A fifth of Uniqlo International’s sales took place online in its latest financial year. Its parent company is prioritising both digital commerce and sustainability and says it will offer fewer products while moving away from discounting in order to become a “lean business with no unnecessary use of resources”.
Uniqlo International online sales grew by 20% during its latest financial year, to account for about 20% of total sales – thanks to a strong performance in the China region and fast Covid-19 recoveries in Europe and North America. Strong ecommerce sales helped drive rising sales and profits at Uniqlo’s Europe business. Uniqlo parent company Fast Retailing now plans to expand its ecommerce business quickly. “Ecommerce enables us to connect directly with customers so expanding ecommerce should help increase overall sales,” Fast Retailing says in its full-year figures.
At the same time, Fast Retailing says it will prioritise sustainability while increasing profitability in North America and Europe. It says it will move away from discounting in order to promote its products and brand values. That means reducing the number of products it sells, “pursuing a lean business with no unnecessary use of resources”.
Uniqlo International sells to markets including the UK, where the Uniqlo retail brand is ranked Top100 in RXUK Top500 research. Uniqlo led the post-Covid 19 recovery at its parent company Fast Retailing in its latest financial year.
Revenues at Uniqlo parent company Fast Retailing reached 2,132bn yen (£13.6bn) In the year to August 2021. That’s 6.2% up on the previous year. Pre-tax profits came in at 265bn yen (£1.7bn), up by 73.9% on the same time last year. In the coming year – to August 2022, it expects to reports full year sales of 2,200bn yen (£14bn +3.1%) and pre-tax profits of 270bn yen (£1.72bn) (+12.2%).
Within that, Uniqlo International – which includes the UK – reported revenues of 930.1bn yen (£5.9bn), 10.2% up on the previous year. Profits of 118.2bn (£751.9m) yen were up by 86.1% on last time. Uniqlo Japan reported full year revenues of 842.6bn yen (£5.36bn +4.4%), and profits of 126.6bn (£805.3m, 18.5%). Uniqlo International is expected to report “considerable increases” in both full-year revenues and profits.
Fast Retailing says that Uniqlo International saw a “record performance” in the Greater China region, where both revenues profits grew quickly. In both Europe and North America, sales recovered quickly as trading and lockdown restrictions eased. Uniqlo Europe moved back into profit, while Uniqlo Noth America halved its full-year operating loss. But sales and profits fell in South Asia, Southeast Asia and Oceania, as a result of Covid-19.
Looking ahead, the retail group now expects that sales and operating profits will fall in the first half of the year as Covid-19 restrictions continue in many of its markets, but that those restrictions will be eased in the second half – leading to large revenue and profit rises.
“Despite the pandemic,” Fast Retailing says in its full-year figures, “we have been able to greatly improve profitability in line with the recoveries in sales in North American and Europe thanks to some determined reforms of earnings structures that focused on improving gross profit margins, closing unprofitable stores, reducing fixed costs and normalising inventory levels.”