Fast Retailing to hold out on raising product prices
Japanese fashion retailer to boost production outside of China amid pressure from weaker yen and rising labour costs on the mainland
Uniqlo owner Fast Retailing said it would hold out on raising product prices despite the weakening of the yen and rising labour costs in China where it does much of its manufacturing, its chief financial officer Takeshi Okazaki said yesterday.
"We will have to raise prices in the future, but in terms of Japan, we would like to always be the last to raise prices among the competitors," he said.
Okazaki said the firm expected labour costs to rise 0.1 to 0.2 percentage point against sales.
Although he underscored the importance of China in its supply chain, the retailer expects to increase its manufacturing in other countries.
"Because of our high growth targets, we also have to increase the capacity outside of China as well. In terms of supply countries, the portion of China may decrease but the absolute volume will not decrease," he said.
The company, which also owns affordable luxury brands Helmut Lang, J Brand and Theory, among others, is intent on becoming the world's largest retailer in five years.
It has set an internal target to achieve turnover of 2.5 trillion yen (HK$163.2 billion) in sales by 2017, then double that amount by 2020. The Tokyo and Hong Kong-listed firm is now in fourth place after Inditex, H&M and Gap.
