Yesterday, I caught an interesting piece from Reuters on one of my favorite companies, Fast Retailing (OTC BB: FRCOF.PK). Since the article focused on the Japanese company's U.S. expansion, I couldn't resist checking up on the company's fortunes.
Fast Retailing isn't very well-known in the U.S. It's the company behind the Uniqlo stores and brand, as well as other brands such as Theory. Uniqlo stores are located primarily in Japan, where there are 690 of them, but there are also stores in Hong Kong, Korea, the United Kingdom, and in the U.S. in New Jersey. The company has also been operating a temporary store in the SoHo neighborhood of New York City, and it plans to open a flagship store in New York City in the next month or two. In the interim, it's offering container sales, selling items out of shipping containers on the weekends around New York City.
Fast Retailing's recent results are quite impressive. Through the first nine months of the company's fiscal year, sales are up 17.4%, operating income has risen 25.9%, and net income has increased 31.8%. These numbers, however, include a few businesses that were either acquired or consolidated in the last fiscal year. Looking at just the core Uniqlo business in Japan, the numbers are still fairly impressive, with sales up 7.4% and operating income up 21.1%.
New concepts and growth in the company's international operations will be very important in sustaining this growth. Fast Retailing has acquired a few smaller brands in the last few years. In Japan, it's launching a new brand named U.G. -- "yuji" means "freedom" in Japanese -- that is geared toward providing current styles for families at reasonable prices.
According to the recent Reuters article, the company is also interested in acquiring or investing in a U.S. retailer. On the surface, Gap
Regardless of what path Fast Retailing goes down, it seems clear that the brutally competitive retail industry will only get more difficult. In the past, Gap, Abercrombie & Fitch
Further fashionable Foolishness:
At the time of publication, Nathan Parmelee owned shares in American Eagle Outfitters. He also owns some Uniqlo fleeces, T-shirts, and other items. He has no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.