Fast Retailing Closing 50 Uniqlo Unprofitable Stores In China
Fast Retailing, the owner of Uniqlo brand and retailer of apparels is planning to close 50 unprofitable stores in China. But at the same time the Japanese company also plans to open 80 new stores.
This was disclosed by Takeshi Okazaki, Chief Financial Officer of Fast Retailing who said it will adjust its store-opening strategy for its flagship brand Uniqlo in the Chinese market.
Okazaki noted that the company’s goal is to achieve similar average store sales in China as in Japan within 10 years.
To achieve this, Fast Retailing plans to close unprofitable stores in China over the next 2-3 years and will focus on opening new stores in high-traffic areas and prime locations.
According to a plan, by the end of Japanese fiscal ending in August 2024, Uniqlo will open 80 stores in China, while simultaneously closing 50 stores, resulting in a net increase of 30 stores.
“Beyond August 2025, there’s a possibility of maintaining a low net increase in store numbers,” Takeshi Okazaki told the Nikkei.
Additionally, Fast Retailing will also try to further increase its ecommerce sales, which currently contribute to 20 percent of sales in the Chinese market, higher than 15 percent in Japan.
Despite having over 1,000 stores in China, making it the largest market globally, Uniqlo’s sales still fall short of the Japanese domestic market.
As of fiscal ending on August 30, 2023, Uniqlo reported sales of Yen 890.4 billion from its 800 stores in Japan. As against this sales were Yen 620.2 billion from 1,031 stores in China.
In the first fiscal quarter ending November 2023, Fast Retailing’s sales increased by 13 percent year-on-year to Yen 810.8 billion, while net profit increased by 27 percent to Yen 107.8 billion.
