The Latest Report Of UNIQLO'S Weak Earnings Is Concerned About Price Adjustment.

Japan's fast - growing giant UNIQLO suffered a tough winter in its latest earnings season.

Analysts pointed out that poor local market performance and improper business strategy were the main reasons for the weak performance of UNIQLO.

As a "fast fashion" representative, UNIQLO will pay attention to whether the price strategy will be adjusted and the pace of expansion will slow down.

Achievement winter

The parent company's fast selling company released its first half of fiscal year 2015 in April.

As of February 29, 2016, the net profit of the group declined by 55.1% compared with the same period last year, which was only 47 billion yen (about 2 billion 800 million yuan).

It is reported that this is the first half year net profit decline in the past 5 years.

In January this year, winter clothing price promotions and other measures increased sales revenue by 6.5% to 10116 billion yen, but profit margins declined, especially overseas business profits below targets.

Data show that in the first half of fiscal year 2015, Japan was still the main market, while overseas market revenue increased by 12.7% compared with the same period last year, but operating profit fell 31.4%.

At the same time, Xun group also lowered its performance expectations for the 2015 fiscal year ending August. The operating profit was reduced from 180 billion yen (about 10 billion 26 million yuan) announced in January this year to 120 billion yen (about 7 billion 152 million yuan), which is 27.01% lower than that of the previous fiscal year.

Annual net profit is also expected to drop from 110 billion yen to 60 billion yen.

In fact, the profitability of UNIQLO began to slow down in 2015. Meanwhile, the repeated losses in the local market caused a very bad growth or even retrogression in the same store sales.

Liu Jing, chairman and chief executive of Fast Retailing, is in an interview with the media.

Over the years, high-speed growth has led to a deviation in the strategy of the group. Therefore, since last year, the group has adopted a price raising strategy aimed at providing more powerful help for brand growth.

However, this strategy failed.

Ryui Masa said that UNIQLO would lower its product prices and reactivate the "simple pricing" mechanism recently, and stressed repeatedly that "the price increase in recent years is wrong."

In the future, we will reduce the number of previous weekend markdowns, and instead use the usual price reduction to restore UNIQLO's leading position in fashion and price.

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Rapid elimination giant

Mention UNIQLO, had to mention its president Liu Jing Zheng.

Ryui Masa was born in the "clothing family". Many relatives ran clothing stores in Kyushu or Yamaguchi Prefecture. His father, Liu Jing, also opened a men's clothing store "small county business" in 1949, mainly selling suits, many customers are looking for decent bank or securities industry.

Ryui Masaari, an elder sister and two younger sister, is the only child in his family. He has been very strict with his father.

After graduating from high school, he decided to leave home and apply for the political and Economic Department of Waseda University in Tokyo. He studied alone in Tokyo for four years.

After graduating from the famous department store JUSCO for 9 months, he felt as if he could not find a clear direction and goal. He resigned and went back to his hometown to inherit his father's career.

Because of the work experience of Jia Shi, Ryui Masa felt that the commodity ratio and the process equivalence rate of the small county business were too poor, though it was profitable, it was hard to make big money.

Young and energetic, he began to manage the store in his own way. However, the old employees could not accept it, so they left one after another. Only one of the six employees left behind. From the purchase, inventory, sale and cleaning, two people arranged all the work, and the degree of fatigue could be known.

In 1984, Ryui Masa formally inherited his father's business and became president of small county commercial affairs. His career has also come to a real turning point.

At that time, the luxury of Japanese society prevailed. Liu Jing was looking at the common people and decided to fight for cheap and daily clothing sales.

In June 2nd of the same year, he opened the first "UNIQLO" store in Hiroshima, but the name was "UniqueClothingWarehouse", which was welcomed by all circles.

In 1991, Liu well renamed the "small county business" as "fast selling", and took it as the company's aim to create "fashion fast food".

In 1994, the company went public in Hiroshima.

In 1998, the slogan of "1900 yen and one casual wear" made UNIQLO popular in the hearts of the people. In the Japanese clothing market of tens of thousands of yen, UNIQLO had a whirlwind and sold 2 million pieces in one year.

After that, Liu was looking abroad, and UNIQLO grew into a multinational company.

Past glory

UNIQLO, who is committed to becoming an international giant, attaches great importance to the Chinese market.

But shortly after entering China, UNIQLO suffered SARS in 2003, and consumers were reluctant to go shopping.

Since then, brands such as ZARA, H&M, C&A and GAP have entered the Chinese market one after another, and UNIQLO faces greater competition.

Industry insiders point out that at present, the retail model of several international fashion brands on the market is almost the SPA model, which is the winning magic weapon to beat the traditional apparel companies.

Among them, UNIQLO is considered to be one of the most successful companies to use this business model.

The SPA model was first put forward by GAP, an American clothing giant in 1986. Ryui Masa's UNIQLO library promoted it: including raw materials procurement, planning, design, development, production, logistics, sales, inventory management, and so on.

In fact, even earlier, in order to lower the retail price, UNIQLO pferred its production to mainland China in the 90s of last century.

Such a model was not initially recognized in such a traditional society as Japan.

Like the Chinese market, according to the practice of apparel retailing,

There are usually several agents or wholesalers who "divide" profits with manufacturers.

UNIQLO's practice was once attacked in Japan, but Liu Jing, who did not take the unusual road, insisted that UNIQLO was developing rapidly.

People find that the price of clothes is becoming cheaper and cheaper, and they do not need quarterly discounts and holiday promotions.

From sales and performance, the fleece sold in autumn and winter in 1998 pushed the UNIQLO to its peak, which sold 2 million pieces a year.

In the second year, UNIQLO made a TV advertisement for it. It originally expected to sell 6 million pieces of fleece sweater, and sold 8 million 500 thousand pieces. By autumn and winter of 2000, 12 million sales were expected to be sold, and finally 26 million pieces were sold.

Star products pushed UNIQLO to its peak, and its performance began to ride on roller coaster.

In August 2001, the total sales volume of the company reached 418 billion 500 million yen (about 24 billion 480 million yuan), and the pre tax profit was 103 billion 200 million yen (about 6 billion 40 million yuan), which was very alarming in that year.