Fast Retailing Co.’s Uniqlo chain of casual clothing aims to enter the Indian market “as soon as possible” to tap faster-growing economies to bolster sales.
“We want to study details of the agreement between Japan and India right away,” Fast Retailing President Tadashi Yanai said in an interview in Tokyo today, referring to the trade accord that the two nations signed yesterday. “We want to enter India as soon as possible.”
Fast Retailing, Asia’s largest clothing chain, plans to expand the number of Uniqlo stores overseas in an effort to boost sales sixfold to 5 trillion yen ($60 billion) by 2020. Making Uniqlo’s 3,990 yen jeans available in India, where the government predicts economic growth of 8.6 percent this year, may help Fast Retailing stem its slowest sales growth in more than seven years.
“The faster they open stores in India the better,” said Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “It will give Uniqlo a head start to building its brand.”
Separately, Uniqlo said today that it aims to sell more than 10 million pairs of chino and cargo pants this spring and summer. Fast Retailing is returning its focus to functional wear after attempts to compete in trendy apparel with Inditex SA’s Zara and Hennes & Mauritz AB’s H&M brands eroded sales growth.
Sales at Yamaguchi, Japan-based Fast Retailing gained 5 percent in the second half ended Aug. 31, the smallest increase since at least 2003, according to data compiled by Bloomberg.
Fast Retailing fell 1.8 percent to 12,340 yen at the 3 p.m. close on the Tokyo Stock Exchange. The stock slumped 26 percent last year, compared with a 3 percent drop for Japan’s benchmark Nikkei 225 Stock Average.
Indian Minister of Commerce and Industry Anand Sharma and Japanese Foreign Minister Seiji Maehara signed a Comprehensive Economic Partnership Agreement that will abolish tariffs on 94 percent of trade over 10 years. Indian Prime Minister Manmohan Singh and his Japanese counterpart Naoto Kan reached a preliminary deal in October.
The accord gives companies in Japan greater access to India as China’s presence in the region increases. China overtook Japan as the world’s second-biggest economy last year.
Fast Retailing plans to add 44 Uniqlo stores overseas and 36 in Japan in the 12 months ending August, raising its total to 1,024, the company said Oct. 8. That’s the same pace of openings as last fiscal year. The company’s second U.S. store is scheduled to open on New York’s Fifth Avenue later this year.
“Big cities offer so many business opportunities,” Yanai said.