Sugi Holdings

Basic Information

Stock Code
7649
Industry
Retail
Category Detail
Specialty Stores & Drugstores
Prefecture
Aichi Prefecture
Establishment Year
March 1982
Listing Year
August 2001
Official Website
https://www.sugi-hd.co.jp/
TSE Information
TSE Information
Yahoo! Finance
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Other Companies
Kawachi Drug, Matsukiyo Cocokara, Welcia, Create SD Holdings, Cosmos Drug, Tsuruha HD, Kusuri no Aoki Holdings, Yakuo-do Holdings, Genky DrugStores, Sundrug

Overview

Sugi Holdings is a major drugstore company founded in 1982, primarily operating in the Chubu, Kansai, and Kanto regions, with a strength in stores equipped with pharmacies.

Current Situation

Sugi Holdings recorded consolidated net sales of approximately 878 billion yen, operating profit of approximately 42.6 billion yen, and net profit of approximately 25.7 billion yen for the fiscal year ending February 2025, establishing a top position in Japan's domestic drugstore industry. The main Sugi Pharmacy brand is actively expanding from the Chubu region to Kansai and Kanto areas, reaching approximately 1,728 stores as of the end of March 2024. It operates many stores with attached pharmacies and focuses on community-based medical and health services. In recent years, it has expanded its business areas through M&A, acquiring companies such as Japan and Iizuka Pharmacy. In overseas operations, it has formed business alliances with drugstore chains in Taiwan and Vietnam, promoting private brand product rollout. It is committed to sustainability, registered with the UN Global Compact, and advancing gender-neutral cosmetics development and environmental initiatives. It has launched the new electronic payment system 'SugiPay' to accelerate digital transformation. While addressing past social issues such as violations of the Act against Unjustifiable Premiums and Misleading Representations and improper inducements reported to the Consumer Affairs Agency, it aims to deepen community-based services and pursue growth through M&A from 2025 onward.

Trivia

Interesting Facts

  • Company name 'Sugi' derives from founder surname 'Sugiura' and cedar tree.
  • Rapid store expansion post-1982 founding via M&A.
  • First 24-hour store introduced in Toyoake City, Aichi Prefecture.
  • Long-term sponsorship of charity program '24-Hour Television'.
  • First Japanese drugstore to launch gender-neutral cosmetics.
  • Established special subsidiary for disability employment promotion.
  • Sugi Card offers points per 100 yen spent with preferential treatment.
  • Supports transportation IC cards and numerous electronic money payments.
  • Past experience with executive fund misappropriation issue.
  • Recent challenge: Approximately 700 million yen additional tax assessment for consumption tax declaration omission.
  • Advancing business expansion into Vietnam and Taiwan markets.
  • Features 'Chibi Maruko-chan' anime as image character.
  • Strengthening community-rooted medical and nursing support services.
  • New logistics center and headquarters located in Owariasahi City, Aichi Prefecture.
  • Corporate creed: 'Kindness, Sincerity, Trust'.

Hidden Connections

  • Sugi Pharmacy and Sugi Yama Pharmacy have no capital ties but share Tokai region base.
  • Former Sugi Medical subsidiary transferred to Simic Holdings.
  • Drew social attention for requesting favors from Nishio City regarding COVID vaccine reservations.
  • Competing with Matsumoto Kiyoshi Holdings while intensifying rivalry through subsidiary acquisitions.
  • Subsidiary Sugi Pharma Systems develops and sells systems for pharmacies.
  • Partnerships with company groups strong in community-based drugstore operations.
  • Founder's son, Katsunori Sugiura, has served as president since 2021.
  • Focused on securing second-largest market share in industry as a Japanese holding company.

Future Outlook

Growth Drivers

  • Expansion of community-based medical services and new pharmacy openings.
  • Aggressive introduction of IT technologies like digital payment services.
  • Differentiation strategy through strengthened private brand development.
  • Expansion of product lineup considering environment and gender diversity.
  • Domestic business and area expansion via M&A.
  • Overseas business expansion and partnership strengthening.
  • Enhancement of nursing care and welfare services for aging society.
  • Strengthened appeal to diverse customer segments.
  • Preparation of government regulation and legal compliance systems.
  • ESG promotion activities supporting sustainable management.
  • Cost optimization through logistics efficiency.
  • Ongoing marketing investments to enhance brand power.

Strategic Goals

  • Over 1,000 stores with attached pharmacies in major nationwide areas.
  • Achieve UN Global Compact goals and aim for ESG leadership.
  • Achieve over 30% of sales from private brand products.
  • Expand overseas business sales to over 10%.
  • Establish industry-leading customer convenience with all payment methods.
  • 50% business efficiency improvement through digitalization.
  • Continuous exceedance of statutory disability employment rate.
  • Store heating and cooling optimization for environmental load reduction.
  • Expansion and transparency enhancement of community contribution activities.
  • Build sustainable procurement and supply chains.

