Fast Retailing Co., which runs the Uniqlo casual clothing chain, said Wednesday it will accelerate the opening of large stores across Japan, with 100 new outlets planned within the next three years.
The firm will open 20 outlets ranging in size from 1,650 sq. meters to 3,300 sq. meters in the business year to August 2008, and 40 each in the following two years.
Fast currently runs seven large outlets in Japan.
“We need to open large-scale outlets to attract new customers, while retaining existing” ones, Fast Retailing CEO Tadashi Yanai said at a news conference in Tokyo.
The company plans to open 10 outlets from September to December in major metropolitan areas, including two in Tokyo, two in Kanagawa Prefecture and three in the Kansai region.
The firm also unveiled a new company logo.
“In the past, Uniqlo used to come up in people’s mind when they heard the name Fast Retailing. But we need to enter the next stage . . . to shake ourselves from the existing Uniqlo image,” Fast Retailing’s CEO said.
Fast Retailing has been diversifying its portfolio in an effort to reach 1 trillion yen in sales and 150 billion yen in pretax profit by 2010. Of the 1 trillion yen, 60 percent is expected to come from Uniqlo.
For the remaining 40 percent, the firm is seeking new sources of revenue.
One of these is a new discount clothing chain called g.u. from the Japanese word “jiyu,” meaning freedom. The chain is a wholly-owned unit of Fast Retailing.
Yanai said the company plans to open 50 g.u. shops annually inside Daiei Inc.’s supermarkets and hopes the new brand will generate 50 billion yen in sales within three years.
Yanai said the company will try to move upmarket with the products in its Uniqlo shops, while g.u. shops will focus on cheaper products.
Analysts say the firm also needs to boost revenue from its overseas operations to attain the sales target.
Fast Retailing will open Uniqlo’s global flagship store on Nov. 10 in New York’s Soho district. At 3,300 sq. meters it will be the largest Uniqlo shop in the world.
The company has been aggressively seeking to acquire overseas retail brands, despite announcing Monday that it was giving up its offer for Hong-Kong-based Giordano International Ltd., which operates some 1,700 outlets mainly in Asia.
Uniqlo abandoned the bid after Giordano’s operating profit in the first half of fiscal 2006 fell by 25 percent compared with the previous year.
Fast Retailing said the Hong Kong retailer’s share price is too high and does not reflect the operational state of the company.
Fast Retailing will continue looking for new merger and acquisition opportunities and is ready to spend 300 billion yen to 400 billion yen on M&A, it said.
“Fast Retailing should get rid of its existing image of a company with 300 billion yen to 400 billion yen in sales that operates basic casual clothing stores” and become a global company, Yanai said.
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