As the coronavirus pandemic forced the closure of stores around the world, it felled some of the biggest names in retailing from J.C.Penney and Sears to Debenham and Neiman Marcus. But with lockdowns easing, shoppers are returning, more so in Asia.
Japan’s wealthiest person, Tadashi Yanai, whose Fast Retailingowns clothing brand Uniqlo, has benefited handsomely from this rebound; the billionaire has added $9.2 billion to his fortune since Forbes’ World’s Billionaires list was published in March and is now worth $28.9 billion.
With shoppers once again flocking to Uniqlo’s stores in Japan and China, shares of Yanai’s Fast Retailing are up 53% since March 19, when they hit a low this year. The two countries account for 75% of Uniqlo’s worldwide network of 2,200 stores. While Fast Retailing owns other brands such as Theory, Helmut Lang, J Brand and GU, the biggest money machine is Uniqlo, contributing 80% to the company’s $21.3 billion annual revenue.
“Retailers are doing better in Asia,” says Maureen Hinton, research director at GlobalData, a London data analytics and consulting company.
“In markets like China, where lockdowns have been removed and where there is a huge population base, there is a growing demand.”
Uniqlo shuttered half of its 748 stores in China after the lockdown was imposed in January, gradually reopening them all in late April. Meanwhile in Japan, 40% of Uniqlo’s stores were temporarily closed in May, but have since reopened. Last month, the company opened two new Uniqlo stores in Tokyo, in upscale Ginza and in the shopping hub of Harajuku.
Part of the buzz around Uniqlo was due to the June launch of AIRism, a range of face masks, which set off an online stampede that overwhelmed the company’s site. But it also lured buyers to visit the brick-and-mortar stores of the brand, which is best known for its range of affordable casual wear—women’s skirts, for example, retail from $9.90 to $39.90.
This value-for-money pricing makes Uniqlo relatively immune to economic downturns, according to Dairo Murata, senior analyst at JP Morgan in Tokyo. “Economic cycles and fashion trends do not have much impact as it’s a supplier of ordinary life clothing and rooted in real demand.”
Even so, the retailing giant isn’t likely to escape the impact of the pandemic. The company has estimated that for the fiscal year ending August 31, revenue will decline 9% to 2.09 billion yen ($19.3 billion), while operating profit is likely to be 44% lower at 145 billion yen ($1.34 billion)
Yanai, who grew up above his parents’ clothing store in a small town in Yamaguchi prefecture in southwestern Japan, has often stated that he wants Fast Retailing to become the world’s largest apparel retailer. But the company still lags Spain’s Inditex, best known for its Zara brand, which is the current number one, with annual sales of $31.6 billion as well as Sweden’s H&M with sales of $24.8 billion.
Inditex founder Amnacio Ortega is the richest apparel billionaire in the world with a net worth of $64.6 billion, but H&M’s Stefan Persson with a $16.4 billion fortune is in third place after Yanai.
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