Japan's Uniqlo operator logs record annual profit

The operator of Japanese cheap-chic clothing chain Uniqlo on Thursday, Oct 10, 2013, said its annual net profit jumped 26.1 per cent to a record as it keeps up a rapid expansion drive. -- FILE PHOTO: REUTERS
The operator of Japanese cheap-chic clothing chain Uniqlo on Thursday, Oct 10, 2013, said its annual net profit jumped 26.1 per cent to a record as it keeps up a rapid expansion drive. -- FILE PHOTO: REUTERS

TOKYO (AFP) - The operator of Japanese cheap-chic clothing chain Uniqlo on Thursday said its annual net profit jumped 26.1 per cent to a record as it keeps up a rapid expansion drive.

Fast Retailing said it earned 90.38 billion yen (S$1.2 billion) in its financial year to August, as sales surged 23.1 per cent to 1.14 trillion yen, topping the trillion-yen mark for the first time.

Last month, the company said it was branching out to Australia, with a store in Melbourne next year, as it opened a huge branch in Shanghai.

The new store openings are part of an international expansion of the company, which has more than 1,200 outlets worldwide, and follows the establishment of branches all over Asia, as well as in London and New York.

There are about 800 shops in Japan.

Uniqlo's sister brand, GU, will have a spot inside the Shanghai store, its first foray into foreign markets.

Uniqlo competes with likes of Spain's Inditex,operator of Zara, Sweden's Hennes & Mauritz AB and US giant Gap.

On Thursday, Uniqlo's operator said it expected to see profit rise by more than 30 per cent in its mainland China, Hong Kong and Taiwan business.

However, the company warned that promotional programmes for thrifty, bargain-hunting shoppers in the key Japanese market were squeezing profit margins - operating profit for shops at home slipped 5.4 per cent over the year.

Fast Retailing said it was on track to book a 92 billion yen net profit on sales of 1.33 trillion yen for the year to August 2014.

The company's Tokyo-listed shares, which are up about 58 per cent so far this year, slipped 0.57 per cent to 34,550 yen on Thursday. Its results were announced after markets closed.