Fast Retailing Gains Despite Uniqlo’s Weakness at Home
The company reported declines in its Uniqlo Japan business.
By Evan Clark on July 11, 2019
Fast Retailing has long lived up to its name, but when it comes to third-quarter growth for the flagship Uniqlo nameplate, it’s the Greater China and Southeast Asia businesses that are really on the move.
However, the fast-fashion chain saw sales decline at home and continues to post losses in the U.S.
Uniqlo Japan revenues slipped 0.5 percent to 209.7 billion yen, or $1.93 billion, for the quarter ended May 31 as an anniversary was shifted into June. The division also saw its gross profit margin contract 0.3 percent after it “started running down excess inventory earlier than usual.”
Losses in the U.S. were reduced in the quarter, but the company said “overall performance was weaker than expected.” The retailer also saw profits decline in Europe and South Korea while the Greater China and the Southeast Asia and Oceania businesses reported double-digit gains on the top and bottom lines.
The company said Greater China and Southeast Asia “are entering a new stage of growth as key drivers of operational expansion.”
Overall, Uniqlo’s international business saw sales increase 15.3 percent to 240.5 billion yen as operating profits increased 14.9 percent to 36.3 billion yen.
For the nine months ended May 21, Fast Retailing Co. Ltd.’s total revenues rose 7 percent to 1.8228 trillion yen while operating profits gained 3.7 percent to 247.6 billion yen.
Fast Retailing is led by president, chief executive officer and chairman Tadashi Yanai, who is known for his expansive vision and methodical growth, characteristics that course through the company’s culture.
In its update, Fast Retailing said: “The group’s medium-term vision is to become the world’s number-one apparel retailer. In pursuit of this aim, we are focusing our efforts on expanding Uniqlo International as well as our GU casual fashion brand and our global e-commerce operation.”
Like much of the rest of retail, Fast Retailing has been focusing in on the issue of sustainability, a topic it approaches with the message of “Unlocking the power of clothing.”
“Fast Retailing aims to contribute to the sustainable development of global society through our core clothing business,” the company said. “Fast Retailing’s sustainability activities seek to promote human rights, environmental protection and broader social contributions within six clear material areas: create new value through products and services; respect human rights in our supply chain; respect the environment; strengthen communities; support employee fulfillment, and, corporate governance.”