TOKYO — Tadashi Yanai isn’t giving up on his ambitions to be the biggest apparel retailer in the world.
Speaking at a press briefing here on Thursday after his Fast Retailing group reported higher profits and sales for the first half of the fiscal year, Yanai, the group’s chairman, president and chief executive officer, said the retailer will significantly step up store openings, aiming for 400 to 500 new stores a year globally in the near future.
“We aim to become the number-one casualwear brand in the world,” Yanai reiterated of an ambition he first revealed four to five years ago.
One of the keys to that aggressive growth plan will be North America. Daisuke Tsukagoshi, CEO of Uniqlo USA, said Uniqlo’s operations in North America are moving into a new stage of expansion. The company is targeting 300 billion yen, or $2.38 billion, in sales by 2027. It also aims to open 30 new stores a year, and to increase its total store count in the region to 200 within five years. He did not reveal current sales levels.
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These targets were revealed as Fast Retailing on Thursday reported higher sales and profit, bolstered by a greater diversification of the group’s revenue streams. It said it saw particularly strong results at its Uniqlo operations in South Asia, Southeast Asia and Oceania, North America and Europe. Foreign exchange gains resulting from a weaker yen also contributed to the company reporting a record high profit for the first half of the year.
For the six months ended Feb. 28, Fast Retailing saw its net profit surge by 38.7 percent, totaling 146.8 billion yen, or $1.17 billion.
Its operating profit for the period gained 12.7 percent on the year, coming in at 189.2 billion yen.
The company saw a 1.3 percent increase in first-half net sales, for a total of 1.22 trillion yen.
Among Fast Retailing’s business segments, Uniqlo International showed strong performance, posting significant increases in both revenue and profit. Sales for the segment rose by 13.7 percent on the year, totaling 593.2 billion yen, while operating profit shot up by 49.7 percent to 100.3 billion yen. The results were driven by robust growth at Uniqlo operations in South Asia, Southeast Asia and Oceania, North America, and Europe, which all reported large increases in both sales and profit.
“Operating profit generated by North America and Europe constituted approximately 20 percent of the total for the Uniqlo International segment,” Fast Retailing said in a release. “This represents the second-largest earnings pillar in this segment after the Greater China region, which accounts for around 55 percent.”
Adversely affected by restrictions to control the COVID-19 pandemic, Uniqlo reported decreased revenue and a large decline in profit in its mainland China operations.
Uniqlo Japan also reported large drops in both sales and profit. Revenue declined by 10.2 percent on the year to 442.5 billion yen, while operating profit dropped by 17.3 percent to 80.9 billion yen. Same-store sales contracted by 9 percent year-over-year.
“The decline followed strong demand in the year-ago period when the pandemic contributed to higher stay-at-home demand and sales of Airism masks,” the company wrote in its release. “In addition, shortages of popular winter ranges resulted in lost sales opportunities. Online store sales at Uniqlo Japan declined slightly, with a 1.9 percent fall year-over-year to ¥72.4 billion in the first-half period. The unit remains on a steady expansion track, however, showing an increase of approximately 40 percent over a two-year period.”
GU, Fast Retailing’s lower-priced, fashion casualwear brand, reported a decline in revenue and a considerable contraction in profit for the first half. Its sales declined by 7.4 percent from a year ago to 122.8 billion yen, while operating profit decreased by 40.9 percent to 9.3 billion yen.
“Sales declined over the period due to warm weather early on in the season, lowering sales of fall items, while production [and] distribution delays for some winter items resulted in lost sales opportunities,” Fast Retailing said in its release.
The company’s Global Brands segment reported an increase in revenue and a return to profitability. Total sales rose by 8.1 percent year-over-year to 58.9 billion yen, and operating profit came in at 1 billion yen, compared with a loss of 8.1 billion yen in the previous year.
At the results briefing on Thursday, Yanai also emphasized the importance of activities that contribute to the betterment of society, saying, “I think we have to realize that there are certain things that only corporations can do.”
Yanai later elaborated, saying, “Rather than thinking about what we can’t do as corporations or individuals, we need to think about what we can do. There’s nothing we can’t do.”
Fast Retailing left unchanged its sales and operating profit guidance for the current fiscal year, ending Aug. 31, but it raised its net profit forecast.
The company now expects its net profit to grow by 11.9 percent to 190 billion yen. Its previous forecast was for 175 billion yen.
Operating profit is still projected to increase by 8.4 percent to 270 billion yen.
Fast Retailing maintained its full-year sales forecast at 2.2 trillion yen, representing year-over-year growth of 3.1 percent.