Fast Retailing, the parent company of Uniqlo, has seen a significant impact on its sales and profits due to the coronavirus pandemic. In March, Uniqlo’s sales in Japan saw a sharp decline, with comparable sales falling 27.8% year-on-year and total sales dropping 28.1%. This decrease can be attributed to limited store access and customer concerns over Covid-19. While the average purchase per customer increased, the number of customers decreased.

On a company-wide scale, Fast Retailing’s revenues for the six months ending in February also fell. Overall revenue dropped 4.7% to ¥1.2 trillion (€10.2 billion), and operating profit experienced a 20.9% decline. Pre-tax profit fell 13.4% and net profit was down 17.2%. The company predicts an 8.8% decline in revenue for the full year, with a 43.7% decrease in operating profit. These forecasts are based on the assumption that operations will gradually return to normal from June, as the effects of the pandemic continue.

The decline in sales and profits during the first half of the year can mainly be attributed to the significant reductions at Uniqlo in South Korea, mainland China, Hong Kong, and Taiwan, which were hit by the pandemic earlier than other regions. International revenues were down 6.7%, and operating profit fell by almost 40%.

Interestingly, despite a decline in revenue for Uniqlo’s Japan operation, its profit actually increased in the domestic market. Revenues fell by 5.7%, but operating profit rose by 5.7%. The decrease in sales can be attributed to a mild winter, resulting in lower demand for cold weather clothing. However, the GU brand, which focuses on mass fashion trends, reported significant increases in revenue and profit. During the first half of the year, revenues were up by 12.9% and operating profit rose by 12%. This growth was largely driven by strong sales of knitted cardigans, matching knitwear sets, and lightweight outerwear, which were well-suited for the warm winter weather.

Useful links:
Uniqlo Official Website
Fast Retailing Official Website