Business
Big in China and tiny in the U.S., Fast Retailing seen weathering pandemic
TOKYO/BEIJING (Reuters) – The coronavirus pandemic is shredding the global apparel industry, stripping hundreds of billions of dollars from sales and thrusting big names like J.Crew into bankruptcy protection.
While no major fashion firms have been spared, Japan’s Fast Retailing (9983.T), owner of the Uniqlo brand and not far behind the world’s No. 2 H&M (HMb.ST) in sales, looks well placed to cope with the crisis better than rivals.
That’s thanks to legions of faithful Chinese fans like 25-year-old IT worker Niu Ran, whose wardrobe is crammed with Uniqlo basics like shirts and socks and was looking for more in a post-lockdown shopping trip.
“I like Uniqlo because it’s very easy to match and the quality is not bad,” he said, waiting in line to try on pants at a Uniqlo store in Wangfujing, Beijing’s prime shopping district.
“It satisfies all my needs, so I don’t need to spend time elsewhere.”
Led by Tadashi Yanai, Japan’s richest man, Fast Retailing has expanded aggressively in China with 750 Uniqlo stores, roughly the same number in its home market.
Mainland China has all but contained domestic transmission of the coronavirus with lockdowns lifted in most areas since March and the world’s no. 2 economy is widely expected to emerge from pandemic-induced pain faster than other countries.
In other parts of Asia too, key markets such as Japan, South Korea and Taiwan have been more successful than the West in curbing the virus.
In contrast, rivals mostly focused on the U.S. market like Gap Inc (GPS.N) or far more dependent on Europe like Zara-owner and industry leader Inditex (ITX.MC) and H&M, are expected to face a longer downturn.
“Asia is going to be much faster to bounce back in terms of willingness to spend, which will favour operators with a big presence in Asia,” said Honor Strachan, retail analyst at research firm GlobalData.
“In the mature western markets across Europe, the U.S. and Canada, we expect the recovery to be long and drawn out,” she said.
GlobalData predicts the global apparel market will lose $297 billion in revenue this year due to the pandemic, with the United States accounting for 42% of that lost spending.
Of Uniqlo’s 2,260 stores globally, just 51 are in the United States. Its inability to make strides in the world’s biggest clothing market has long been seen as an Achilles heel, but for the time being it may prove a blessing.
Asia, however, accounts for three-quarters of Uniqlo’s annual revenue and Greater China alone represents 20%.
While Strachan notes H&M and Inditex are some of the most resilient players in the market, Asia & Oceania make up just 15% of H&M’s annual revenue while at Zara, its “Asia and the rest of the world” category accounts for 23% of sales.
The basics advantage
Uniqlo’s long shelf-life items like Oxford shirts for work, chinos and underwear as well as its reputation for value for money are likely to resonate with consumers grappling with lost income or less job security more than the trend-based clothing of Zara and H&M, according to analysts.
“The quality is good and designs are classic,” said Jiang Xin, an internet company employee in Beijing, one of many Chinese shoppers interviewed by Reuters who said they felt Uniqlo quality was a cut above comparably priced brands.
Although Fast Retailing warned in April operating profit could slide 44% in the year to end-August, analysts expect a quick recovery assuming key markets are not hit by a large second wave of infections. With a large proportion of items no-frills basics, it is hoping to limit discounts.
“We will be looking to gradually sell off the excess stock to normalise inventory over the next 18 months,” CFO Takeshi Okazaki said on a call with analysts in April.
Fast Retailing declined to comment further on its business outlook for this article.
Rapid growth has brought Fast Retailing almost neck and neck with H&M. Last year the Japanese firm was more profitable with net income of around $1.5 billion compared to the Swedish chain’s $1.4 billion, though its $21 billion in revenue was some $3 billion less.
And while it still has a way to go before it matches Inditex’s annual sales of $31 billion, Yanai’s long-held goal of making Fast Retailing the world’s biggest retailer has looked less far-fetched in recent years.
