
We are also currently extending technical service and support to encompass not only the personal computers but also smartphones and other similar devices.
- What is the summary of the important points of Financial Results for the Fiscal Year Ending March 31, 2011?
- A There was an increase in both sales and profits in the fiscal year ended March, 2011. Under the impact of Great East Japan Earthquake and due to some other factors the results were lower than the projections, but we still managed to reach the highest level of profit ever. Service sales, which mainly consist of technical service and support were particularly high, and as we have made a concentrated effort to enlarge the lineup of Internet devices (products that can be connected to the Internet), we managed to keep the level of product sales reached in the previous year.
We are offering a short movie describing the current financial results highlights and a short movie of financial results briefing session. Please refer to this page for details. (Japanese Only)
- Will the recent disaster have any impact on the opening of shops scheduled for this term?
- First and foremost we would like to extend our deepest sympathies and condolences to all those who suffered tragic losses in the recent East Japan Earthquake.
In the previous term, PC DEPOT has opened three new shops (two by our Company, and one by a subsidiary), and during this term we are planning on opening about five shops, one of which, the Tama New Town Shop (in Hachioji-shi, Tokyo) will be opened on April, 29.
There are still some uncertain factors due to the disaster itself, the rolling blackouts, etc., and the opening of new shops planned this term may fall behind schedule.
- It seems that Skype and Twitter arouse considerable interest in the society. Does PC DEPOT plan to answer these newly emerging needs?
- It seems that the use of the Internet for gathering information regarding the disaster and confirming the safety of the family and friends is getting more and more attention in the society, resulting in the discovery of new merits of the media.
To answer this new trend, in addition to technical service and support we have always offered for personal computers, PC DEPOT now also provides services enabling users to use smartphones and other similar devices more conveniently, and plans to further expand the service lineup to include such services as setting up Skype and Twitter for the users.
- What is the situation with customer traffic in April?
- Although there has been some impact due to shortening of the business hours accompanying rolling blackouts and power saving, the number of customers coming to the shops is gradually increasing.
- Was there any serious damage caused by the earthquake?
Firstly we would like to express our deepest condolences to the victims of the recent Pacific Coast of Tohoku Earthquake. Our company has confirmed that, luckily, none of our company employees were injured and everyone is safe and sound. Although there have been temporary closures for one to three days at some shops, and business hours were shortened due to rolling blackouts, at present, all our directly managed shops are operating. One of the franchise shops in Fukushima Prefecture is at present (March, 23) closed until further notice.
The situation being such as it is we are giving priority to customers of the regions that have suffered from the disaster most by the following measures:
We are thus actively supporting restoration of personal computers and Internet connection, which together constitute the very lifeline for those living in the areas stricken by the disaster and for other people involved.
- - Giving discounts on certain products for the victims
- - Giving special discounts / preferential treatment and offering emergency measures and repairs for personal computers, which were damaged during the disaster
- - To those victims of the disaster, who are subscribed members of our company's support services,and who have either lost their supported products or had some damage happen to them,we offer substitutive goods free of charge, as well as free repair and restoration services.
(For details please refer to 'Company's Measures regarding Current Disaster'(newspaper insert issued March, 19))
Click 'here' for the notice regarding business hours, etc. of our shops under the effects of the Pacific Coast of Tohoku Earthquake. (Japanese Only)
- What is the extent of the impact of rolling blackouts?
- There are certain opportunity losses due to the shortening of business hours resulting from earlier closing times, which were introduced by our Company as a power saving measure, and also due to temporary closing of shops at the time of power cuts. Also, since our shops are located in suburbs, there may be some impact of the fact that people are refraining from going out by cars under the impact of shortened gasoline supply.
At present, since the extent of the impact these issues will have on the business is not clear and it is too early to predict whether they should protract over a long period of time or not, we shall make further announcements as soon as we have the information.
- Have there been any aspects affected by Intel chipset failures?
- New personal computer sales were scheduled to take place from January. However, among these new models, the start of sales for some high-performance models was postponed.
Therefore, we assume that chipset failures have caused some problems with respect to shipments on the side of computer makers.
- What are your outlooks for the computer market from now on?
As of the third quarter of fiscal year 2010, the number of personal computers sold and the amount of the sales has been better than the previous year. As for 2011, we are expecting a growing number of products that can be connected to the Internet such as smart phones. It is not expected that growth in computer sales will be as great as it has been in the current year.
However, given the popularity of individual-use smart phones and other Internet-connectable devices, it will be necessary to use personal computers in order to store data and install various software applications. As a result, it is anticipated that any drop in personal computer sales will be just temporary.
- How do you estimate the demand and profitability for your technical service targeted at smartphones?
- We think this service is profitable. Our company already has the resources of personnel and equipment, etc. of "PC Clinic," which specializes in technical services and support, and so it is possible to reduce the costs for additional large-scale investments and training.
We also estimate that the demand is high, and expect that smartphones will become popular among a broad range of people. Accordingly, our new technical services targeted at smartphones and the connections with PCs will increase.
For the information on full-scale technical services and support for smartphones, please see the news release for Jan 21, 2011. (Japanese only)
- Is the high-speed mobile communication service beneficial for PC DEPOT?
- The next-generation communication called LTE has been started by some communications companies. Its high-speed communication is comparable to broadband communications, and so mobile terminals will become able to communicate at the same level as the network of the broadband and PCs.
If its communication area expands and compatible products increase, the demand for the access to the Internet will increase, and so this would be beneficial for our company.
- Does PC DEPOT handle electronic books?
- Electronic books can be linked to the Internet, and so we handle them.
For our policy for products, please see "Do you handle newly-released smartphones and tablet PCs?" dated Oct. 2010.