Fast Retailing cuts outlook over virus despite Uniqlo rebound
Coronavirus pandemic has decimated global fashion industry, despite China market picking up faster than expected
Japan’s Fast Retailing, owner of casual clothing brand Uniqlo, lowered its outlook for the year as the coronavirus disease pandemic wrought havoc on its global fashion business.
But it also reported a strong rebound in Uniqlo’s domestic same-store sales for June and said business in China was recovering faster than previously expected, suggesting it may weather the crisis better than many global peers. Store closures and weak both revenue and profit across the business,” CFO Takeshi Okazaki told reporters.
The company said markets such as South Korea, the US and several others including Indonesia had been particularly hard-hit, while adding that its two key markets, Japan and China, were recovering faster than expected.
Uniqlo’s domestic same-store sales, including online purchases, rose 26 percent in June from a year earlier, after falling 57 percent in April and 18 percent in May.
Okazaki said items such as stretchy jogging pants and oversized t-shirts proved popular in the past quarter in Japan. Analysts have said Uniqlo’s focus on practical, everyday clothing rather than more trendy styles may work to its advantage as more consumers are spending time at home.
Fast Retailing also depends heavily on Asian economies, especially China, where Uniqlo’s mix of affordable basics and occasionally trendy items proved a massive hit among the burgeoning middle class.
Its struggle to gain market share in the US, previously considered a major weakness, has spared it from a bigger hit from the virus outbreak.
Of Uniqlo’s
2,260
stores
FASTFACT
globally, just 51 are in the US, which has reported the highest number of coronavirus infections in the world.
Okazaki said the company was not retreating from the US market, although it would step up its “scrap and build” strategy of concentrating on profitable locations and shutting down low-performing stores.
He declined to comment when asked whether it would consider buying Brooks Brothers, which on Wednesday joined a list of US brands that have filed for bankruptcy.
Uniqlo operates 2,260 stores globally, including 51 in the US.