TOKYO -- Uniqlo owner Fast Retailing wants to accelerate its expansion in Asia, eyeing 100 store openings a year in a bid to thrive in the era after COVID-19, its CEO told reporters on Thursday.
"Asia is and will be the world's growth center," said Fast Retailing Chairman and CEO Tadashi Yanai. "We will accelerate our expansion in the region so that we can be the overwhelming No. 1 company in Asia."
Yanai said the company now opens 40 to 50 stores every year in Asia.
"Sooner or later, the pandemic will end," Yanai told reporters. "The moment of truth will come when it's over."
But Yanai also said online commerce would be a key for further growth. To strengthen e-commerce Fast is building automated warehouses all over the world, he said.
Yanai spoke after Fast posted an operating profit of 167.9 billion yen ($1.5 billion) for the first half of this fiscal year, up 23% from a year earlier. Strong results in Japan and greater China helped the casual wear specialist to overcome the impact of the COVID-19 pandemic, with declining sales in most regions.
Fast slightly raised its forecast for the 12 months that will end in August. It now expects revenue to increase 10% from the previous fiscal year to 2.21 trillion yen, and operating profit to rise more than 70% to 255 billion yen. Previously, the forecasts were 2.2 trillion yen and 245 billion yen, respectively.
In the six-month period to the end of February the group's consolidated revenue declined 0.5% to 1.2 trillion yen compared with the same period a year ago.
Fast said Uniqlo exceeded expectations in Japan, where revenues rose 6.2% from the same period a year ago to 492.5 billion yen, while operating profit rose 36.6% to 97.8 billion yen. Online sales in Japan rose 40%.
Uniqlo's international division reported a decline in sales but a rise in profit due to better margins in East Asia. Revenue for the segment fell 3.6% year-on-year to 521.8 billion yen, while operating profit increased 25.9% to 67 billion yen.
In February, the value of Fast reached 10.87 trillion yen, topping Zara's Spanish parent Inditex as the most valuable in the global apparel industry.
Yanai said political conflict was making the business environment more difficult but declined to be drawn on controversy over the use of cotton produced in Xinjiang. Some foreign brands have stopped using cotton from the Muslim-majority region of China because of reports of human rights and labor abuses.
Fast Retailing issued a statement in August last year saying: "No Uniqlo product is manufactured in the Xinjiang region. In addition, no Uniqlo production partners subcontract to fabric mills or spinning mills in the region."
Yanai on Thursday said the company is closely monitoring the factories it has business with. But he declined to comment on related questions. "We want to stay politically neutral," said Yanai.
Fast has also recently been sucked into the unrest in Myanmar, where two supplier factories were set on fire last month. Yanai said that he expects "just a minor impact" as the apparel maker has very little business with Myanmar.