Gokurakuyu Holdings

Basic Information

Stock Code
2340
Industry
Services
Category Detail
Leisure & Recreation Facilities
Prefecture
Tokyo
Establishment Year
April 1980
Listing Year
November 2002
Official Website
https://www.gokurakuyu-holdings.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
Tabio, Econac Holdings, INEST, Daiichi Kosho

Overview

Gokurakuyu Holdings is a leading service company founded in 1980, centered on super sento public baths and expanding nationwide, operating a variety of bathing facilities through direct management and franchises.

Current Situation

Gokurakuyu Holdings recorded consolidated sales of approximately 12.8 billion yen and operating profit of approximately 40 million yen in the fiscal year ended March 2023, operating 28 directly managed super sento stores and multiple franchise stores domestically. It is also expanding overseas, including in China, and advancing multifaceted operations of bathing facilities. Food and beverage and event businesses are performing well, centered on directly managed stores, and it has established a marketing subsidiary within the group to focus on improving customer attraction. In the past, it faced issues such as aging equipment and scandals, but is implementing improvement measures and working on performance recovery. In the future, it aims to expand market share through digitalization of stores, development of new business formats, and new store openings. It is promoting regional contributions and environmental measures for sustainable business operations and focusing on expanding services to diverse customer segments.

Trivia

Interesting Facts

  • 53 stores nationwide combining direct and FC operations (as of May 2024)
  • Opened first overseas store in Shanghai, China in 2013
  • One of Japan's largest super sento chains
  • Opened new format 'RAKU SPA Tsurumi' in Kanagawa in 2014
  • Attracted social attention due to past sewage fee fraud issue
  • Transitioned to holding company structure in 2017 and implemented business division
  • Provided in-facility service discounts for membership card users (discontinued)
  • Expanding 'RAKU CAFE' restaurants to improve customer satisfaction
  • Aggressively opening stores in tourist areas nationwide, strengthening community strategy
  • Focusing on digital marketing in recent years to boost customer attraction

Hidden Connections

  • Keio Group operates tourist area stores via franchise
  • Soft99 Group subsidiary Asmo operates some FC stores
  • Subsidiary marketing company supports group customer attraction
  • In 2010, established joint venture with Merchant Bankers and Hong Kong firm
  • Asahi Breweries and Sumitomo Mitsui Bank among major shareholders
  • Head office in Kojimachi, Chiyoda-ku, Tokyo, located in historic commercial district
  • Diversifying bathing-related products through OEM and wholesale
  • Focuses on facility beautification at bathing sites, contributing to regional image improvement

Future Outlook

Growth Drivers

  • Expansion into depopulating areas and strengthened community focus
  • Increased bathing demand from rising health consciousness
  • Service innovation leveraging digital technology
  • Further enhancement of customer draw at tourist stores
  • Brand strengthening through environmentally considerate operations
  • Synergy creation with events and food/beverage businesses
  • Profit improvement through selective overseas market focus
  • Sales base expansion via diverse customer segments
  • Further rollout of franchise model
  • Improved management efficiency through energy-saving and environmental measures
  • Service quality improvement through employee development
  • Revenue diversification in new business areas

Strategic Goals

  • Expand directly managed stores to over 50 in Japan
  • Strengthen and expand franchise store quality management
  • Reduce CO2 emissions by 50% compared to 2019
  • Maintain and improve customer satisfaction above 90%
  • Achieve social contributions through strengthened regional community collaboration
  • Achieve over 80% digital service adoption rate
  • Increase sales ratio of food/beverage and merchandise to 20%
  • Improve overseas business profitability and strategic expansion
  • Build sustainable operations foundation
  • Maximize human resources through diverse hiring and development

Business Segments

Facility Operation Support

Overview
Provides operation support for franchises, local governments, and tourist facilities.
Competitiveness
Extensive store operation know-how and marketing capabilities
Customers
  • Franchise加盟 stores
  • Local governments
  • Tourist facility operators
  • Resort operators
Products
  • Store planning support
  • Operation system provision
  • Marketing services
  • Staff training programs

Event Planning and Production

Overview
Handles event planning, production, and EC site operations.
Competitiveness
Multifaceted promotion capabilities and planning skills
Customers
  • Bathing facilities
  • Local commercial facilities
  • Local governments
  • Corporate event organizers
Products
  • Theme-based event planning
  • Customer attraction promotions
  • EC site planning and operation
  • Product planning and wholesale sales

