Clothing Giant, UNIQLO: Another Example Of Japan'S "Unable To Return To The Sky"

UNIQLO is famous for its events. But according to the profit report, profit making is huge and it is hard to save the situation.

Let's take a look at the details below.

Japan's cheap clothing brand

The price increase in 2014 supported Prime Minister Abe Shinzo's efforts to boost the depressed economy: even with cheap confidence, even cheap clothing suppliers could set prices.

But Andouble's expansionist policies were hard to revive. UNIQLO chose to cut prices last year and again increased the discount in the first two months of this year.

The fast selling of UNIQLO's parent company has now become an increasingly bleak business prospect. Indirect costs remain high, consumer enthusiasm is cooling and price declines drag down corporate performance.

"The situation looks bad, very bad," said Liu Jing, chief executive of Fast Retailing, after the company announced its quarterly results on Thursday.

The Bank of Japan unexpectedly implemented negative interest rates in January, intended to revive businesses and consumers, but failed to boost sales and stock markets, and failed to prevent unpopular yen appreciation.

In the 10-12 quarter of last year, Japan's economy was shrinking due to export slump and sluggish consumption. Some analysts expect the economy to shrink again in the first quarter of this year, making Japan fall into recession again.

Japanese restaurant chains and others

Similarly, fast retailing is also struggling to attract more consumers, as consumers are looking for discounts.

Its parity brand GU is a rare bright spot.

"If wages are about to rise, consumers will be able to accept some kind of raise.

But wages did not increase, so the propensity to save was strong, "says Yoshiki Shinke, chief economist at the first Institute of life economics.

Ryui Masa's Fast Retailing launched a large-scale overseas expansion.

He said he plans to open 100 stores in the United States in the next few years.

But fast selling, especially uniqo, is in a difficult situation abroad, as competitors like Gap (GPS.N) are already ingrained and are facing the price competition of fast fashion brands such as H&M (HMb.ST) and Inditex (ITX.MC)'s Zara.

Over the past six months, UNIQLO's losses in the US market have widened, and the company has closed some stores.

These resulted in the operation of Fast Retailing in the three months ended February.

Cut to 23 billion 400 million yen (US $215 million), less than half the market expected.

The company has slashed its annual forecast for the second time this year, and now focuses on cutting production costs.