Fast Retailing Co., Ltd., owner of Japan clothing brand Uniqlo among others, reported a decline in revenue but an increase in profits for the first half of the 2021 fiscal year.
Between Sept. 1 and Feb. 28, the company netted 1.2028 trillion yen ($10.98 billion) in consolidated revenue and 167 billion yen in operating profits, which represents a 22.9% year-on-year increase.
Fast Retailing attributes gain in profits to expanding Uniqlo operations in Japan and the Greater China region.
"Sales and profits in China exceeded our projections," chief financial officer Takeshi Okazaki said Thursday. "Profitability rose because we were able to limit discounts as we tried to improve our product value and branding."
Uniqlo has a roughly equal footprint in both mainland China and its home market of Japan, with 800 stores in each country, though Japan still accounts for the bulk of total revenue at 40.9% compared with the Chinese market's 25.8%.
Fast Retailing also owns Tokyo-inspired fashion line GU, higher end retailer Theory, as well as French lingerie and swimsuit vendor Princess Tam Tam.
Despite a strong start to the year, the supply chains serving the group's brands are in trouble.
Burmese factories have been thrown into chaos by the ongoing military coup in Myanmar, while Chinese manufacturers are in the process of reckoning with allegations of forced labor among Xinjiang region companies.
Fast Retailing's largest brand, Uniqlo, had a brush with controversy last year after the retailer's possible links to Xinjiang factories raised issues of forced labor.
"We are aware of reports raising concerns on the situation for Uighurs in Xinjiang," the company said in a statement last year.
"No Uniqlo product is manufactured in the Xinjiang region...and in addition, no Uniqlo production partners subcontract to fabric mills or spinning mills in the region."
Fast Retailing also refuted claims made by the Australian Strategic Policy Institute in a 2020 report that alleged the group had links to Xinjiang-based Youngor Textile Holdings and Qingdao Jifa Huajin Garment Co.
"We can confirm that we do not have any business relationships with these factories," the statement added.
