Uniqlo owner Fast Retailing says it will put ecommerce to work in improving product availability, after a first half in which parts of its business suffered from shortages.
The Japanese retail group, which also owns brands including Gu and Comptoir des Cotonniers,, has reported revenue of Y1.22 trillion (£12.97bn) in the first half of its financial year, 1.3% up from the same time last year, and pre-tax profits of Y212.5bn (£1.3bn) (+24%). In the six months to February, sales at its international Uniqlo business – which includes the UK and Europe markets – grew by 13.7% to Y593.2bn. Operating profits of Y100.3bn (£0.61bn) were 49.7% up last time. But Uniqlo sales in its domestic Japanese market fell by 10.2% to Y442.5bn (£2.7bn), while operating profit was 17.3% down at Y80.9bn (£0.5bn). Like-for-like sales in the market fell by 9% – something that was ascribed both to a strong prior year performance “and to lost sales opportunities resulting from shortages in some strong-selling Winter ranges”.
In the full year, Fast Retailing predicts revenue will grow by 3.1% to reach Y2.2 trillion (£13bn) and that operating profit will come in at Y190bn (£1.16bn) (+11.9%).
In its international Uniqlo business, revenues and profits both fell in mainland China during ongoing Covid-19 outbreaks, but sales rose in markets including Europe, South and South East Asia and Oceania. The retail group plans to open a flagship store in London’s Regent Street this month, following on from flagship openings in Paris and Beijing. “We intend to showcase the Uniqlo brand to the world from prime locations in major global cities,” says Fast Retailing in today’s figures. The group plans to open at least 300 new shops in its current financial year, to take it to a total of 3,595, of which 1,607 are international Uniqlo stores.
Looking ahead, the retail group’s strategy is to focus on improving product availability following shortages in markets including Japan in the first half of the year, using tools including multichannel. “We will seek to further meld our physical store and ecommerce operations by fully unifying store and ecommerce inventory etc to ensure consumers can buy the products they want via ecommerce anytime, anywhere, without suffering product shortages,” it says in today’s figures. It will also boost its orders and improve its planning.
Louise Deglise-Favre, apparel analyst at GlobalData, says the group plans to continue growing Uniqlo’s international presence, opening stores in all regions and new flagship stores in major cities to promote its LifeWear concept internationally, which includes well-made, simple everyday items with technology-driven designs.
She adds: “Fast Retailing also plans to improve its online proposition, which has often been criticized for its lack of modernity, failing to engage consumers in a truly integrated multichannel experience as illustrated by Uniqlo Japan’s low online penetration of 16.4% (compared to Japan’s total online penetration which GlobalData forecasts to be 25.2% in 2022).
“An enhanced online presence, with better functionality, more modern visuals and a free standard delivery option, will be instrumental in achieving higher growth in the future as the group is not currently able to fully capitalise on the rapid development of the online channel.”