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 But as Abe's expansionary policies struggle to rekindle growth,
Uniqlo has reversed those rises, lowering prices last year and
stepping up discounts again in the first two months of this year.
The brand's owner, Fast Retailing Co Ltd <9983.T>, now illustrates a
bleaker picture of a corporate sector squeezed by sticky overhead
costs, cooling consumer enthusiasm and lower prices.
"Things aren't looking good - they're rather bad," Tadashi Yanai,
the group's charismatic CEO told reporters after the retailer
reported quarterly earnings on Thursday.
A stunning move by the Bank of Japan to introduce negative interest
rates in January to try to get companies and consumers spending
again has yet to boost sales, stock prices <.N225> or arrest an
unwelcome rise in the yen <JPY=>.
Japan's economy shrank in October-December on weak exports and
lackluster consumption, and some analysts expect it to have
contracted again in the first quarter of this year, pushing the
country back into recession.
Like Japan's restaurant chains and rival retailers, Fast Retailing
is struggling to drive more consumers to its tills, as the same
consumers who buoyed Louis Vuitton sales during the boom years now
rifle through its racks for discounts on down jackets. A rare bright
spot was GU, its value brand.
"If wage increases were on the horizon, consumers would be able to
accept some price increases. But wages aren't going up, so there's a
strong propensity to save," said Yoshiki Shinke, chief economist at
Dai-ichi Life Research Institute.
CUTS OUTLOOK
Yanai, whose group is Japan's largest clothing retailer and has made
him the country's wealthiest man, still has plans to make it one of
the world's biggest brands.
The group has made a major push overseas.
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The CEO, who also presides over brands including Comptoir des
Cotonniers and J Brand, says he aims to open 100 Uniqlo stores in
the United States, the world's biggest clothing market, over the
next few years.
But the group, and Uniqlo in particular, have struggled overseas in
a crowded market where rivals such as Gap Inc <GPS.N> are already
well established, and where it faces price competition from
fast-fashion brands such as H&M <HMb.ST> and Inditex's <ITX.MC> Zara.
Losses from Uniqlo's operations in the U.S. market widened in the
past six months, as it closed stores.
That and troubles at home left the company with an operating profit
for the three months to February that more than halved to 23.4
billion yen ($215 million) - less than half the market forecast. It
slashed its full-year outlook for the second time this year, and is
now focusing on cutting production costs.
Shares fell more than 11 percent by midday on Friday, to their
lowest level in more than three years.
(Reporting by Ritsuko Ando, with additional reporting by Kaori
Kaneko; Editing by Clara Ferreira-Marques and Ian Geoghegan)
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