Fast Retailing's Uniqlo Posts Smallest Store-Sales Decline in Three Months
Fast Retailing Co., Asia’s biggest clothing chain operator, posted the smallest sales decline in three months for its Uniqlo stores in Japan as cold weather in the final week of October spurred demand for winter apparel.
October same-store sales, or sales at Uniqlo stores open at least a year in Japan, dropped 1.1 percent, the Yamaguchi city, Japan-based company said in a statement today. Revenue per customer fell 0.9 percent. The company’s sales in October 2009 surged 36 percent.
Fast Retailing benefited from cold weather toward the end of October, which increased demand for winter apparel, the company said. The retailer offered discounts on some of its Heattech thermal underwear last month.
The company forecast full-year net income will fall for the first time in four years, as as it faces increased competition from domestic rivals such as Aeon Co., which have introduced products similar to Uniqlo’s Heattech range. Inditex SA’s Zara and Hennes & Mauritz AB’s H&M brands are also adding stores in Japan.
Uniqlo’s same-store sales in Japan may fall 4.7 percent this fiscal year, as it expects a 9.8 percent drop in the six months ending Feb. 28, the company said last month. Comparable sales, which strip out the effect of stores open less than a year, plunged 25 percent in September, the biggest decline in more than seven years.
Fast Retailing fell 2.8 percent to 10,820 yen at the 3 p.m. close on the Tokyo Stock Exchange before the announcement. The stock has slid 38 percent this year, compared with a 12 percent decline for the broader Topix index.
It snowed in northern island of Hokkaido last month and the clothier offered discounts on the Heattech line on Oct. 23 and Oct. 24.
“Sales of winter gear went well all of a sudden” as customers weren’t ready for the weather, spokesman Daisuke Hase said in a phone interview today. Uniqlo shoppers also bought fleece jackets and products from the Ultra Light Down product line, he said.
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