• Home
• About/Contact
• Economic Reports
• Research
• Advertising

• Business
• Economics
• Reports
• Finance
• Marketing
• Politics
• Real Estate
• Services
• Retail
• Tech

Subscribe

Uniqlo, Fast Retailing looking overseas to China, US

A few weeks back, Fast Retailing, the operator of the Uniqlo brand of casual clothing, posted an 8% fall in operating profit for the year ending August 2007. The company, however, has forecasted a 12% rise in sales for the current year.

In October, Fast Retailing saw a 4.2% rise in comps (same store sales figures) over the same month last year. This was the first increase in six months. The firm also announced that the number of visitors to its 637 stores increased by 5.6 percent, a figure that also showed its first rise in six months.

Fast Retailing, however, knows that domestic sales cannot grow forever, not with a declining population and shrinking market. In a recent article in the International Herald Tribune, Tiger Pan Ning, senior vice president and managing director of Uniqlo Hong Kong, put it simply:

Sales growth in Japan is very limited as the population is shrinking. The group is shifting focus to Asia, especially to China, as the booming middle class is driving up spending.

The plan is to open 200 shops in China and Hong Kong, with 80% on the mainland. There are currently five Uniqlo stores located in Hong Kong and ten in mainland China.

At the same time, the firm is still looking to crack the US market. Although the firm failed to make a successful bid for Barneys New York this past summer, it is still seeking to gain a foothold in the US through an acquisition. President Tadashi Yanai told the Financial Times:

The US is a difficult market. But (the Uniqlo flagship store in) New York is going well and there is enormous potential in the US…It is very difficult for us to go to the US and be successful. We are looking to buy a US company and they would help us build a platform.

If successful, Uniqlo will be a groundbreaker indeed, and perhaps establish a trend of Japanese retailers making renewed efforts to build their brands and sell their goods directly overseas, whether it be the US, Europe or China. One is forced to wonder what may happen if Uniqlo is not successful, and what effect that may have on other brands watching to see if a Japanese retailer can catch on overseas in the way US and European retailers have done in Asia. One thing is certain: Tiger Nan Ping knows that a lot of domestic-minded Japanese firms are operating on borrowed time.

Comments

Copyright © 2006-2009 Japan Economy News

Privacy Policy | Disclaimer