Fast-fashion giant Uniqlo based in Japan has released their latest financials. The brand which is catching on quickly across youth culture markets in the United States (see also our Fall Youth Culture Study 2013), has also just released their puffy jacket campaign that showcases how these cushy, soft winter outerwear can fit into the size of a small satchel for easy storage.
Uniqlo Japan, which constitutes 59.8% of consolidated and 72.9% of operating income, generated a significant 10.2% year-on-year gain in net sales to ¥ 683.3bln in fiscal 2013. One of the recent business focuses has been to boost the number of customer visits to our stores. In fiscal 2013, they successfully boosted customer numbers by 12% year on year by aggressively increasing the number of TV commercials featuring core ranges such as HEATTECH winter innerwear, Ultra Light Down, Ultra Stretch Jeans, AIRism summer innerwear, Steteco and Relaco light-weight clothing, and also by expanding the distribution of paper fliers.
However, on the income side, the aggressive promotional drive ultimately led to a deterioration in the gross profit margin because so many customers were attracted by the featured discounted ranges. This, along with the traditional season-end discounting of excess stock, resulted in a 1.8-point decline in the gross margin at UNIQLO Japan in fiscal 2013.
UNIQLO International generated considerable gains in both revenue and income in fiscal 2013 with sales rising 64.0% year on year to ¥ 251.1bln and operating income expanding by 66.8% to ¥ 18.3bln. The UNIQLO International store network expanded by 154 stores over the business year, reaching a total of 446 stores at end August 2013. The Asian region encompassing China, Hong Kong and Taiwan performed especially well with 102 new stores opening for business, sales expanding to ¥ 125.0bln and operating income swelling to ¥ 13.5bln in fiscal 2013.
At other global UNIQLO operations, UNIQLO Europe (United Kingdom, France and Russia) broke roughly even in fiscal 2013 as expected.
Sales at UNIQLO USA expanded with the opening of a further four new stores in prominent malls during fiscal 2013. However, operating income fell short of target with the current operating loss hovering stubbornly close to the previous year’s level. There were several reasons why they were unable to reduce the operating loss at UNIQLO USA, including unseasonal weather in the second half, some advance business expenses related to the opening of 10 new stores in fall 2013, and the fact that the operating loss appeared higher in yen terms following the weakening of the Japanese currency.
Nike Projects $10 Billion in Apparel Sales by 2017
The athletic giant has recently announced that it plans to target $36 billion in annual sales in 3 years with $10 billion in apparel by 2017. This came during an analyst meeting earlier this week about Nike’s plans for growth and projections.
On Wednesday, October 9, 2013, Nike executives said they projected company revenues to grow 19% reaching $30 billion, and up to $36 billion by 2017 especially with its fresh goals for targeting China. Like many brands, especially in the youth culture space, China’s become the huge new marketplace for many.
“China is in reset mode, but we’re really focused on the great position we have there,” said Nike CEO Mark Parker, according to the Associated Press. “It remains one of our biggest growth areas.”
Nike also said it expects $1 billion in basketball-related sales through to 2017. Other areas they are focusing on include ecommerce which is clearly beating out retail in many demographics. They anticipate $5 billion in direct-to-consumer sales by 2015 and up to $8 billion by 2017.
