fbpx
Climate crisis and migration: Greta Thunberg supports International Organization for Migration (IOM) over ‘life and death’ issueRead more United Nations (UN) Convenes Lake Chad Countries, Amid Growing Regional CrisisRead more 11 Disruptive Startups Selected for Cohort 3 of the Africa Startup Initiative Program (ASIP) Accelerator Program powered by Startupbootcamp AfricaRead more Africa Data Centres breaks ground on new Sameer facility in NairobiRead more Coffee with a human face: A union that improves livelihoods for Ugandan farmersRead more Trends Predicted to drive the retail industry in 2023Read more Vantage Capital exits Pétro IvoireRead more Afrobarometer charts path for Round 10 surveysRead more Unified communication and collaboration trends for 2023 (By David Meintjes)Read more 2023 starts with BIG IMPACT on Bizcommunity!Read more

China lockdown hits Uniqlo parent’s first-quarter profit

show caption
Fast Retailing, the parent company of clothing giant Uniqlo, said its net profit for the first quarter slid 9.1 percent because of China's Covid lockdowns./AFP
Print Friendly and PDF

Jan 12, 2023 - 12:28 PM

TOKYO, JAPAN — Fast Retailing, the parent company of Japanese clothing giant Uniqlo, said Thursday its net profit for the first quarter slid 9.1 percent because of the Covid-19 lockdown in China.

The retail behemoth reported 85 billion yen ($645 million) net profit from September to November 2022 but left unchanged its forecast of 230 billion yen for 2022 to 2023.

“(The) result was due primarily to a large decline in profits at our Uniqlo operation in the mainland China market caused by Covid-19 restrictions on movement,” the company said in a statement.

Profit for international business also declined because of “the temporary suspension of operations in Russia”, it added.

But with the exception of China and Japan, Uniqlo business “performed strongly”, it said.

Sales grew 14.2 percent to 716.4 billion yen but operating profit dipped 2.0 percent to 117 billion yen.

Fast Retailing chief financial officer Takeshi Okazaki said the firm had experienced changing fortunes in China in recent months.

“Our sales saw a temporary boost as China’s pandemic restrictions were eased in December, but they declined again after people in many parts of the country started to refrain from going out in mid-December,” he told reporters.

“Since January, sales started picking up rapidly again. The situation in China has been drastically changing in the span of a month.”

He said he expected the firm would get “back on the path to growth” in the mainland as people moved towards living with Covid.

Following years of aggressive global expansion, Fast Retailing is one of the world’s biggest clothing retailers, rivalling Spanish giant Inditex, which owns Zara, and Sweden’s H&M.

As well as Uniqlo, it owns American clothing brand Theory, France’s Comptoir des Cotonniers and lingerie label Princesse Tam Tam.

On Wednesday, Fast Retailing announced it will increase the salaries for thousands of employees in Japan by up to 40 percent.

The move will raise its labour costs by around 15 percent, but Okazaki said Fast Retailing expects to reap the rewards.

“The growth of each individual employee will result in improving the competitiveness of our company,” he said.

MAORANDCITIES.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.