On January 9, the global apparel chain brand Uniqlo’s operator, Fast Retailing, announced its quarterly performance. Despite a significant decline in profits in the Chinese market, the company showed strong performance in its home country of Japan and in the European and American markets.
Fast Retailing reported that in the three months from September to November of last year, operating profits increased by 7.4% compared to the same period the previous year, reaching 157.6 billion yen (approximately 1 billion USD), slightly below analysts’ earlier forecast of 160 billion yen growth.
The company’s full-year operating profit forecast remains unchanged at 530 billion yen, and it is expected to achieve a record profit for the fourth consecutive year.
Fast Retailing is known for its affordable and durable fleece jackets and cotton shirts, long considered a barometer of consumer spending in Japan.
Benefiting from a weak yen and a booming tourism industry, domestic sales in Japan have seen a rise due to the surge in duty-free shopping.
However, sales growth in China has slowed down, leading the company to reduce new store openings and adopt a “demolish and rebuild” strategy to revitalize underperforming stores through redesign. Currently, Uniqlo has over 900 stores in mainland China.
Improved profit margins and international brand recognition drove record performance last year, but the company remains susceptible to weather and changes in fashion trends.
Fast Retailing stated that the cold weather in December increased demand for thermal underwear, while in China, unusually warm temperatures led to flat sales in October and November.
In North America and Europe, Fast Retailing’s performance is equally strong. The company has been aggressively expanding in these regions with the aim of becoming the top clothing brand globally. In the southern United States, Fast Retailing opened five Uniqlo stores in Texas alone last October.
In the domestic market of Japan, Fast Retailing has also become a leader in the service industry wage sector.
In order to retain top talent, Fast Retailing recently announced a significant increase in employee salaries in Japan. In 2023, the company’s wage hike helped break Japan’s long-standing wage stagnation.
The company stated that salaries for full-time headquarters and sales staff will increase by up to 11% starting from March, while new employees’ annual salaries will rise by approximately 10%.
(This article is based on a report by Reuters)