‘Uniqlo boom underway’: Australians flock to Japanese brand as owner Fast Retailing upgrades profit forecast

Uniqlo’s Australian stores have been among the top performers for its Japanese owner — bucking the retail malaise gripping the nation amid rising interest rates, steeper fuel prices and a general cost crisis. Fast Retailing delivered a near-15 per cent revenue lift and more than a 30 per cent jump in operating profit in the six months to the end of February, it said on Friday, which it said was led by the strong performance of Uniqlo International. The Yamaguchi-headquartered company said Uniqlo’s operations in Australia, as well as Southeast Asia and India, recorded double-digit revenue and profit growth for the first-half. It expects that growth to continue into the second half. “Our decision to strategically expand winter inventory and sales floor displays contributed to the strong sales performance,” the company said of Uniqlo international. “Buoyant sales of bottoms, short-sleeved knitwear, linen shirts and other spring summer ranges also helped drive higher revenue and profit figures across all operations in the region.” Fast Retailing founder and chief executive Tadashi Yanai told analysts on a call that “a global Uniqlo boom may be underway.” “This view is turning into a stronger conviction,” he said. Uniqlo — known for its range of elevated and technology-driven plain tees, thermals, puffer jackets and designer collaborations — has become one of Australia’s go-to stores for wardrobe staples. Among its best sellers include the AIRism cotton oversized tee, barrel leg pants and its round shoulder bag that has gone viral on social media platforms like TikTok and Instagram. Uniqlo has also collaborated with luxury British designer JW Anderson and Finnish brand Marimekko. Last year, it named Australian actor Cate Blanchett as its global brand ambassador. Founded in Yamaguchi, Japan in 1949 as a textiles manufacturer, Uniqlo opened its first Australian store in 2014 at Melbourne’s Emporium. Since then, it has grown its national footprint to 40 stores, including Perth City, Carousel, Karrinyup and Joondalup in WA. Fast Retailing upgraded its full-year outlook for operating profit to ¥700 billion ($6.2b) compared with its previous guidance of ¥650b. It sent Fast Retailing shares up to a record high on Friday. The brand — which also owns clothing brands GU, PLST, Theory and J Brands — is seemingly immune to competitive and soaring cost pressures facing other fashion retailers globally. UBS analyst Shaun Cousins expects already-crunched Australians to further reduce discretionary spending in the coming months as higher fuel prices induced by the Iran war, coupled with recent and forecast interest rate rises, hurt budgets. “The Middle East conflict is increasing inflation for Australian consumers, initially via fuel with this expected to extend to other product categories,” he said in a note. “The 40 per cent to 74 per cent increase in unleaded/diesel fuel is a significant headwind and expected to see a reallocation of spend to essentials.”