Uniqlo parent notches up robust Asian growth

Tokyo

JAPAN'S Fast Retailing Co Ltd, the owner of clothing chain Uniqlo, on Thursday raised its full-year profit forecast by 13 per cent on the back of robust growth across Asia, as it continues to chase the top spot in global apparel sales.

Asia's biggest clothing retailer now expects operating profit for the year through August to reach 225 billion yen (S$2.77 billion) from 200 billion yen previously. The new forecast is higher than the 221.4 billion yen average of 17 analyst estimates in a Thomson Reuters I/B/E/S poll.

Asia has become a major growth driver for Uniqlo as its affordable clothing lines, including breezy AIRism innerwear and lightweight down jackets, grow in popularity in China and South-east Asia.

The retailer's appeal in the region could be its trump card as founder and chief executive Tadashi Yanai looks to fulfil his ambition to overtake H&M and Zara parent Inditex to become the world's top apparel retailer.

The firm currently sits in third place, above Gap Inc. Its Uniqlo chain is also growing at home, with same-store sales in the first six months of its financial year rising 8.4 per cent, boosted by demand for warm clothes during a particularly cold Japanese winter.

However, a lack of warm clothing options at low-priced chain GU - which the firm hopes to build up to become a second Uniqlo - sent same-store sales falling slightly over the same period.

Online sales at Uniqlo Japan grew 31.6 per cent, forming 7.5 per cent of total sales. Uniqlo said it wants to more than double the proportion of global sales made online from 9 per cent currently by the year ending August 2023.

Fast Retailing's recent fortunes contrast with those of H&M, whose sales growth has stalled as it struggles to adapt to the shift to online shopping.

Uniqlo will open its first store in the Swedish retailer's home market this year. Fast Retailing's operating profit grew 35 per cent to around 56.6 billion yen for the three months ended February, showed Reuters calculations based on company data. Analysts had forecast profit of 49.1 billion yen. REUTERS