* Forecasts 2017 op profit up 38 pct at a record 175 bln yen
* Plans to open around 100 new stores in Greater China
* 2016 op profit falls 23 pct, slightly better than firm's
(Adds CEO's comments, results details)
By Naomi Tajitsu
TOKYO, Oct 13 Japan's Fast Retailing Co Ltd
, the owner of the Uniqlo casual wear brand, is
deepening a push into overseas markets that it expects will help
offset tepid retail demand at home and rake in a record
operating profit in this financial year.
As two decades of a struggling economy have slashed consumer
demand in Japan, Asia's biggest clothing retailer by sales is
expanding its market share in China and Southeast Asia, as well
as trying to crack the North American market.
Fast Retailing said on Thursday it planned to increase the
number of overseas Uniqlo stores to 1,104 by the end of August
next year, focusing on Greater China and other Asian countries,
from 958 in the year just ended, while keeping the number of its
Japan stores unchanged.
The company, which began as a casual wear store in Hiroshima
in 1984, has been expanding aggressively in Asia, and saw the
number of overseas Uniqlo stores exceed domestic ones for the
first time last year.
After sales at overseas stores grew at a faster pace than at
home last year, the company plans to open around 100 new stores
in Greater China in the coming year and expects a further
pick-up in profit at its stores in China, Southeast Asia and
Chief Executive Officer Tadashi Yanai, the richest person in
Japan with a net worth of over $16 billion, according to Forbes'
2016 ranking, said that with growth prospects limited at home,
the company was focusing on increasing operating profit
internationally in the coming year.
"A big increase in domestic profit is unlikely given the
domestic macroeconomic situation, with negative rates, the
current financing situation and consumer trends," Yanai told
reporters at a results briefing.
"Overseas, we're going to see a bigger move towards a global
economy, where global players will compete. The ones that
succeed globally will succeed in Japan."
Revenues from overseas Uniqlo stores comprised around 37
percent of the company's total revenues in the year just ended,
compared with around 45 percent from domestic stores. The
company also owns global brands, including the higher-end Theory
and the lower priced GU.
Uniqlo, Japan's answer to cheap and cheerful fashion,
competes with H&M, Zara and Gap Inc,
among others. The brand focuses on affordable everyday staples,
enlisting fashion designers including Jil Sander and, most
recently Christophe Lemaire, to design collections.
Fast Retailing said it expected operating profit to jump 38
percent to a record high 175.0 billion yen ($1.70 billion) for
the year ending in August 2017, a touch above the average
estimate of 174.2 billion yen from 19 analysts polled by Thomson
Operating profit fell 23 percent to 127.3 billion yen in the
year just ended, compared with the firm's forecast for 120
billion yen. Its first slide in full-year operating profit in
five years was caused by currency related losses, while
impairment losses linked to its J Brand denim brand and store
closures at home and in the United States also weighed, the
Having struggled for years to make a profit in the United
States, the company has said it will continue to shutter
unprofitable stores located in suburban malls and focus on
opening more flagship stores in urban centres, It is also making
a push into Canada, opening its first store there last month.
To expand its global presence, better control its supply
chain and generate more sales at home, Fast Retailing is
investing in a distribution centre on the outskirts of Tokyo
which will serve as a distribution centre for its shops and what
executives have referred to as a "virtual flagship store".
($1 = 102.9000 yen)
(Reporting by Naomi Tajitsu and Ritsuko Shimizu; Editing by