Yoshitsu Co., Ltd.’s Subsidiary REIWATAKIYA LV LLC Enters into a Lease Agreement with Fashion Show Mall LLC to Expand Market Presence in the U.S. Market
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Insights
The strategic expansion of Yoshitsu Co., Ltd into the U.S. market, specifically into a high-traffic area like the Las Vegas Strip, signals an aggressive push to capture a share of the American consumer base. This move is indicative of the company's commitment to international growth and can be expected to have a positive impact on their market presence and brand recognition. The choice of location within a prominent shopping center such as Fashion Show Las Vegas is a calculated decision, likely based on thorough market research indicating a demand for Japanese beauty and health products among consumers in the area.
Furthermore, the expansion into the U.S. market may diversify the company's revenue streams and reduce its dependence on its current markets in Hong Kong, mainland China, Japan, North America and the United Kingdom. This could potentially mitigate risks associated with market volatility in any single region. However, it is essential to monitor how the new store's performance aligns with initial projections, as the retail sector is highly competitive, especially in a destination like Las Vegas, known for its transient consumer base and high rental costs.
From a financial perspective, the lease agreement for a new store location represents a significant long-term investment for Yoshitsu. With the lease term set until September 30, 2029, Yoshitsu is demonstrating confidence in its ability to establish and grow its U.S. operations over a period of more than five years. The initial costs associated with this expansion, including lease expenses, store setup and operational costs, will impact the company's short-term cash flow. However, if the store achieves its projected sales targets, it could contribute positively to Yoshitsu's overall profitability.
Investors should consider the potential increase in operational leverage that comes with such an expansion. While it can lead to higher returns on investment, it also increases the fixed cost base, which could amplify losses if the store underperforms. It will be crucial to assess Yoshitsu's quarterly financial results following the store opening to gauge the success of this strategic move.
The retail industry, particularly in a vibrant city like Las Vegas, requires a nuanced understanding of consumer behavior and the ability to adapt quickly to trends. Yoshitsu's emphasis on introducing a diverse range of Japanese products is a strategic move that leverages the growing interest in Asian beauty and health products in the U.S. The store's focus on cosmetics, fragrances, health and beauty products and body care items caters to a market segment that has shown resilience and growth, even during economic downturns.
The decision to operate within the Fashion Show shopping center, a destination that attracts both tourists and locals, could provide Yoshitsu with high visibility and foot traffic. However, success in this market is not guaranteed, given the intense competition with established U.S. and international brands. Yoshitsu will need to invest in marketing and customer experience to differentiate itself and build a loyal customer base. The long-term success of their U.S. operations will likely depend on their ability to localize their offerings and resonate with American consumers' preferences.
Tokyo, Japan, March 05, 2024 (GLOBE NEWSWIRE) -- Yoshitsu Co., Ltd (“Yoshitsu” or the “Company”) (Nasdaq: TKLF), a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom, today announced that the Company, through its subsidiary, REIWATAKIYA LV LLC, a Nevada limited liability company, entered into a lease agreement (the "Lease") on February 21, 2024 with Fashion Show Mall LLC, a Delaware limited liability company, to lease a premise for its new store located in Fashion Show Las Vegas (“Fashion Show”), a shopping, dining and entertainment destination on the Las Vegas Strip. The move is expected to expand the Company’s operational network in the U.S. market and strengthen its market presence.
Pursuant to the Lease, the leased premise is located at Space No.2015 of the Fashion Show shopping center in the City of Las Vegas, County of Clark, State of Nevada, U.S.A., covering a floor area of approximately 2,328 square feet. The lease term will expire on September 30, 2029, during which a REIWATAKIYA store engaged in the retail of cosmetics, fragrances, health and beauty products, body care products, and other such related products and services is expected to be in operation. The official opening date of the store is scheduled to be October 1, 2024.
Mr. Mei Kanayama, the Principal Executive Officer of Yoshitsu, commented, “We are excited to share with you the upcoming opening of our new Las Vegas store, a significant step made possible through our recent Lease with Fashion Show Mall LLC. We believe that this step is a key part of our ongoing efforts to broaden the scope of our business and enhance our brand awareness in the U.S. By establishing a presence in the Fashion Show shopping center, we aim to introduce a diverse range of top-quality Japanese products to cater to the varied needs of Las Vegas consumers. As we move forward, our focus will be on adapting and expanding our product range to better serve the local market and on establishing a solid foundation for additional U.S. locations. We are optimistic that this international expansion will inject new energy into our growth and development.”
About Yoshitsu Co., Ltd
Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom. The Company offers various beauty products (including cosmetics, skincare, fragrance, and body care products), health products (including over-the-counter drugs, nutritional supplements, and medical supplies and devices), sundry products (including home goods), luxury products (including branded watches, perfume, handbags, clothes, and jewelry), electronic products (including entertainment gaming products), and other products (including food and alcoholic beverages). The Company currently sells its products through directly-operated physical stores, through online stores, and to franchise stores and wholesale customers. For more information, please visit the Company's website at https://www.ystbek.co.jp/irlibrary/.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. In addition, there is uncertainty about the further spread of the COVID-19 virus, or the occurrence of another wave of cases, and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains, and economic activity in general. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.
For more information, please contact:
Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp
Ascent Investor Relations LLC
Tina Xiao
President
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
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