In fiscal 2019, our earnings increased thanks to strong performance among group companies. However, operating revenue and income both fell short of the targets, primarily because the coronavirus crisis undercut takings in our domestic department stores.
Our domestic department stores face a number of challenges. Some of the challenges involve external factors, such as the shrinking market. Others are structural, such as bloated sales costs. Addressing these challenges is an urgent task. To generate stable profits and achieve sustainable growth, we must focus on a program of cost-optimization that will boost the profitability of our department stores—the source of our brand value—and thus ensure the solid financial footing. That’s why we have decided to put aside our five-year long-term plan and bring in an emergency three-year plan. Under this emergency plan, we will share our goals and targets with the market and act flexibly and adaptively to changing business conditions.
With no end in sight to the coronavirus crisis, we are unable to give reasonable forecasts for fiscal 2020 or precise details about our emergency plan. We will update you without delay as soon as we get a clearer picture.
Regarding our capital strategy, we will pursue a dynamic financial strategy, emphasizing fiscal health, tight bank relations, and the creditworthiness necessary to access finance flexibly. We will also keep ample short-term liquidity for emergencies. With such a strategy, we should be able to weather any financial storm.
We also want to press ahead with our ESG strategy to contribute toward a sustainable future. Our ESG strategy identifies sustainable development challenges in seven areas, including environment, energy, and merchandise. These challenges will be kept keenly in mind as we conduct our business activities. We will work with government, communities, and trading partners on both short-term and medium- to long-term measures for addressing the challenges.
In March this year, we merged two of our financial companies to found Takashimaya Financial Partners. We aim to strengthen and expand our finance business, making use of our customer base in the department store business. Starting from the credit card business, we will work with partners in the finance industry to develop expansive lineup of customer-oriented services, including asset building and asset management services.
Thank you for your continued support and patronage, and I hope that you and your loved ones are staying healthy and safe in these challenging times.
Yoshio Murata, President