Fast Retailing has reported a drop in sales of 36% for its Uniqlo stores while operating profit fell 74% in the third quarter to May 31. In the period, revenue fell 15.2% to ¥1.545 trillion after having risen 7% a year earlier. Operating profit was down 46.6% to ¥132.38 billion and net profit fell 47.4% to ¥91.4 billion.
However, the group highlighted that total sales for the brand were up 26.2% in June for its stores in Japan and domestic website which was driven by a “higher demand for summer ranges as the temperature rose above the previous year’s level from the beginning of the month”. Uniqlo opened two new stores during the period, with Uniqlo Harajuku opening on June 5 and its largest global flagship store in Japan, Uniqlo Tokyo, launching on June 19.
“These results show just how difficult fashion trading has been during the pandemic. Uniqlo is a retailer that technically would have been perfectly placed to withstand the current disruptions. Its main markets are in Asia and sales in this part of the world recovered faster than in others. Additionally, Uniqlo's staple products are comfortable, affordable, basics - the type of items that have fared better than many others during the lockdown. Coming out of lockdown, we expect Uniqlo to bounceback as many people worry about their financial stability - according to data from Mintel's latest COVID-19 tracker dated 2nd - 9th July 2020, a third (33%) of those asked said they are financially worse off since the outbreak of COVID-19. People instead will turn to affordable stores such as Uniqlo, which is also known for selling simple but well-made clothing. Uniqlo has also been using its technical fabrics to its advantage by releasing new face masks, made from the same material used in its AIRism underwear. The masks are said to be cool and quick-drying and they flew off the shelves immediately after their release. Although the masks won't make up much of Uniqlo's bottom line, by drawing on its strength to create a product that is necessary right now, Uniqlo will be bringing potential new customers into stores who may also stop to buy a signature hoodie or some joggers.”