Uniqlo's Strong Sales Boosts Fast Retailing's Profits
Good sales figures at Uniqlo helped
give Fast Retailing Co., Japan's largest clothing retailer, some good news; the company raised it's yearly profit forecast 8.9%. The Heattech thermal wear and fleece sweater sales were flying off shelves and led to the increased profit forecast. The new clothing line from Jil Sander is also selling like crazy.
Net income may be 67.5 billion yen ($723 million) in the 12 months ending August, compared with its earlier estimate of 62 billion yen, the company said in a statement today. It posted a 49.8 billion yen profit a year earlier.
Hit products such as the +J line overseen by German designer Jil Sander led to a 40 percent surge in first-quarter sales, defying a slump in Japanese household spending amid job losses and falling wages. Chief Executive Officer Tadashi Yanai, Japan's richest man, is expanding Uniqlo overseas with store openings in Europe, the U.S. and Asia.
"No one can follow Fast Retailing," Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo. "Uniqlo clothes are fashionable and attractive so they don't bore customers."
The retailer, which competes with Inditex SA's Zara and Hennes & Mauritz AB's H&M brands, raised its full-year sales forecast to 820 billion yen from an earlier estimate of 798 billion yen.
Other Japanese clothing retailers continue to see sales slump, so Uniqlo's success is all the more impressive. Salaries in Japan had dropped for the last 18 months in a row, and retails sales have been down for the last 15 months in a row.
