Uniqlo enters profitability in Europe amidst full expansion

Uniqlo starts to reap the benefits of its development in Europe. Almost two decades after stepping its foot in the European market, the fashion distribution behemoth from Japan is staring to balance the register in the continent. The company, undergoing a full offensive in Europe, ended fiscal 2017 with a profit valued in 12.6 million euros in the region and increased 18% of its revenue.

Although Uniqlo opened its first store in Europe back in 2001, the crisis and mistakes made in some markets such as the United Kingdom by opening way too fast, weighed down its development in the continent.

During the last year, however, the company has regained speed through the entrance in other new markets like Spain, where it opened its first store in September 2017. Next year, the group will be joined by two new markets more: Denmark, where it will land during spring, and Italy, where it will step in during autumn.

In the last ended fiscal year, whose accounts have just been deposited in the Spanish Commercial Registry, Uniqlo’s European subsidiary (Uniqlo Europe) scored a revenue of 410 million euros and gained 12.6 million euros, which contrasts with the five million losses it registered the previous fiscal year.

The operating income was also positive, standing at 1.6 million euros, compared to the losses of 2.7 million euros from the previous fiscal year. The company explains that this evolution is a consequence of an increase of sales at stores, the openings of new ones and the rise of digital commerce around the continent.

The results correspond to the fiscal year ended on the 31^st of August 2017, before the company opened its first store in the Spanish market. In that sense, Unqilo claims that for the fiscal year that ends on August 31^st 2018, about nine new openings are predicted to take place, which include already the flagship in the city of Barcelona, its first store in Brussels (which opened on October 19^th 2017) and the first one in the United Kingdom outside of London, opened in Oxford instead, which was released the 24^th of October, 2017.

Unqilo operates in five European countries with half a hundred stores

Part of the expansion’s costs are already reflected in the results of 2017, among them, for instance, are the launch of e-commerce in Spain and those of the Barcelona opening. As stated in the accounts, the group’s distribution costs increased a 4%, reaching 42.2 million euros. The company had a stock account valued in 100 million euros, compared to the 95 million from the previous year.

The group provided subsidiaries with 22.9 million euros, ahead of the two million they owed them in the previous year. At the same time, the society owed other Fast Retailing companies an amount of 114.3 million euros.

“Board members are satisfied with the continued growth showed in the volume of business and profitability despite continuous investments in new markets and new stores and despite the downturn of the sterling pound against the euro and the United States dollar since June 2016”, states the company.

Uniqlo is present in five European markets with about half a hundred stores. France occupies most of the trade network, with 26 stores, followed by the United Kingdom, which hosts eleven, and then by Germany with nine. The company is also operating in Belgium with three stores, Spain with two and Sweden with one, as well as in Russia, where it works independently.