Uniqlo operator Fast Retailing sees strong rebound this year

TOKYO (AFP) – Uniqlo’s parent company Fast Retailing said yesterday it expects a stronger rebound in full-year operating profit driven by a solid performance in East Asian countries hit less hard by virus lockdowns.

The Japanese clothing empire forecast 2020/21 operating profit of JPY255 billion (USD2.3 billion) – up slightly from its previous estimate of JPY245 billion.

That marks a rise of 70.7 per cent from the year before, when business began to be hit worldwide by the COVID-19 pandemic with many shops forced to close for extended periods.

In the first six months of this financial year, Fast Retailing logged a 0.5 per cent dip in revenue year-on-year to JPY1,202.8 billion.

But operating profit in the same period was up 22.9 per cent from 2019/20 at JPY167.9 billion.

“Performance in most regions of Uniqlo International, as well as within Global Brands, reported declines in revenue and profits due to the severe impact of Covid-19,” the firm said in a statement.

Pedestrians walk past a Uniqlo clothing store operated by Japan’s Fast Retailing in Tokyo. PHOTO: AFP

“However, a strong rise in profit at Uniqlo Japan and in the Uniqlo Greater China region, both of which saw a more limited impact from the pandemic, contributed to the increase in group consolidated profit.”

After years of aggressive expansion, Fast Retailing is vying to be the world’s most valuable clothing firm, challenging Spanish fast-fashion giant Inditex – which owns Zara – for the top spot.

Earlier this year the Japanese group’s market capitalisation overtook that of Inditex for the first time, but it has since fallen back behind.

Fast Retailing said yesterday it would continue to open new stores and expects to have 2,337 Uniqlo stores worldwide by the end of August, of which 813 will be in Japan.

The group also owns fashion retailer Theory and French brands Comptoir des Cotonniers and Princesse Tam Tam.

At a press conference, Fast Retailing’s billionaire founder Tadashi Yanai was asked about the group’s stance on using cotton from far western Chinese region.

H&M and other fashion brands have been pilloried in China for statements voicing concern about allegations of forced labour in cotton fields.

“Of course, we take a close interest in all factories or production of cotton. If we find such problems, we will immediately terminate our business transactions,” Yanai said.

“But beyond that, it becomes a political issue rather than a human rights issue. So, no comment.”