Uniqlo remains determined to overtake Zara. Although parent company Fast Retailing saw profits plummet by 44% in the past financial year and sales fall by 12.3%, the Japanese clothing giant is already expecting a strong recovery next year.
Ambition: overthrow Inditex
Fast Retailing, the Japanese parent company of Uniqlo and Comptoir des Cotonniers, wants to overthrow Inditex as the world's leading fashion player. This ambition was reiterated by CEO Tadashi Yanai when he announced the annual figures for the broken financial year 2019/2020, which ended in August. The dream is also coming closer, Yanai believes, as the corona crisis only confirms the strength of the Asian market with its 4 billion consumers.
After all, the recovery is faster in Asia than in the West. The Chinese market is already showing growth again today, after a 9.2% drop in turnover in China, Taiwan and Hong Kong in the past year. On the Japanese home market, comparable sales even increased by 20.2% in the fourth quarter compared to a year earlier. Uniqlo's online sales also rose sharply last year, by 29.3% in Japan and 20% abroad.
Back to record level
However, the corona crisis also hit the company hard: over the year as a whole, turnover fell by 12.3% to 2.01 trillion yen (16.3 billion euros), while net profits plummeted by 44.4% to 90.36 billion yen (0.73 billion euros). The figures are nevertheless better than the 2008.8 billion yen turnover and 85 billion yen profit predicted by analysts.
The positive evolution also gives the Uniqlo mother the necessary confidence to issue ambitious forecasts for the current financial year until the end of August 2021. Yanai already expects to book 82.6% more net profit and a 9.5% higher turnover. In this way, the group would almost return to the old level before the corona crisis, which was also a record level for the fashion giant. Fast Retailing is counting on the first half of 2021 in particular, in the hope that Covid-19 will be under control by then.