Uniqlo parent Fast Retailing is stepping up new store openings, reviewing its manufacturing operations and rethinking localized marketing.
The Japanese fashion conglomerate aims to open 20 Uniqlo stores in North America and 10 in Europe annually, plus about 80 a year in the Greater China region. Fast also plans to open an estimated 60 new stores each year in the Southeast Asia, India and Australia region. In addition to the store openings, it estimates that it will close 50 doors each year that aren’t driving enough profits or attracting enough traffic.
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Instead of developing products focused on the Japanese market, Fast Retailing is working to create fashion with global appeal. It also needs to control production and SKUs and better manage story productivity from market to market. It raised employee wages earlier this year to incentivize staff.
In September last year, Fast Retailing opened its New York global headquarters to better get a handle on producing merchandise that resonates across markets. “We are already seeing the emergence of multiple hit products that reflect global needs,” it said.
For the year, profits were up 8.4 percent to 296.2 billion yen ($1.98 billion), on a total revenue gain of 20.2 percent to 2.767 trillion yen ($18.49 billion). Second half profit of 142.8 billion yen ($954.3 million) and revenue of 1.3 trillion yen ($8.68 billion) were lower than first half profit of 153.3 billion yen ($1.02 billion) and revenue totaling 1.467 trillion yen ($9.81 billion).
Uniqlo International accounted for over half of the total revenue for the first time. In general, Uniqlo Japan posted strong sales of higher-priced outerwear and bottoms throughout the year, with the average purchase price up 11.1 percent year-over-year. The chain’s HEATTECH-branded innerwear resonated with customers across its Japanese, South Korean, North American and European markets.
For Fiscal Year 2024, Fast is projecting “large” gains in revenue and profit for the first and second halves and full year results at its Uniqlo International division. Uniqlo Japan is also expected to see some gains, with same-store sales to rise slightly. A refined brand concept and trend-focused products should help GU revenue improve. At Global Brands, Fast is anticipating sufficient gains to get back into the black, with large increases in revenue and profits at Theory. PLST will see store closures, translating into a decline in full-year revenue but the business is still expected to move from the red to a break-even point. The Comptoir des Cotonniers and Princesse tam.tam should see revenues rise and losses shrink, Fast said, adding that it will add more boutiques inside Uniqlo stores after “strong” early results.
After opening 192 doors and closing 103, Uniqlo ended the year with a net increase of 89 new locations for a total store count of 2,434, including 10 Uniqlo Japan franchised stores. It closed the 10 remaining Grameen Uniqlo stores in Bangladesh in the spring. Fast projected a Uniqlo store network of 2,544 for Fiscal Year 2024, comprised of 220 new doors and 110 closures for a net increase of 110 locations.
Total store count for Fast was 3,578 in Fiscal Year 2023, including GU and Global Brands. A total store network of 3,660 was the projected tally for all operations for Fiscal Year 2024.