But for that to happen, Uniqlo will have gain market share in the United States, analysts say, adding that it may have to offer more stylish items to get there.
“They still need to find a way to compete in the U.S.,” said Jefferies analyst Michael Allen. “The current crisis doesn’t change the equation for that.”
Reporting and photo: Reuters
Business
Waste Management Corporation (WAMCO) Marks a Significant Step Towards Transforming Urban Waste Management
Waste Management Corporation (WAMCO) marked a significant step towards plastic waste management with the adoption of dedicated vehicles handed over to boost this transformation of urban waste management supported by The Coca-Cola Foundation (TCCF) and the United Nations Development Programme (UNDP) in the Maldives.
In March 2024, UNDP Maldives officially handed over a fleet of six vehicles to WAMCO, which included two electric vehicles (EVs), as part of an initiative aimed at enhancing waste management across the Greater Male’ Area (GMA). This acquisition, facilitated through the financial support of TCCF paves the way for a crucial advancement in bolstering PET collection efforts and tackling the challenge of plastic waste in the Maldives.
“This initiative marks a significant step towards boosting recycling rates and combating environmental pollution in the Maldives,” stated Pek Chuan Gan, Deputy Resident Representative of UNDP Maldives speaking at the handover ceremony. “Integrating electric vehicles into WAMCO’s fleet and improving PET recycling processes not only lowers carbon emissions but also pioneers renewable energy use in waste management. It’s a vital move for steering the Maldives towards a sustainable and renewable-powered future.”
The provision of electric vehicles marks a continuation of UNDP Maldives’ support to the Government’s vision to introduce renewable energy in key sectors such as waste management that significantly contribute to the country’s renewable energy transition ambition. By embracing clean energy solutions, such as electric vehicles in waste management practices, the Maldives can further reduce its carbon footprint and move closer to achieving its renewable energy goals.
“Utilizing eco-friendly vehicles is a pivotal change for WAMCO, signifying a major leap towards modernizing waste management in the Maldives,” remarked Mujthaba Jaleel, Managing Director, from WAMCO. “This collaboration highlights the shared commitment to environmental stewardship and the potential for such partnerships to catalyse meaningful progress in sustainability and about the positive impact these vehicles will have on our operations and the environment.”
Representatives from UNDP Maldives, WAMCO, and The Coca-Cola Foundation’s unified efforts towards a sustainable future. Photo courtesy: CIAO Advertising.
“Our commitment goes beyond just recycling; it’s about fostering a culture of sustainability,” remarked Saadia Madsbjerg, President, Coca‑Cola Foundation and VP Community Affairs. “By enhancing waste management in the Maldives, we aspire to set a benchmark for environmental stewardship.”
For The Coca-Cola Foundation, together with the stakeholders, the aim is to propel Maldives towards a future where plastic circularity is not just envisioned but actively pursued. By channelling resources and expertise into the heart of waste management, TCCF has made a sizeable contribution in enhancing and attracting investment to this crucial sector in the Maldives. This initiative is a testament to TCCF’s commitment to fostering sustainable practices and promoting the reuse and recycling of plastics, thereby reducing environmental impact, and paving the way for a circular economy.
The fleet handover event held on March 18, 2024, served as a celebration of collaboration in waste management. Representatives from UNDP Maldives, WAMCO, The Coca-Cola Foundation, government officials, and stakeholders came together to mark this significant step and reinforced their collective dedication to building a more sustainable future for the Maldives.
Coca-Cola is thrilled to unveil its official partnership with UEFA EURO 2024TM, launching an engaging promotional campaign designed to give football enthusiasts across the Maldives the extraordinary opportunity to experience the Finals live in Berlin, Germany.
