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Uniqlo’s Tadashi Yanai on Charity and China

The chairman, president and chief executive officer spoke with WWD about business in general.

TOKYO — Uniqlo held a press conference here Tuesday with tennis star Novak Djokovic to unveil a charitable initiative that will see 1 billion yen, or $12.69 million at current exchange rates, donated to various children’s causes over the next five years.

The project, called Clothes for Smiles, will use a portion of proceeds from the brand’s popular Heattech and Ultra Light Down products. Half the total fund will go toward a global alliance agreement with UNICEF that will focus on education and schools in Bangladesh, the Philippines, China and Serbia, Djokovic’s home country. More countries will be added as the project progresses.

Uniqlo is accepting ideas from consumers on how it should use the other half of the fund. By using a dedicated Web site, ideas will be accepted through Dec. 31 for the first round. A panel of judges made up of Djokovic; Uniqlo’s chairman, president and chief executive officer Tadashi Yanai; architect Tadao Ando, and Nobel Peace Prize recipient Muhammad Yunus will choose the winners, who will be revealed next March.

“I feel lots of joy and excitement to be for the first time in Japan and to finally have the opportunity to spend some time with Mr. Yanai and the whole Uniqlo family,” Djokovic said.

After the press conference, Yanai spoke briefly with WWD about business in general. Here is what he had to say:

WWD: The day after Fast Retailing Co. Ltd. released its full-year financial results last week, the company’s shares fell on the market. What is your reaction to that?
Tadashi Yanai: Well, our results didn’t go as projected, so I think it’s natural that [shares] would fall.

WWD: And what do you think is the main reason you didn’t meet your projected results?
T.Y.: It was our own problem. I think we didn’t release new products and things that surprise people. Domestically, we didn’t have another hit.

WWD: You make a lot of your products in China, but you’ve also talked about increasing production in other Asian countries. Can you elaborate on that at all?
T.Y.: Now, [our production] isn’t only in China. We’re also planning on increasing [production] in China from now, but if we’re going to grow, we also need to develop factories in places like Bangladesh, Indonesia, Vietnam and Cambodia that we can use for our production.

WWD: About how much of your production is currently based in China?
T.Y.: It’s about 75 percent.

WWD: And how much do you plan on reducing that percentage in the future?
T.Y.: Well, I think it would be about half-half [in China and other Asian countries].

WWD: Did the recent anti-Japan protests in China have any affect on your production there?
T.Y.: No, there was no effect.

WWD: How about on sales?
T.Y.: There was an affect on sales. A lot of Japanese brands were affected, but recently things have been improving a little, so I think very soon a full recovery will be made.

WWD: You said at your results briefing that your international sales also didn’t meet your forecasts. Did the effect of these protests have anything to do with that?
T.Y.: I don’t think it was really related to that, since that is a problem only in China. However, [sales were down] globally, starting with China and also in Europe. I think [the economy in] the U.S. is improving a little….But I still can’t say it’s booming. With Europe in its present condition, there are few good places in the world [economically speaking].

WWD:
You recently opened your first Uniqlo store in San Francisco. How is that going so far?
T.Y.: I think it went even better than we expected. The people of San Francisco really welcomed us, particularly the mayor. I almost think the mayor is our salesman. From start to finish, he gave a hard selling speech for us, which I was extremely thankful for.

WWD: You’ve also said that you’re planning to start an e-commerce site from your San Francisco offices. Do you have a timeline for that?
T.Y.: It’ll probably start either this month or next month. At first, we’ll build an e-commerce model in the U.S., and then we’re thinking of bringing that same model to other countries around the world. San Francisco is near the Silicon Valley, so I want to make the [system] in the U.S.

WWD: Do you have any other plans or upcoming news to share?
T.Y.: I think our next new country will probably be either Indonesia or Australia.

WWD: And when might that be?
T.Y.: No comment.