Bathing-Related Product Planning, Manufacturing, and Sales

Overview
Supply of proprietary brand products and OEM-manufactured bathing-related goods.
Competitiveness
Product development capabilities based on facility operation experience
Customers
  • Bathing facility operators
  • Retailers
  • EC shop operators
  • Franchise加盟 stores
Products
  • Bath additives
  • Towels
  • Amenity products
  • Lifestyle goods

Food and Beverage Service Provision

Overview
Planning and operation of in-facility and external food and beverage services.
Competitiveness
Diverse menu rollout capturing customer needs
Customers
  • In-bathing facility restaurants
  • Event operators
  • Local commercial facilities
  • Food service providers
Products
  • Restaurant operation support
  • Cafe chain expansion
  • Menu development
  • Ingredient procurement and wholesale sales

Marketing Support

Overview
Deploys marketing support services centered on group companies.
Competitiveness
Effective customer attraction support through multi-channel deployment
Customers
  • Corporate ad agencies
  • Retail companies
  • Online mail-order businesses
  • Bathing-related businesses
Products
  • Digital marketing
  • Promotion campaign planning
  • SNS promotions
  • Brand operation support

Competitive Advantage

Strengths

  • Nationwide network of direct and franchise operations
  • Deployment power of diverse bathing brands
  • Operation know-how from years of industry experience
  • Comprehensive facility equipment and food/beverage linkage
  • Community-focused store strategy
  • Aggressive overseas market expansion
  • In-group marketing capabilities
  • Adaptability to wide customer segments
  • Risk diversification through multifaceted businesses
  • Solid financial base
  • High brand recognition
  • Scale advantages from large number of stores
  • Thorough quality control via direct stores
  • Expanding membership services
  • Improved customer satisfaction through in-facility event planning

Competitive Advantages

  • Flexible business model combining direct and FC operations
  • Differentiated stores with natural hot springs and diverse equipment
  • Store opening strategy focused on communities and tourist areas
  • Promotional strengthening by in-group marketing company
  • Smooth overseas entry and local deployment
  • Customer retention through linked food/beverage and product sales
  • Enhanced customer draw via event planning
  • Maintained service quality through employee training and operation support
  • Customer segment expansion via wide price range products/services
  • Equipment investment and store renovations leveraging capital
  • Repeat visits promoted by membership cards and point services
  • Compliance thoroughness for legal adherence and trust recovery
  • Enhanced recognition and brand value through multi-store rollout
  • Flexibility in business structure and rapid market response
  • Service development aligned with customer health trends

Threats

  • Impact of infectious diseases such as COVID-19
  • Intense price competition from rivals
  • Rising renewal costs from equipment aging
  • Diverse customer needs by region
  • Increased operating costs from stricter environmental regulations
  • Challenges in franchise store management
  • Political and economic risks in foreign markets
  • Declining operation efficiency from labor shortages
  • Shifts in consumer leisure preferences
  • Store damage risks from natural disasters
  • Reputation damage risks from regulatory violations
  • Consumption slowdown from economic fluctuations

Innovations

2023: Establishment of GK Marketing Co., Ltd.

Overview
Established a new subsidiary to strengthen event planning and EC site operations.
Impact
Contributes to improved customer attraction and new revenue sources.

2020: Initiation of Digital System Introduction for Facility Operation Efficiency

Overview
Introduced IT systems for store operation management to improve efficiency.
Impact
Achieved improved sales efficiency and cost reductions.

2024: Enhanced Renovation of Bathing Facilities

Overview
Refreshed equipment and services at existing stores to boost competitiveness.
Impact
Leads to higher customer satisfaction and increased foot traffic at facilities.

2022: Restructuring and Consolidation of China Market Operations

Overview
Reorganized business by excluding some China operations from consolidation for efficiency.
Impact
Concentrates management resources on domestic business for financial health.

2021: Enhanced COVID-19 Infection Control Measures

Overview
Implemented thorough infection prevention across all stores to provide safe usage environment.
Impact
Supports user peace of mind and business continuity.

Sustainability

  • Promotion of environmental conservation activities in collaboration with local communities
  • CO2 emission reductions through energy-saving equipment introduction
  • Efforts to reduce waste and promote recycling
  • Strengthened safety and health management and employee training
  • Active participation in local economic revitalization