Following today’s release of Fast Retailing figures for H1 FY2020/21; Pippa Stephens, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Fast Retailing has reported yet another impressive set of results, with its strong Asian presence and specialism in casualwear causing group revenue to fall by only ¥5.6bn to ¥1,203bn during H1 FY2020/21, despite the negative impact of COVID-19. This slight revenue decline was primarily driven by its European and North American operations, which have been particularly badly hit by the pandemic in recent months, with national lockdowns forcing Fast Retailing to temporarily shutter many of its stores in these regions. Though a third wave of the virus throughout mainland Europe is likely to cause Fast Retailing further challenges over the coming weeks, the fast vaccine rollout across the US and UK will be highly beneficial to its performance, as not only will this give consumers greater confidence to visit physical stores again, but the recommencement of social occasions will also provide shoppers with more reasons to purchase new outfits.
“While Fast Retailing has experienced particularly strong sales of its loungewear products over the past six months, as the pandemic led consumers to seek comfortable clothing while spending most of their time at home, the gradual return to normality will cause shopping habits to shift once again. Though casualwear is expected to remain popular, Fast Retailing must ensure that it has some flexibility within its range planning so it can successfully cater to consumers’ changing needs as lockdowns are slowly lifted. Some of Fast Retailing’s smaller brands have performed particularly poorly amid COVID-19, including Theory, which has experienced significantly reduced demand due to its formalwear specialism. Since increased home working is now expected to be a long-term trend, and consumers have now got used to more casual attire, this retailer is likely to have a slow recovery unless it drastically pivots the focus of its ranges.
“Regular partnerships have allowed Fast Retailing to retain top of mind appeal in recent months, with Uniqlo’s repeat collaborations with designers like JW Anderson and Marimekko driving heightened interest in the brand. In March 2021, Fast Retailing also signed a deal with the Japanese second-hand online marketplace Mercari, allowing it to tap into the thriving resale market. This agreement will allow Fast Retailing to share product and launch information with the platform to create a better shopping environment, so the retailer should also feature details of this on its social media and website to drive greater awareness among consumers.”