After posting a disappointing set of first-half figures, Fast Retailing is preparing to slash prices at its Uniqlo chain to boost business, Fast Retailing chairman and president Tadashi Yanai told The Nikkei in an interview.
Yanai told the Japanese newspaper that Uniqlo will return to its simple pricing regime because recent price hikes in the past two years have proven to be a mistake.
“Customers didn’t agree that products with new, higher prices reflect fair value,” Yanai said. “The market was in a very tough situation. We made a mistake of raising prices under such circumstances. Consumer sentiment has turned out to be far worse than we thought.”
Last week, Yanai made similar comments about adjusting Uniqlo’s pricing strategy when Fast Retailing said that profit for the six months ended Feb. 29 plummeted 55.1 percent to 47.04 billion yen, or $393.40 million at average exchange. The company also cut its full-year earnings forecasts for the second time.
In his interview with The Nikkei, Yanai also criticized his employees for the company’s poor showing in the first half of the year.
“We didn’t achieve growth this first half [the six months through February]. We only got bloated,” Yanai said. “Everyone was focusing only on their own section. They only chased after what was best for their own section. A lack of the business owner’s perspective among many of our workers made it impossible for our company to keep up with dramatic changes.”