Fast Retailing’s GU, Theory see rising sales on cargo pant, smart dressing success

Fast Retailing’s regular results releases tend to focus heavily on the performance of its mega-sized global Uniqlo chain. But equally interesting is what’s happening at its smaller businesses, from the youth-focused GU chain to labels like Theory, PLST and Comptoir des Cotonniers. And for the most part, their sales improved in the latest year.

GU reported large increases in both revenue and profit in fiscal 2023, with revenue up 20% to ¥295.2 billion (€1.8bn/£1.6bn/$1.9bn) and operating profit surging 56.8% to ¥26.1 billion. 

It “was able to generate strong sales throughout the period by successfully narrowing down the number of product items on offer and strategically preparing a sufficient supply of products that captured mass fashion trends,” the company said.

That meant heavyweight sweat-wear, super-wide cargo pants, and pull-on pants, “proved especially strong”. 

The business’s selling, general and administrative expense ratio also improved “on the large rise in sales and stronger cost controls, which led to a 2.1 point improvement in the operating profit margin”.

Meanwhile, the Global Brands segment saw a 15% rise in revenue to ¥141.6 billion “and a move back into the black” after posting a business profit of ¥0.5 billion compared to a loss of ¥0.2 billion in fiscal 2022. 

That said, its operating loss jumped to ¥3 billion, wider than the ¥0.7 billion of a year earlier due to the company recording impairment losses. That was on the back of the group closing unprofitable stores and spending on structural reforms at the Comptoir des Cotonniers label. 

The Theory label did well, however. It saw “significant increases” in both revenue and profit, “which were fuelled by strong performances from the label’s Asian and Japanese operations”. 

Sales of jackets, pants, dresses, “and other ‘going-out’ attires proved particularly strong after we focused primarily on appealing the value of the brand’s core ranges,” Fast Retailing said. 

The group’s PLST label saw higher revenue and a smaller operating loss. But Comptoir des Cotonniers’ revenue fell and its operating loss widened.