Strengthening Business Model Amidst Increased Revenue and Decreased Profit; Providing 100,000 Orders and 2.6 Million Units Annually; Accelerating Growth with Generative AI in the Next Term

Focus Inc. (Kofu City, Yamanashi Prefecture), which handles e-commerce sales and production of original wear and goods, operates the original goods production site "CLAT-JAPAN" and has announced its financial results for the fiscal year ending December 2025. Sales for FY2025 were approximately 3.735 billion JPY, an increase of approximately 434.4 million JPY compared to the previous year. On the other hand, expenses increased due to investments in advertising, measures to improve customer lifetime value (LTV), and initiatives to strengthen the production system, resulting in a decrease in profit.

However, the gross profit margin improved to 46.7%, and both CVR (conversion rate) and repeat rates also increased. For FY2026, we will further accelerate the utilization of generative AI, aiming to achieve both improved customer satisfaction and profitability.

Image: Scene of creating customer's design

Gross Profit Margin Improved to 46.7%; CVR (Conversion Rate) and Repeat Rate Also Increased

In FY2025, by continuously promoting product and service differentiation and maintaining a high CVR (conversion rate), sales reached approximately 3.735 billion JPY (an increase of 434.4 million JPY year-on-year), resulting in increased revenue. The annual number of orders reached approximately 100,000, and the number of units delivered was approximately 2.6 million. However, the sales target of 3.95 billion JPY set at the beginning of the fiscal year was not met.

From a business model perspective, however, the gross profit margin improved from 43.5% in the previous period to 46.7% in the current period, and both CVR and repeat rates also improved. This indicates steady progress in strengthening customer satisfaction and loyalty.

Profit Decrease Due to One-Time Investments, But System Strengthening is Advancing

The background to not meeting the target was a decrease in site access due to fluctuations in search rankings. To compensate for the decrease in access, advertising expenses increased, with an additional investment of approximately 156 million JPY. In addition, a free sample provision initiative was implemented to improve CVR and new customer loyalty. This was an effort aimed at improving customer lifetime value (LTV), but it resulted in significant short-term losses, leading to an increase in expenses of approximately 100 million JPY.

Furthermore, as we promoted in-house production and expanded production bases in line with business expansion, we conducted recruitment activities aimed at strengthening our production management system. However, the creation of effects from recruitment investments did not reach the initially assumed level, and scout-related expenses of approximately 80 million JPY ultimately became a direct loss factor. It should be noted that these losses from the free sample initiative and recruitment investments were both one-time factors specific to the current period and have now been resolved.

Going forward, we will continue to balance improving customer value and profitability while rapidly verifying the effectiveness of each measure.

Full-Scale Utilization of Generative AI to Improve Profitability and Customer Experience

In FY2026, we are fully advancing the utilization of generative AI in each operational process. In particular, we are introducing generative AI in the initial design creation process after receiving design data from customers, thereby reducing design creation costs that were traditionally dependent on external parties. This not only leads to cost reduction but also improves response speed and stabilizes proposal quality. Currently, we are building a system that is expected to improve the gross profit margin by approximately 1.5 to 2.0 points. In terms of customer acquisition, in addition to traditional SEO measures, we are also working on site optimization for the AI era (LLMO). By improving the structure to be appropriately evaluated not only by search engines but also by information references from generative AI, we aim to strengthen our medium to long-term traffic base. Furthermore, to prevent the one-time losses that occurred in the previous period, we are thoroughly monitoring expenditures weekly and establishing a management system that can quickly verify the return on investment. Through these initiatives, we aim to achieve sales of approximately 4 billion JPY and ordinary profit of approximately 250 million JPY in FY2026.

【About Focus Inc.】

Focus Inc. prints and embroiders original designs on existing T-shirts, bags, towels, and caps for event staff, merchandise, and corporate/store uniforms, selling them primarily through e-commerce.

What we value most is that our customers' important days are successful and become the best memories.

For original goods production, there are prerequisites such as "design must be decided before proceeding" and "sufficient time is required for delivery," which can make it difficult for customers to place an order just with the desire to create.

However, we believe that the customer's desire to "create" should be the starting point.

Therefore, for customers who find it difficult to visualize their ideas, we work with them as their representative to create designs. We offer design creation for 0 JPY and unlimited revisions.