LEIFRAS Partners with HR Produce, Leveraging Over 10,000 Childcare Facilities to Expand into the Pre-School Market

LEIFRAS CO., LTD. (Nasdaq: LFS), a company that operates children's sports schools and supports the regional expansion of school club activities (Head Office: Shibuya-ku, Tokyo; CEO: Kiyotaka Ito), has entered into a sales agency agreement with HR Produce Co., Ltd. (Head Office: Shibuya-ku, Tokyo; Representative Director: Kimitaka Kitamura), a company with expertise in human resources and organizational consulting in the childcare sector, to strengthen its approach to the pre-school market. Leveraging HR Produce's extensive network of 3,337 corporations and 10,259 childcare facilities, LEIFRAS will deploy its non-cognitive skills assessment system 'Mirabo' and sports schools to address the childcare industry's operational challenges and support the healthy development of pre-school children.

1. Background of the Partnership: Addressing Industry Challenges of 'High Staff Turnover and Recruitment Difficulties' and 'Differentiation from Other Facilities'

The current childcare industry faces a 'vicious cycle' of high staff turnover (approximately 25%) and rising recruitment costs. There is an urgent need to improve staff retention through investment in human capital, rather than simply replacing labor. At the same time, in the context of declining birth rates, childcare facilities are required to create added value to become a facility that parents 'choose.' To address these industry challenges, LEIFRAS, with its expertise in fostering non-cognitive skills through sports, has partnered with HR Produce, which has supported human resource and organizational development at childcare sites.

2. About the Strong Partner: HR Produce Co., Ltd.

HR Produce Co., Ltd. (formerly Women's Active Company), a powerful sales partner for LEIFRAS, advocates for 'a society where all working people can thrive' and has established solid achievements and credibility in the childcare industry.

Endorsed by the Government and Investment Institutions: Certified as an 'Excellent Job Placement Service Provider' under a project commissioned by the Ministry of Health, Labour and Welfare. Additionally, it has received investment from a growth investment fund operated by WM Partners and the Development Bank of Japan (DBJ), demonstrating a strong financial foundation.

On-Site Consultative Expertise: Beyond mere job placement, the company excels in hands-on, accompanying consulting that enhances organizational strength, building deep trust and a robust network with childcare facilities nationwide.

3. Services to be Deployed to Childcare Facilities and Their Benefits

Through HR Produce, LEIFRAS will deploy the following services, which benefit both the management and staff of childcare facilities:

① Introduction of 'Mirabo,' a Non-Cognitive Skills Assessment System that Visualizes Early Childhood Development

A proprietary system that quantifies children's non-cognitive abilities (such as greeting, leadership, and cooperation), which cannot be measured by academic tests, into objective data.

[Benefits for Facilities and Caregivers] Support for Parent Communication and Improved Work Environment

Provides intuitive individual and group reports using imagery like 'a seed blooming into a flower' and radar charts. Even less experienced staff can confidently communicate with parents based on objective data. By reducing psychological burdens on staff and supporting the creation of a 'work-friendly environment,' this contributes to improved recruitment competitiveness and staff retention rates.

[Benefits for Facility Management] Enhanced Added Value for Becoming a 'Chosen Facility'

Supports the establishment of brand value as a facility that 'scientifically nurtures non-cognitive skills.' By increasing parents' sense of security and persuasiveness, it creates opportunities for positive word-of-mouth, contributing to differentiation and unique value creation compared to other facilities.

② Opening of 'LEIFRAS Sports Schools' as a New Added Value for Facilities

Utilizing underused spaces within childcare facilities, such as playgrounds, halls, and classrooms (available from half a basketball court size), LEIFRAS will open sports schools operated by its instructors.

Choice from 13 Specialized Programs: Offers optimal programs tailored to each facility's needs, including soccer and basketball, as well as multi-sport programs for young children like 'JJMIX,' dance, and karate.

High Efficiency and Safety with 'Zero Commuting Burden' Extracurriculars: As dual-income households increase, the 'time and physical burden of commuting' for weekday extracurricular activities has become a significant concern for parents. Since our school operates entirely within the familiar childcare facility, parents can completely eliminate commuting effort (travel and waiting time), effectively using the freed-up time for family bonding. For children, there is also the immense benefit of being able to relax and receive professional sports instruction in a safe, secure, and familiar environment alongside their friends.

▶ Example of Mirabo Analysis Results

4. Future Outlook

Starting with this partnership, LEIFRAS will intensify its approach to the pre-school market. By combining the expertise of both companies, we aim to fundamentally solve the challenges facing the childcare industry and build a sustainable educational ecosystem where children can nurture 'physical strength in their hearts.'

Overview of Partner Company

Company Name: HR Produce Co., Ltd.

Address: 2nd Floor, Building 8 SY, 6-23-2 Jingumae, Shibuya-ku, Tokyo

Representative: Representative Director Kimitaka Kitamura

[Company Overview: LEIFRAS CO., LTD.]

Company Name: LEIFRAS CO., LTD.

Listed Market: Nasdaq Capital Market

Ticker (U.S. Security Code): LFS

Address: 20th Floor, Ebisu Garden Place Tower, 4-20-3 Ebisu, Shibuya-ku, Tokyo

Representative: CEO Representative Director Kiyotaka Ito

Established: August 28, 2001

Capital: 784,666,480 JPY (including capital reserves)

Business Activities: Sports School Business, Event Business, Alliance Business, After-School Club Support Business, Regional Co-Creation Business, Healthcare Business, After-School Day Service Business

Website: https://www.leifras.co.jp/

IR Site: https://ir.leifras.co.jp/jp/

[Inquiries Regarding This Matter]

For details on this matter or media inquiries, please contact the following:

For General Customers and Companies

LEIFRAS CO., LTD. Inquiry Form

https://leifras.co.jp/contact/form/

HR Produce Co., Ltd. Contact

TEL: 03-6407-0027

Email: yoshida@hr-produce.jp

For Media Professionals

LEIFRAS CO., LTD. Public Relations Department

Email: pr_@leifras.co.jp

TEL: 03-6451-1343

FAX: 03-6451-1342