Japan'S Domestic Market: Warm Winter + Price Increase

In the past six months, the performance of the fast retailing group's main brand, UNIQLO, has disappointed investors.

In the Japanese market, the revenue and net profit of UNIQLO declined, operating income fell 0.2% to 453 billion 600 million yen (27 billion 34 million yuan) compared with the same period last year, while operating profit dropped 28.3% to 64 billion 100 million yen (about 3 billion 820 million yuan).

CFO Okazaki explained at the first quarter conference that the commodity composition of UNIQLO did not take into account the element of warm winter.

Due to the failure to fully convey the characteristics and freshness of the products to customers, coupled with the large proportion of cold proof clothing in the commodities, it is unable to cope with the winter climate anomalies and warm weather in a timely manner. The sales performance in November and December is relatively poor, while the same store sales decreased by 1.9% over the same period last year.

In January 2016 and February, the gross profit margin declined by 3.5 percentage points in the first half of this year.

Guo Zengli, director of the Development Committee of China shopping union shopping center, said that for UNIQLO, adjusting the supply structure, returning to the popular service concept, and expanding the crowd base with its consistently respected basic lifestyle and public consumption price will produce some positive results in the short term.

"Suffer from

The impact of the downturn, plus labor costs, property rents, procurement costs and other improvements, will affect any scale enterprise, and may also appear despite the expansion of the brand store size, but brand profit has a reverse pressure phenomenon.

In particular, such a large-scale enterprise like UNIQLO will be more obvious than that of small businesses, or even a drop in profits. "

In addition, due to the rising cost of raw materials, UNIQLO began adjusting commodity prices in the autumn and winter of 2014, up 5% in 2014 and 10% in 2015.

Obviously, the price adjustment is right.

Domestic passenger traffic and revenue had a direct impact, which was reflected in the first quarter of this fiscal year, although UNIQLO said that the impact of price increases was limited, but in the period covered by the current financial report, that is, from September last year to February this year, the flow rate of gifted library stores rose only in October last year.

Subsequently, Ryui Masa, chairman and President of fast marketing, acknowledged this trend.

He reflected: "from the perspective of customer needs, we must pay attention to price, quality and fashion."

He plans to restore the price system that is easy for customers to buy.

After the announcement of the earnings report, Liu well stressed at a press conference held in Tokyo, Japan, that the number of weekend price cuts would be reduced in the future, instead of lowering the usual price to restore "the leading position of UNIQLO in fashion and price".

In the future, the company will fix its price in a simple and clear price like "1990 yen" and "2990 yen".

"We hope to keep the price consistent with the usual price, and maintain the lowest price as far as possible."