Andrew Yong Chuan TAN’s Post

For an apparel retailer with £15bn of FY sales, >15% EBIT margins and market cap of £72bn, Fast Retailing/Uniqlo gets remarkably little attention in the western press. I challenge you to find coverage of today's 9m results, 3Q sales +7.7% cFX, GM +270bp and EBIT +31% Y/Y with margins of 18.9% +260bp, despite profits in China showing a "large decline". Its a shame because, in a world of fast fashion, there is much to admire about Uniqlo, a brand that focuses on good quality mid market basics, genuinely innovates in materials and product and invests for the long-term. In particular it is one of the very few foreign retailers which has succeeded in China (ex luxury/sporting goods), with a 2028 target of Y1tn (£bn) of sales and 3,000 stores. In a consolidating global market, Uniqlo looks a winner. Unfortunately on 4.5x EV/23/24 sales and 28x EBIT valuations are best described as being up with events!

Coincidence? Inditex earlier announced plans to develop its brand Lefties to counter SHEIN's dominance in the ultra-fast fashion segment... 💡And now, Fast Retailing plans to expand its Gen Z focus #GU brand in the United States and Europe (one store already opened in New York-soho). The concept offers clothing for women, men, children and babies with a clear focus on price (tees/tops around €7-10, pants for less than €20 for adults and many products for less than €10 for children..) 🎯From a strategic point of view and to achieve its objective of more than 60 billion euros in annual turnover, #FastRetailing must find an alternative to Uniqlo, despite its success and impressive turnover growth the past years (14.5 billion euros last year) this won’t be enough. GU currently makes €1.8 billion primarily in Japan, so it clearly seems like the upside is here in terms of growth potential internationally 📈As a reminder, #Inditex brands portfolio..is pretty unique with 3 brands over €2B besides Zara! Net sales by brand for 2022: Zara (including Zara Home): €23.76 billion Pull&Bear: €2.15 billion Massimo Dutti: €1.6 billion Bershka: €2.4 billion Stradivarius: €2.05 billion Oysho: €623 million #fastfashion #marketshare

Fast Retailing, the owner of Uniqlo, is expected to achieve record profits for the third consecutive year, driven by growth in western markets and recovery in China. The company's operating profit for the fiscal year ending in August is projected to increase by 24% to approximately US$3.2 billion, surpassing its previous forecast. Fast Retailing's stock has reached a record high, reflecting strong investor confidence. Key future considerations include sales performance of fall and winter collections in Japan and the effectiveness of strategies to revitalize the Chinese market. Analyst Mark Chadwick highlights the importance of addressing declining earnings in Greater China due to weak consumer sentiment and heightened competition. Fast Retailing operates over 900 stores in China and is viewed as a key indicator of the retail sector's health in the country. The company has shifted focus to North America and Europe during the pandemic, resulting in strong sales in these regions. Founder Tadashi Yanai aims to position Fast Retailing as the largest fashion retailer globally, emphasizing consumer preference for value over luxury post-Covid. Yanai, along with Uniqlo president Daisuke Tsukagoshi, will address the company's earnings briefing, with Tsukagoshi being considered a potential successor. Fast Retailing's shares have increased by 43% in 2024, significantly outperforming the 17% rise in the Nikkei index. #fastretailing #uniqlo #apparels

The UNIQLO market in the Chinese Mainland experienced significant declines in both revenue and operating profit due to several factors: a high comparison base from the previous year, low consumer willingness, and unfavorable weather conditions that affected product demand. Fast Retailing #chinamarket #fastfashion #japan #financialsummary

Fast Retailing Achieves Record Half-Year Earnings - https://lnkd.in/g8DSA_6A TOKYO, Apr 12 (News On Japan) - Fast Retailing, the company behind Uniqlo, reported record half-year sales for the period ending in February this year, buoyed by strong overseas performance in Europe and America, with revenues exceeding 1.59 trillion yen. According to the financial results released by Fast Retailing on April 11, the group's performance for the half-year period saw a 9% increase in sales to 1.5989 trillion yen and a 27.7% increase in net profit to 195.9 billion yen, both setting new records for this period. The success was attributed to the expansion of store numbers and growing brand recognition, particularly in Europe and America, where sales were robust. Additionally, there was high demand for functional innerwear in Southeast Asia. However, in China, sales faced challenges due to the effects of a warm winter and a decline in consumer spending, prompting the company to review its network of stores and sales strategies. In Japan, sales at existing Uniqlo stores fell by just over 3% from the same period last year due to a lack of demand for winter clothing. During a press conference on April 11, Tadashi Yanai, Chairman and President of Fast Retailing, commented on the situation: "Unfortunately, incomes are decreasing, so it's natural that people are holding back on spending," indicating his intention to keep a close eye on consumer trends. Source: NHK Source

