Tokyo: Japan’s Fast Retailing Co Ltd said that it is planning to open Uniqlo casual clothing stores in Russia and India and acquire rivals as it aims to boost sales by 70% over the next two years.
Fast Retailing, whose Uniqlo brand has often been called the Gap Inc of Japan, has been expanding overseas while pledging to put its $1.4 billion cash pile towards acquisitions to reach 1 trillion yen in revenues by 2010.
But it has so far been unable to land a big deal, losing a bidding war for upscale retailer Barneys New York and giving up on a bid for Hong Kong apparel firm Giordano International last year.
Chief Executive Tadashi Yanai said that he wanted to take advantage of the slide in global stock markets to snap up attractive targets. “Acquisitions could be used to add about 200-300 billion yen to its group revenues,” he said.
“We are looking for acquisitions at home and overseas. It’s the opportunity of a decade. Companies are cheap in value now,” Yanai told reporters at a news conference.
“There are many that we want to buy (in Japan), it’s just that they aren’t saying yes,” he said.
Fast Retailing generates about 90% of its sales in Japan, mainly from its network of 750 Uniqlo stores selling a wide variety of basic apparel items such as fleece jackets, jeans and T-shirts at relatively inexpensive prices.
The company aims to expand its overseas network by about 2.5 times to 125 stores by 2010, allowing it to triple the sales generated by Uniqlo outside Japan to 100 billion yen.
It already has stores in the United Kingdom, the United States, South Korea and China. It plans to open stores in Singapore and Russia and is exploring a push into the fast-growing Indian retail market.
CHALLENGES AT HOME
Uniqlo stores in Japan have enjoyed relatively solid sales growth in the past year after Yanai, who has turned a small family-owned business into a major apparel chain, returned to oversee day-to-day operations to revamp the firm’s performance.
The company said on Tuesday that same-store sales at its Uniqlo stores in Japan rose 2.9% for the year ended in August, beating its own target.
But Fast Retailing faces shrinking room for further growth at home due to an ageing population and potential competition from overseas firms, including Hennes & Mauritz which plans to open its first store in Japan soon.
“With H&M’s opening, everybody - the Gap and Zara - will have come to Japan,” Yanai said, referring to Inditex’s Zara apparel chain.
Shares of Fast Retailing ended up 2.9% at 11,330 yen, outperforming a 0.6% gain in the benchmark Nikkei average.