Japan-based Fast Retailing’s Uniqlo USA unit showed signs of improvement in the second half of its fiscal year, though the full-year operating loss expanded year on year following impairment losses on stores and other temporary losses.
In the fiscal 2016 year just ended, Uniqlo reported increased revenue but decreased profits: Consolidated revenue was up 6.2% year over year to 1.7864 trillion yen, and operating profit fell 22.6% to 127.2 billion yen.
In the fiscal year ending in August 2017, Fast Retailing anticipates operating profit will climb 38% to a record high 175.0 billion yen ($1.70 billion), ahead of the average estimate of 174.2 billion yen from 19 analysts polled by Thomson Reuters.
Fast Retailing CEO Tadashi Yanai has clearly and often expressed his ambitions to overtake Zara as the largest apparel retailer in the world. But the force and speed of Uniqlo’s expansion in the U.S. has been too much, too soon, and a year ago the brand scaled back its expansion plans here, limiting its new plans for 15 new stores to just five, for a total of 44.
Fast Retailing now says it aims to expand in Asia, Europe and the U.S., while keeping the number of its stores in Japan the same. It is also moving into Canada, opening its first store there last month.
“We are boosting awareness of the Uniqlo brand by opening global flagship stores and regional flagship stores in major cities worldwide, and polishing our global marketing,” Fast Retailing said Thursday. “Boosting visibility is a top priority in the United States to help turn a profit as soon as possible.”
Fast Retailing also emphasized major changes to speed up its supply chain, and said it is expanding its e-commerce operations and transforming its distribution systems.
“We want to transform our industry into an ‘Information Powered Retail Business,’ capable of immediately incorporating feedback from customer into products, and proactively conveying latest information on lifestyles, fashion trends, and exciting but comfortable modern clothing,” the company said.