Uniqlo owner seeks to enter India as it builds overseas reliance
New Delhi/Mumbai: Fast Retailing Co., operator of the Uniqlo casual-wear brand, has applied to open stores in India as Asia’s largest clothing chain increases its reliance on overseas markets.
The Japanese company submitted an application on 21 November seeking government approval to do business in the country under the Uniqlo brand name, according to a filing on India’s Department of Industrial Policy & Promotion website.
“India is a market with great potential,” Pei-Chi Tung, a spokeswoman for Fast Retailing, said in an email. “At the moment, we are awaiting word from the government, and we will be able to discuss potential future steps at a later date.”
Fast Retailing, which recently forecast that international sales for its Uniqlo chain will exceed those in Japan this fiscal year for the first time, has been pushing to expand overseas as wages languish and the population ages at home. The brand’s international store count surpassed the number of locations in Japan two years ago.
The company has expressed an interest in entering India since at least 2011. The move would follow Inditex SA’s Zara and Hennes & Mauritz AB in an apparel market that’s forecast by Euromonitor International to grow 29% to Rs3.76 trillion ($58 billion) by 2021. Inditex opened a flagship Zara shop in Mumbai in May, which has had a strong reception, chief executive officer Pablo Isla said in September. It recently started online sales in India.
Retail chain operators in India are benefiting from a government push to cut cash payments that is prompting shoppers to increasingly use credit cards and digital payments services. Such store networks have an advantage — in a country where per capita incomes have more than doubled in the past decade — as most small mom-and-pop stores largely take cash payment.
Fast Retailing last month reported the biggest jump in annual earnings in more than a decade, driven by a near doubling of operating profit at Uniqlo stores outside of Japan. The company, which got about 58% of its revenue from Japan in fiscal 2016, is hitting its stride in places like China and Southeast Asia. Operating profit for the brand in China jumped 37% for the year ended 31 August, compared with a 6.4% slump in Japan.
Fast Retailing was down 0.2% in morning trading in Tokyo on Friday, paring a 1.1% drop at the market’s open. The shares have lost 3.1% this year, while the benchmark Topix index has rallied 17%. Bloomberg
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