For the first time, the market value of Fast retail, the parent company of the leisure clothing chain Uniqlo, has exceeded the value of Index, the group that operates Zara, among others. In terms of market capitalization, the Japanese fashion company is now at the top of the global apparel industry.
Since August, the Fast Retailing share price has risen steadily. As a result, earlier this week the retailer’s market value was the equivalent of around â¬ 85 billion, Nikkei reports. Investors particularly appreciate Fast Retailing’s focus on Asia, and in particular China, where the economy has quickly recovered from the Covid crisis. In addition, the leisure wear specialist is well positioned to capitalize on the changing habits of consumers, who tend to dress more “casually” as working from home becomes more and more common.
Fast Retailing operates approximately 2,300 Uniqlo stores around the world. Its home market, Japan, has 815 stores, with China the second largest with 791 locations. Sixty percent of all stores are in Asia, excluding Japan.
In this regard, the situation is therefore completely different from that of Zara: 70% of its stores are in Europe and the United States, markets which have been severely affected by the successive blockages. Only 20 percent of Zara’s stores are located in Asia.
Fast Retailing has also made great efforts digitally. In 2016, it launched the concept of âdigital consumer retailingâ, which consists of collecting and analyzing data from all online and physical online purchases. The Japanese company is also working with Google and other external partners to develop a production infrastructure powered by artificial intelligence.
When it comes to online sales, Fast Retailing and Inditex are no different. In the previous year, Fast Retailing increased its online share of total sales from 11.3% to 15.6%. Inditex, for its part, got 14% of its 2019 revenue from e-commerce, but the company aims to increase that share to 25% by next year.
Purely based on sales, Fast Retailing still ranks third in the fashion industry at 15.6 billion euros, after Inditex (28.2 billion euros) and H&M (18.5 billion euros). The Spanish clothing giant also continues to make significantly more profits than its Japanese rival.
Still, analysts believe Fast Retailing is better equipped to achieve future growth, especially given its extensive store network in Asia. Inditex has “only” 467 stores in China. Last October, Zara opened its largest Asian point of sale in Beijing, with a surface area of ââover 3,000 mÂ².