TOKYO — Fast Retailing Co. Ltd. said Monday it has decided to pursue a secondary listing of its shares on the Hong Kong Stock Exchange to boost its profile in Asia and appeal to more international investors.
This story first appeared in the January 28, 2014 issue of WWD. Subscribe Today.
The corporate parent of Uniqlo said it is not issuing new shares so it is not raising any capital in the operation. The company said it plans to list its Hong Kong depository receipts March 5, but it might decide to postpone the listing if business and market conditions change.
Press reports and speculation about a secondary listing for Fast Retailing have been circulating for months. The company’s primary stock market listing is in Tokyo, where it has been a strong performer over the past year as the entire market rallied. Fast Retailing’s shares have grown about 67 percent over the past year to trade at 37,620 yen, or $367.13 a share. They shed 1.6 percent of their value Monday to close the session at 37,600 yen, or $366.94 a share.
Coach Inc., which is traded in New York, made a similar move in 2011 when it listed depository shares in Hong Kong. Against the backdrop of the fast-growing Asian market for fashion, the Hong Kong Stock Exchange is proving popular with luxury brands. In 2001, Prada SpA and luggage maker Samsonite raised nearly $2.5 billion and $1.25 billion, respectively, in initial public offerings on the exchange.
Earlier this month, Fast Retailing said its net profit for the first quarter ended Nov. 30 rose 8.8 percent to 41.85 billion yen, or $422.69 million at average exchange rates for the period. First-quarter operating profits increased 13.1 percent to 64.03 billion yen, or $646.70 million. Sales jumped 22.3 percent to 389.05 billion yen, or $3.92 billion.
Recent analysts’ reports on the company are upbeat.
“The Uniqlo international segment contributed much more to earnings than we expected, making up for concerns about earnings in the Uniqlo Japan segment. We take a favorable view of management reforms aimed at advancing the global brands business,” Nomura analysts Masafumi Shoda and Rimi Yoshida wrote in a report published Jan. 9. The bank has a neutral rating on the stock.