Fast Fashion UNIQLO Parent Company'S Sales Rose Three In The First Quarter Of 6.4%.

Japan

The parent company Xun Marketing Group announced today's sales figures for the first three quarters of the year ended May. During the period, the group's sales revenue rose by 6.4% to $12 billion 480 million, but pre tax profits fell sharply by 46.4% to 617 million dollars, and business profits fell 23% to $1 billion 270 million.

In the first three quarters, among the three branches of UNIQLO, overseas UNIQLO and global brands,

Driven by the fashion casual wear brand GU, business revenue and profits both recorded growth, while Japan UNIQLO and overseas UNIQLO business revenue increased, but profits declined.

Group sales rose 18.6% in the third quarter to $4 billion 640 million. Over the past few weeks, profits from UNIQLO have rebounded in the past few weeks, thanks to the simple price reduction mechanism. The rise of skirt fashion has led to a rise in sales of UNIQLO clothing.

During the third quarter, Japanese and overseas UNIQLO sales revenue and profits recorded an increase, pushing the rapid sales revenue in the quarter up 6.2% over the same period last year, and operating profit increased 18.6% year-on-year.

Among them, the profit of UNIQLO in Greater China has also increased. Korea's profit has declined in a depressed economic environment and increasingly fierce competition, while the United States has run a deficit and has closed some smaller shops in UNIQLO.

In terms of global brands, the GU fashion casual wear brand continues to grow at a high rate. With the strong sales of main products such as skirts and long T-shirts, the same store sales have recorded double-digit growth.

Although the group's annual operating profit and revenue objectives have not changed, the group has lowered its net profit target.

Under the current exchange rate, the group forecast will lose 4.17 US dollars. The Group expects net profit for the year ending August 31st to drop by 59.1% to 400 million US dollars, much lower than the 533 million US dollar forecast, and annual sales are expected to grow 7% to 16 billion US dollars.

After releasing the disappointing sales figures in the first half of the year, XXX decided to make a substantial reduction in UNIQLO products to promote sales growth. However, sales data in the previous September made the group realize that the price reduction would lead to the adverse consequences of falling profits.

Ryui Masa, chairman and CEO of XXX group, pointed out that UNIQLO will return to its previous simple low price mechanism. After a retail market survey, the pricing mechanism of price rise in the past two years is no longer feasible. Consumers are unwilling to buy products at a higher price. At present, the environment of fashion retailing is very difficult.

In the fast fashion camp, it is not just UNIQLO that the price cuts are made. In view of the strong pressure from rival ZARA Inditex group, Sweden fast fashion H&M group said it will follow the market trend and further adjust the price.

Fast fashion, which relies on poor quality and low price, has been developing rapidly in recent years. It is facing severe challenges. Profits in the first half of the H&M fell by 21.5% to 945 million 500 thousand dollars, and pre tax profits plummeted 22% to 1 billion 240 million dollars. During that period, turnover grew by 5% to 12 billion 560 million US dollars, which is close to double-digit growth compared with the same quarter last year. Obviously, H&M has entered a channel of performance slowdown.

In today's fast fashion retail market, the trend is changing rapidly, and the impact of climate fluctuation is even greater. This also makes ZARA the core of competitive advantage.

Some analysts have pointed out that ZARA, which is able to adapt to climate change and make rapid adjustments, is panicking the fast fashion brands including GAP, H&M and UNIQLO.

The rapid growth of fast fashion has begun to show signs of fatigue. Brands are considering adjusting their product structure. In China, with the fast fashion market becoming more and more saturated, in order to maintain high growth performance, fast fashion or price war will break out.

In May this year, the implementation of price cuts by ZARA in the India market may be a price test for emerging market products including China.