Business Segments

Services for Medical Institutions

Overview
Provides products and services suited for medical and nursing care facilities.
Competitiveness
Integration of pharmacy network with attached dispensing and home nursing business
Customers
  • Pharmacies
  • Clinics
  • Hospitals
  • Nursing Facilities
  • Home Nursing Providers
Products
  • Dispensing Systems
  • Pharmaceutical Wholesale
  • Medical Devices and Equipment
  • Home Nursing Services
  • Nursing Supplies

Wholesale Business

Overview
Achieves stable supply leveraging wide-area distribution network.
Competitiveness
Efficient logistics centers and overseas partnership networks
Customers
  • Other Drugstores
  • Retail Stores
  • Overseas Markets
  • Mail Order Operators
Products
  • Pharmaceuticals
  • Cosmetics
  • Daily Necessities
  • Health Foods

Information Systems Services

Overview
Develops and operates systems for pharmacies.
Competitiveness
Flexible service provision through in-house development
Customers
  • Sugi Pharmacy Group Stores
  • Medical Institutions
Products
  • Systems Development for Pharmacies
  • POS Systems
  • Customer Management Systems

Nursing Care and Welfare Services

Overview
Builds support systems from care management to welfare equipment.
Competitiveness
Community-based approach and unique welfare service rollout
Customers
  • Elderly Facilities
  • Disability Support Facilities
Products
  • Home Care Services
  • Disability Support Business

Overseas Business

Overview
Expands into Asian markets and jointly develops private brand products.
Competitiveness
Market development through partnerships with partner companies
Customers
  • Taiwan Drugstores
  • Vietnam Pharmacies
  • Overseas Wholesalers
Products
  • Private Brand Products
  • Pharmaceutical Wholesale
  • Medical-Related Products

Insurance and Health Support Business

Overview
Offers support services for insurers contributing to health promotion.
Competitiveness
Comprehensive services through Sugi Wellness
Customers
  • Insurers
  • Health Management Operators
Products
  • Data Analysis for Insurers
  • Health Consultation Services

Competitive Advantage

Strengths

  • Community-based network with many stores featuring attached pharmacies
  • Store network expansion through diverse M&A
  • ESG compliance via UN Global Compact registration
  • Introduction of new digital payment systems
  • Rich product categories and private brand rollout
  • Broad sales channel deployment
  • Strong management base centered in the Tokai region
  • Expansion of medical and nursing care businesses
  • Multi-layered customer base from young to elderly
  • Over 8,700 employees
  • Abundant logistics infrastructure and centers
  • Support for diverse payment methods
  • Expansion across wide Kansai, Kanto, and Hokuriku regions
  • Social contribution achievements such as disability employment promotion
  • Community-based charity activities

Competitive Advantages

  • Differentiation through medical services at stores with dispensing functions
  • Regional expansion strengthened by aggressive M&A strategy
  • Development of unique products like private brand 'PriEcla U'
  • Rapid introduction of diverse electronic money and barcode payments
  • Enhanced reliability through UN Global Compact membership
  • Corporate culture proactive in employee and disability hiring
  • Medical system development and linked service provision
  • Efficient delivery via logistics centers across multiple areas
  • Increase in 24-hour community-based stores
  • Customer touchpoints secured through various sales channels
  • Response to customer needs with diverse product lineup
  • Stable management base with second-largest domestic market share
  • Consistent leadership from founding family-centered management
  • Active sponsorship of regional events and public programs
  • Steady overseas market expansion and partnerships

Threats

  • Risk of additional taxation due to undeclared consumption tax exemptions
  • Price competition from intensifying market rivalry
  • Increase in new entrants in community-based store model
  • Digitalization lag as a factor in competitiveness decline
  • Addressing social credibility issues in legal compliance
  • Market environment fluctuations from novel infectious diseases
  • Labor shortages hindering talent acquisition
  • Delays in responding to diversifying consumer needs
  • Challenges in store deployment balance across regions
  • Overseas business risks from exchange rate fluctuations
  • Constraints on pharmaceutical sales from regulatory tightening
  • Competitor acquisitions and alliance strengthening

Innovations

2024: M&A Utilization to Strengthen Pharmacy Business

Overview
Expanded dispensing store rollout through subsidiary acquisition and merger of I&H Co., Ltd.
Impact
Strengthened regional medical support via enhanced dispensing functions

2024: Launch of New Gender-Neutral Cosmetics Brand 'PriEcla U'

Overview
Introduced cosmetics catering to diverse gender identities.
Impact
Sales growth through acquisition of new customer segments

2025: Participation in UN Global Compact

Overview
Registered to strengthen social responsibility and sustainability.
Impact
Improved ESG ratings and stakeholder trust

2025: Launch of Digital Payment 'SugiPay' Service

Overview
Rolled out new customer service compatible with smartphone payments.
Impact
Enhanced convenience and customer retention

2023: Subsidiary Acquisition of Kampo Specialist Pharmacy 'Yakuni Honpo'

Overview
Expanded into traditional medicine field.
Impact
Differentiation through enhanced specialization

2022: Subsidiary Acquires Overseas Wholesale Company

Overview
Brought Taiwan pharmaceutical wholesale under umbrella to accelerate overseas expansion.
Impact
Expansion of overseas revenue base

2021: Business Alliance with Vietnam Drugstore Company

Overview
Promoted product development and supply strengthening in Asian markets.
Impact
Improved brand recognition in overseas markets

2020: Strengthened Private Brand Development Linking Online and Stores

Overview
Diversified new products through enhanced mail-order business collaboration.
Impact
Improved market competitiveness

2023: Strengthened Welfare Business Including Regional Nursing Services

Overview
Continued expansion of home nursing and disability employment promotion.
Impact
Enhanced social evaluation and regional contributions

2024: Trial Promotion of Cashierless In-Store Payments and Digitalization

Overview
Experimental introduction of innovative in-store services.
Impact
Improved customer convenience and labor productivity

Sustainability

  • ESG management strengthening through UN Global Compact registration
  • Development and sales of gender-neutral cosmetics
  • Reduced environmental impact via paper bag usage reduction
  • Promotion of disability employment initiatives
  • Strengthening of regional medical and nursing support
  • Expansion of renewable energy utilization
  • Sales review to reduce waste losses
  • Promotion of sustainable procurement policies
  • Ongoing support for social welfare
  • Introduction of eco-point incentive programs
  • Store heating and cooling energy-saving campaigns
  • Transparent disclosure of environmental and social contribution activities