This season, Coca-Cola reintroduces its iconic football-themed packaging, igniting excitement on store shelves. To join the promotion, customers need to simply open the promotional pack, find the six-digit code under the Cap (for PET bottles) or Tab (for Cans) and enter the giveaway by sending the code to 2626, with chances of winning increasing every time they send a code! Available in a variety of sizes, these packs ensure that every fan has a chance to participate.
During the promotion, six (06) couples will win a trip to experience the UEFA EURO 2024TM Final Match in Berlin, Germany with great Coca-Cola hospitality — an integral part of Coca-Cola’s initiative to deepen its connection with football fans and infuse the season with refreshing excitement. Consumers will also have a chance to win a Smartphone which is to be won every other day and branded Premia daily making it a power-packed promo.
The promotional campaign will span from May 1st to June 15th, 2024. Throughout this period, lucky draws will be conducted every other day and broadcast live on ICE TV, with the first Live Draw starting on the 11th of May 2024.
Kaushali Kusumapala, Country Director – Coca-Cola Maldives and Sri Lanka, is enthusiastic about the new partnership, stating, ” This partnership with UEFA EURO 2024TM, marks a milestone in our commitment to sports and entertainment. We’re excited to offer fans unique opportunities that showcase our dedication to enriching their experience of the tournament, one refreshing sip at a time.”.
As the tournament draws nearer, Coca-Cola will announce further exciting activities under its UEFA EURO 2024TM campaign. Fans are invited to stay engaged and participate in the ongoing promotions to enhance their chances of witnessing the zenith of European football live.
Grab a Coke, gather with friends and family, watch the UEFA EURO 2024TM matches live, and stand the chance of winning many fabulous prizes! Stay tuned to the official Coca-Cola Maldives Facebook and Instagram pages for the latest UEFA EURO 2024TM updates and promotions.
Coca-Cola has been a partner of every UEFA European Football Championship since 1988, and for more than three decades, Coca-Cola has played an essential role in the competition by uniting people and providing fans with unforgettable and innovative experiences.
The Maldives Association of Tourism Industry (MATI) held its 34th Annual General Meeting at Kurumba Maldives today, with a total of 100 members in attendance.
The day’s events began with a welcome address from the Chairman of MATI, Mr. Mohamed Umar, who also presided over the session. The agenda included an address from the Secretary General, Mr. Ahmed Nazeer, the review and approval of the minutes of the 33rd AGM, the review and adoption of the Annual Report and Financial Reports for 2023, the approval of the 2024 budget, the appointment of auditors for 2024, the welcoming of new members and election of executive board members to the two vacant positions (by-election).
In the member discussion session, the following topics were covered: the Government’s aim to reach net-zero emissions by 2023 and renewable energy generation in the Tourism Industry, new terminal of Velana International Airport and developments, employment challenges, the Industrial Relations Act and trade unions, environmental conservation and the significance of creating and executing efficient management plans for protected areas like the South Ari Marine Protected Area (SAMPA).
Following the official proceedings, the Minister of Tourism Hon. Ibrahim Faisal and the Minister of Economic Development and Trade Hon. Mohamed Saeed joined the forum. The Ministers provided remarks and engaged in a Member Q&A session. This session provided members with the chance to directly engage with the Ministers and delve into crucial industry topics. The queries focused on the Economic Outlook, forthcoming development plans and immediate challenges and issues affecting the Tourism Industry.
A video presentation was also showcased that delved into the extensive work undertaken by MATI in 2023. The video also touched upon the Tourism Industry’s performance over the past 5 years, as well as the current and projected human resource capacity of the sector.
In his closing remarks, the Secretary General highlighted the importance of collaborative efforts in addressing industry challenges and called for greater unison amongst industry stakeholders, ending with an acknowledgement of the promising start to the year in terms of arrivals.
Executive Board Members elected to the 2 vacant positions (by-election):
- Ibrahim Shareef, CEO and Managing Director of Maldives Airports Company Limited
- Renato De Olivera, General Manager of The Ritz-Carlton Maldives, Fari Islands and representative of Marriott International
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