Quick Retailing, the guardian firm of Japanese attire big Uniqlo, mentioned on Thursday that its first-quarter internet earnings fell 9.1% because of the COVID-19 lockdown in China.
The retail big reported internet earnings of 85 billion yen for September to November 2022 however left its 230 billion yen forecast unchanged for 2022-2023.
“The outcome was primarily as a result of a pointy decline in income in our Uniqlo operation within the mainland China market attributable to motion restrictions as a result of COVID-19,” the corporate mentioned in a press release.
Revenue for worldwide enterprise additionally declined because of the “non permanent suspension of operations in Russia,” it added.
However except for China and Japan, Uniqlo’s enterprise “has been performing very properly,” he mentioned.
Gross sales rose 14.2% to 716.4 billion yen, however working revenue fell 2.0% to 117 billion yen.
Takeshi Okazaki, chief monetary officer of Quick Retailing, mentioned the corporate has skilled a change of fortune in China in latest months.
“Our gross sales noticed a brief uptick when China’s pandemic restrictions had been eased in December, however dropped once more after folks in lots of components of the nation started refraining from going out in mid-December,” he instructed ai journalists.
“Since January, gross sales have began to develop quickly once more. The scenario in China has modified dramatically within the area of a month.”
He mentioned he anticipated the corporate to get again “on the highway to development” within the mainland as folks transfer in direction of residing with Covid.
After years of aggressive international growth, Quick Retailing is likely one of the largest clothes retailers on the planet, rivaling Spanish big Inditex, which owns Zara, and Sweden’s H&M.
Along with Uniqlo, it owns American clothes model Idea, French Comptoir des Cotonniers and lingerie model Princesse Tam Tam.
On Wednesday, Quick Retailing introduced it would increase the salaries of hundreds of workers in Japan by as much as 40%.
The transfer will increase labor prices by about 15%, however Okazaki mentioned Quick Retailing expects to reap the rewards.
“The expansion of each single worker will lead to an enchancment within the competitiveness of our firm,” he mentioned.
© 2023 AFP