Review of the current period

We reviewed the structure of production and considered this a revolutionary period for the next stage of growth.

This year is one of deepening political and economic confusion around the world. SHIMA SEIKI was forced to operate its businesses against a very severe headwind for global companies that consisted of confusion about the tariff policy enacted by the Trump administration in the United States, increasing costs arising from growing tension in the Middle East, and restrictions on oversea travel and consideration for safety. In the main markets, particularly in China, the careful stance for capital investments spread throughout the entire industry. Consequently, this had a significant impact on the environment surrounding the company.
Under such an environment, SHIMA SEIKI reviewed the structure of production and considered this a revolutionary period for the next stage of growth. We reviewed the conventional system centering on insourcing and expanded outsourcing while working toward new product development with the aim of balancing high quality with cost reductions. For the process described above, we faced the difficulty of sharing the quality control procedures with external partners based on Aunno Kokyu (delicate coordination), which had been developed internally. Partially because of this, it took longer than estimated to build the mass production line. Consequently, the market launch of cost-effective models, which are strategic products, was delayed.
On the other hand, the company achieved steady progress toward future growth, including partnerships with global companies and organizational reform. The collaboration with CLO, the South Korean 3D fashion system company, has started, and this helped us increase our advantage in the global markets for rendering simulation technology for knitting, which is one of our strengths. The cooperation with Lonati, the major Italian sock knitting machine manufacturer, increased the recognition of our design system. For organizational reform, the computerized cutting machine business is now in full operation as part of the Cutting Solution Division. As a result, the system for immediately sharing and reflecting customer needs is now being built. The building of the foundation for future growth is making steady progress.
As a result of the above, consolidated net sales, operating loss, ordinary income, and net income attributable to owners of the parent amounted to 33,509 million yen (up 3.0% YoY), 1,720 million yen (11,914 million yen for the previous period), 288 million yen (ordinary loss of 11,481 million yen for the previous period), and 856 million yen (net loss attributable to owners of the parent of 14,275 million yen for the previous period), respectively.

Prospects for the future

To make proposals for valuable manufacturing realized only by SHIMA SEIKI to the global markets once again.

We would like to make the sixty sixth term (FY 2027/3) a year when the implemented reforms lead to results. We will combine the knitting technology developed for many years, including Wholegarment® technology, the design system, and the global network to make proposals for valuable manufacturing realized only by SHIMA SEIKI to the global markets once again.
In the flat knitting machine business, the core of the above, the long-awaited, cost-effective models will be fully launched into the markets from the second half of the year. These models will be offered as units not only increasing price competitiveness but also providing the unique value of SHIMA SEIKI of realizing high quality and production efficiency. Knowledge of cost reductions acquired during the development process will be widely applied to all models with the goal of achieving a revenue structure that creates the possibility of winning the competition with other manufacturers. In the design system business, the company will start new AI technology-based initiatives. SHIMA SEIKI expects that the generative AI system now prepared for release will be the next generation platform based on the unique expertise of the company. The SHIMA SEIKI system digitally connects the process from design to production and results in a strong competitive advantage at a time when the clarification of the supply chain is required. We will strengthen brand power, aiming for a world where manufacturing with SHIMA SEIKI knitting machines is recognized as an environmental value through Wholegarment® technology, which generates almost no disposal loss of yarns, in combination with our unique manufacturing system that connects the process from design to production. On the other hand, for market development, we will explore new growth domains, including the Indian market, which has grown significantly, and the Bangladesh market with its increasing need for higher added-value products by seeking the diversification of risk.
The company has grown through a high insourcing rate. To further increase the speed and competitiveness now required in the global markets, SHIMA SEIKI must evolve for new manufacturing that is not an extension of conventional manufacturing. To accelerate such reform on a company-wide basis, a structural reform headquarters has been newly established. We will convert the business structure to be more flexible and resilient by attracting outside experts, cooperating across departments, and reviewing both sides of manufacturing and the organizational structure from the customers’ perspective. To show our strong intention for such challenges, we have additionally set a new global slogan: Passion to Create. Only because of advances in digitalization will we create the future through the unified action of SHIMA SEIKI group employees with partner agencies across the world in consideration of “Passion” generated by humans to increase enterprise value.

To shareholders

We will accelerate the company-wide reforms through the work of the structural reform headquarters to build a resilient business foundation.

We sincerely appreciate the exceptional support of shareholders.
The global situation remains uncertain. For the environment surrounding the fashion industry, there is still a large gap in the market trends among countries and regions. For the next period, the company will accelerate the company-wide reforms through the work of the structural reform headquarters to build a resilient business foundation. Additionally, we will give continuing support for the evolution of the apparel and fashion industry to more sustainable and ideal manufacturing while steadily expanding the business domains in the non-apparel areas of the medical and mobility segments for sustainable growth and better business results.
We hope that shareholders see the reforms and challenges of SHIMA SEIKI from a long-term perspective and give further support to us.