The Japanese retail group Fast Retailing Co. Ltd. closed the first half of the 2021/22 financial year with a small increase in sales and a significant increase in profits. However, the tightened protective measures against the Covid 19 pandemic in China have slowed down the pace of growth, the parent company of the textile chain Uniqlo said on Thursday. The company attributed the fact that new record figures were nevertheless achieved to the “diversification of the revenue pillars” as part of the expansion strategy. Strong growth in the US, Europe and the South and Southeast Asian markets more than offset weaknesses in Japan and China.
In the six months ended February 28, the company generated sales of 1.22 trillion Japanese yen (8.91 billion euros). The revenues thus exceeded the previous year’s level by 1.3 percent. However, the main brand Uniqlo had to contend with problems in its traditional core markets: In Japan, its revenues fell by 10.2 percent to 442.5 billion Japanese yen. In addition, sales in mainland China shrank. The company explained that the restrictions imposed as a result of the increasing number of Covid cases had dampened demand there.
Strong gains in Europe, the US and Southeast Asia more than offset losses in Japan and China
However, strong sales growth in other Asian markets and in Oceania as well as in the USA and Europe ensured that Uniqlo was able to achieve “impressive” results in foreign business despite the problems in China, said Fast Retailing. Overall, half-year sales in the Uniqlo International segment were 593.2 billion Japanese yen, up 13.7 percent year-on-year.
The revenues of the GU brand shrank by 7.4 percent to 122.8 billion Japanese yen, which the group attributed to unusually mild autumn weather and delivery problems for winter items, among other things. The Global Brands division, which includes the group’s smaller labels such as Theory, Comptoir des Cotonniers and Princesse Tam Tam, achieved sales of 58.9 billion Japanese yen, exceeding the corresponding prior-year level by 8.1 percent.
Not least thanks to significant improvements in earnings in the USA and Europe, Fast Retailing was able to increase its operating profit significantly in the first half of the year: at 189.2 billion Japanese yen, it was 12.7 percent above the corresponding figure for the previous year. Net profit attributable to shareholders even increased by 38.7 percent to 146.8 billion Japanese yen (1.07 billion euros).