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Uniqlo Parent Company Rides China Resurgence to Beat Pre-Pandemic Profits

Uniqlo flagship store in Shanghai. Fast Retailing

Uniqlo parent company, Fast Retailing, announced its overall group revenue for the quarter ended November 2020 dropped 0.3 percent year-on-year, but operating profit rose to 113.1 billion yen ($1.09 billion), up 23 percent from a year earlier when the Covid-19 pandemic had yet to emerge.

For Uniqlo, by far the group’s biggest brand, international revenues fell 7.2 percent for the quarter, year-on-year, but operating profit was up 9.5 percent, buoyed by improvements on gross profit margins in many international markets.

Mainland China, Taiwan and Japan provided bright spots on the global map for the mass market fashion retailer, with revenue and profit falling sharply in North America, Europe, Southeast Asia and Oceania, all areas more heavily impacted by Covid-19 over the reporting period.

In Japan, where Uniqlo’s 20th anniversary was promoted heavily in this quarter, net sales rose 7.3 percent and e-commerce sales were up 48.3 percent. Uniqlo credited increased profit margins in Japan and elsewhere to the brand resisting dramatic discounts over the reporting period.

In mainland China, sales proved particularly strong over the October holiday ‘Golden Week’ period, and Uniqlo was the top-selling apparel brand on Alibaba’s platforms for the Singles’ Day sales period for the fifth year running, again without relying on discounting items as heavily as it has in previous years.

Fast Retailing operates about 800 Uniqlo stores in mainland China, approximately the same number as in its home market of Japan.

The company maintained its forecast for 2.2 trillion yen ($21.15 billion) in sales and operating profit of 245 billion yen ($2.36 billion) for its fiscal year through August.

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