More often than not, the news focuses on retailers that are closing locations. Let's take a moment to celebrate a retailer that's growing! Uniqlo is targeting 200 more stores by 2027. #TheRetailLawyer #Uniqlo #retailers #bricksandmortar #retail #expansion #attorneyadvertisement https://lnkd.in/eyHxG-n5

Fast Retailing’s record FY24 sees Uniqlo return to growth in home market The FY24 revenue for Uniqlo and Gu owner Fast Retailing has topped JPY3tn ($2.13bn) for the first time with an industry expert noting it was driven by its Uniqlo brand, which returned to significant growth in its home market of Japan. #JSDaily #FastRetailing #FY24

Is the Chinese online apparel seller Shein a wild success due to an innovative business model — or because of a concerted effort to skirt import duties and workers’ rights? That Shein is a modern-day e-tailing success story is not in dispute. With a focus on stylish “fast fashion,” the company was founded by Chinese entrepreneur Chris Xu in 2008, initially drop-shipping directly to overseas consumers from third-party wholesalers in China. In 2012, it came into its own as a retailer with a global, fully integrated supply chain, supported by an army of third-party suppliers that grew to their current level of more than 5,000. Revenues hit a reported $24 billion in 2022. https://buff.ly/4cHAl7Q #supplychain #logistics #cscmp

Showing continued strength, Zara parent company Inditex reported first-half sales rose 10.2 percent at constant currency, or 7.2 percent on a reported basis, continuing the momentum from the first quarter of the year. That puts the number slightly ahead of analysts expectations, which had seen them ringing in at 7 percent. Sales reached 18.1 billion euros in the six months ended July 31. There’s continued momentum going into the next season. Sales between Aug. 1 and Sept. 8 gained 11 percent at constant currency over the same period in 2023. Read more here : https://lnkd.in/eeRB82kW

What’s behind Inditex's continued success? Here are 3 key reasons in my opinion... ❇ Shift to a More Premium Image for #Zara To safeguard its flagship brand, which contributed 72% of Inditex's total revenue in 2023, Zara has been gradually shifting towards a more premium positioning to avoid compete with ultra-fast fashion players like SHEIN, Temu, and Primark. Zara is refining its image through minimalist store designs, limited-edition collections, and the use of higher-quality materials. This strategy not only elevates the brand’s fashion appeal but also helps maintain affordability while distinguishing Zara in a crowded market. Zara’s growing digital presence further solidifies its premium positioning. It is the third most-followed brand on Instagram with 62 million followers, trailing only Nike and Victoria’s Secret, and second on TikTok with 11 million followers, just behind Louis Vuitton. This strong social media presence amplifies its global appeal and allows it to connect with a fashion-forward audience. 🔥 Inditex Open Platform (IOP) #Inditex has invested billions in developing the Inditex Open Platform (IOP), a cornerstone of its operational efficiency and customer experience. IOP is an integrated digital platform that connects inventory, logistics, and sales across both online and physical stores in real-time, streamlining operations across all Inditex brands. This platform allows Inditex to optimize stock management, reduce delivery times, and offer services like store-to-door shipping and seamless returns. By integrating advanced data analytics, IOP enhances decision-making, efficiency, and overall customer satisfaction, contributing significantly to Inditex’s continued success. 🏁 Nearshoring Sourcing Strategy Inditex’s nearshoring strategy has been instrumental in its ability to respond quickly to market trends. The company sources over 50% of its production from regions close to its headquarters in Spain, such as Portugal, Morocco, and Turkey. This proximity to key markets allows Inditex to produce goods more quickly and replenish stock based on real-time demand, reducing lead times and increasing flexibility. By nearshoring, Inditex can react swiftly to changing consumer preferences and avoid the long lead times associated with far-shore sourcing in regions like Asia. This strategy, combined with its agile supply chain, helps Inditex maintain a competitive edge in the fast-paced fashion industry. #brandimage #valueproposition #retailtech #supplychain