TOKYO — Fast Retailing Co. Ltd. wants to be the biggest around.
Tadashi Yanai, chairman of the firm, said Wednesday that the Japanese apparel company aims to grow its annual sales by more than seven times to 5 trillion yen, or $53.7 billion, by the year 2020. And analysts don’t think the goal is that far-fetched.
“We hope to become the biggest maker and retailer in fashion,” Yanai said during a press conference. “The dream will come true if we can grow our business by at least 20 percent each year.”
Yanai outlined the company’s long-range business plan as its Uniqlo chain reported a 5.6 percent spike in August same-store sales for Japan. The fast-fashion chain said consumers snapped up fall items like 3-D fit jeans and faux leather jackets.
The executive reiterated Fast Retailing is eyeing potential acquisitions, especially in Europe, but said there are few attractive companies on the market right now. Even without acquisitions, he said he thinks the company can reach 1 trillion yen, or $10.74 billion, in sales by 2010. Fast Retailing expects to post sales of 682 billion yen, or $7.33 billion, for the fiscal year ending Aug. 31.
In terms of the longer-term 5 trillion yen, or $53.7 billion, target, Yanai said he expects 3 trillion yen, or $32.2 billion, will come from Uniqlo’s business abroad. Uniqlo’s operations in Japan and Fast Retailing’s other brands, which include low-cost chain G.U., lingerie label Princess Tam Tam and Comptoir des Cotonniers, will generate the remainder.
As of June 30, Fast operated 867 stores, 777 of them in Japan.
As for Uniqlo, which will unveil its first collection by German designer Jil Sander in early October, there are many store openings on the horizon. An almost 25,000-square-foot flagship in Ginza will open Oct. 2. Stores in Nagoya, Osaka and elsewhere in Tokyo are also in the works. In 2010, Uniqlo will open its first global flagships in Shanghai and Moscow.
“If anyone can achieve these sort of ambitious growth targets — and they are ambitious — I’d put odds on them,” said Dan Gardenswartz, managing director at the Sage Group LLC, an investment banking firm that advises the retail sector.
Should Fast Retailing achieve Yanai’s projected growth, it could become the world’s largest specialty retailer, at least according to comparisons in 2009 dollars. In a study released last month, Sage’s Apparel and Retail Group placed Fast Retailing 12th in revenues during the last 12 months among publicly traded apparel retailers with sales of $6.97 billion.
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