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Uniqlo Japan’s profit down 30 per cent, could come under pressure in China

Operating profit of Uniqlo’s Japan fell 30 per cent in the first quarter compared to the same period a year ago. Uniqlo, known for its simple and affordable clothes such as lightweight down jackets, is battling saturation in its main home market, Japan. It could also come under pressure due to a slowdown in China, where it typically logs a major proportion of its growth. Unseasonably warm weather hit sales of winter clothes.

Japan Uniqlo profit is expected to rise sharply in the second half of the year on strong cost control. Fast Retailing is the owner of Uniqlo. The retailer’s overall operating profit fell eight per cent over September to November. The domestic business is expected to record a larger-than-expected decline in profit in the first half due to the discounting.

The company will increase discounting in Greater China and South Korea to offload winter inventory. However, Uniqlo’s international business is expected to rake in strong first-half revenue and profit growth. Operating profit for the business jumped 12.6 per cent in the reported quarter, boosted by a double-digit growth in China. The firm opened 78 stores in China last fiscal year, expanding to 633 locations, while it closed four stores in Japan, ending the year with 827 stores.