Uniqlo’s massive expansion catalyst for growth
Between September 2014 and August 2015, Fast Retailing managed a 1,681 billion yen (12.5 billion euro) turnover, up more than a fifth compared to the year before. Operational profit grew 25 % and reached 164.4 billion yen, while its net profit grew even more at almost 50 % to 110 billion yen (some 815 million euro). Nevertheless, analysts had expected more.
The record year is largely caused by the international expansion of its retail subsidiary, Uniqlo, worth more than 80 % of the company’s turnover. Wit this expansion, the chain is not as dependent on its Japanese home territory as it used to be: only 47 % of Uniqlo’s turnover comes from Japan nowadays. Nevertheless, it costs a lot of money to sow a seed, particularly in the United States: “Because of our rapid expansion and the relative unknown brand in the United States, Uniqlo USA’s operational losses are still growing”, the company said.
Despite all this, Uniqlo will continue its international expansion and wants to open another 195 new stores by August 2016, which should bring the total to 3,173. Fast Retailing does warn, for its current fiscal year, that growth will probably end up being lower: sales should ‘only’ increase 13 % to 1,900 billion yen, while operational profit should ‘only’ increase 21.6 % to 200 billion yen. However, those are still numbers that many other retailers would kill for…
