Sales up but profits slump at Uniqlo parent Fast Retailing
Fast Retailing, the Hong Kong-based group that counts Uniqlo, J Brand, Theory, Princesse Tam Tam and Comptoir des Cotonniers, among its brands has revealed full-year results which show a 53.9% slump in net profits which it has attributed to foreign exchange adjustments and impairment losses at J Brand and other operations.
In the year to 31 August 2016, the company recorded net profits of ¥54bn (2015: ¥117bn) on revenues of ¥1.8trn, which were up 6.2% on last year. Consolidated operating profit totaled ¥127.2bn (a drop of 22.6%).
The business said there were "multiple reasons for this considerable fall in profit", including a foreign exchange loss for fiscal year 2016 of ¥11bn, a ¥13.8bn impairment loss at premium denim brand J Brand, and a total of ¥9.3bn in impairment losses along with assets retirement and store-closure losses relating to some stores at Uniqlo Japan and Uniqlo USA.
In its statement the group said it was maintaining its "medium term" ambition to be the world's number one "Information Powered Retail Business". To that end it was pressing ahead with plans to expand Uniqlo's store presence in each country in which it operates, along with its lower-priced GU casual brand (which it will also introduce to more international markets). In March this year it unveiled a revamped flagship on London's Oxford Street, increasing the selling space from three floors to five and adding a roof terrace that is used for cultural events.
It will also move forward with plans to shake-up its supply chain to unify all procedures "from raw materials procurement, planning, design, manufacturing and retail into a new supply chain system that can fully satisfy the needs of today’s digital era".
"We are looking to transform our industry into an 'information-driven manufacturer/retail business', capable of both immediately incorporating feedback from customer into products, and actively conveying the latest information on lifestyles, fashion trends, and exciting but comfortable modern clothing," the company said.
