TOKYO — Fast Retailing Co. Ltd., corporate parent of Uniqlo, said Thursday its first-half net profit rose 55.7 percent to 55.36 billion yen, or $612.84 million at average exchange for the period.
This story first appeared in the April 9, 2010 issue of WWD. Subscribe Today.
The retailer has seen strong performances in key products such as the Neo Leather series, ultralightweight down jackets and the popular HeatTech line of thermalwear. Increasing success of the brand’s stores internationally in locations such as Paris and across Asia also buoyed sales and profits for the period.
Revenue for the six months ended Feb. 28 climbed 31.8 percent to 470.97 billion yen, or $5.21 billion, while operating profit grew 43 percent to 99.89 billion yen, or $1.11 billion.
Fast Retailing has seen its share price fall considerably this week. On Monday, the stock declined nearly 11 percent after the company said last week that Uniqlo’s March comps in Japan fell 16.4 percent. At a press conference in Tokyo on Thursday, president Tadashi Yanai addressed the drop in sales by saying, “It was a marketing problem. I don’t think we communicated very well to customers what they should buy.”
Yanai also said the company plans to launch large-scale campaigns this season, including one that markets the underwear lines Serafine and Silky Dry as the summer version of HeatTech. The company is expecting to sell 17 million units of these underwear products, and Yanai said he thinks sales will pick up in April and May.
Based on expected strong performance of key products, Fast Retailing raised guidance for the full year ending Aug. 31. It now sees net profit coming in at 71 billion yen, or $785.97 million, an increase of 42.6 percent over last year and 5.2 percent higher than the company’s January forecast of 67.5 billion yen, or $747.2 million. Net sales are forecast at 834 billion yen, or $9.23 billion, up 21.7 percent over last year and 1.7 percent over January’s forecast of 820 billion yen, or $9.08 billion.
On Wednesday, the Japanese retailer said it will open its largest store in the world in Shanghai on May 15. The store will be 39,094 square feet. The company is also planning to open its largest store in Japan in Osaka’s Shinsaibashi area this fall, and three stores within Japanese department stores will open on April 23, including one in Takashimaya’s Shinjuku branch in Tokyo. Uniqlo has been expanding internationally and has stores in London, Paris, New York, Moscow, Singapore and several Chinese cities. Yanai said Thursday he hopes to open a store in Kuala Lumpur. Within five years he expects Uniqlo’s business outside of Japan to surpass domestic operations, with the majority of that centered in Asia.
In order to better control production quality and stock management, Yanai said Fast Retailing is planning to move its production and research and development departments and factories to China. He also foresees the opening of regional headquarters in Paris and New York.
When asked whether Fast Retailing may list shares abroad, Yanai said no decisions have been made as to where or when this might happen, but it’s a possibility the company will consider along with other scenarios.