Japan’s Fast Retailing, the parent company of clothing brand Uniqlo, reported a rise in its full-year profit forecast despite challenges posed by a record-breaking heatwave in Europe that led to temporary store closures. The fashion retailer experienced strong sales across its international markets, particularly in Europe and North America, although some stores in Europe had to close or reduce hours in late June due to extreme temperatures.
During the quarter ending in May, Fast Retailing posted a 39 to 46 percent increase in net profit year-on-year, supported by strong overseas sales and new store openings in Europe and the United States. Sales in Europe maintained double-digit growth despite the adverse weather, while demand in Japan declined, partly because of an unusually cool June that reduced sales by approximately 14 percent compared to the previous year.
Chief Financial Officer Takeshi Okazaki explained that the extreme heatwave posed operational challenges, temporarily forcing a small number of European stores to close since many consumers avoided going out in the dangerous conditions. He noted that existing cooling systems in European stores were not designed to handle such unprecedented temperatures. The company said all stores have since resumed normal operations.
Fast Retailing is reviewing its ability to restart operations quickly after such closures and is exploring improvements in air conditioning for its European outlets. The company also intends to continue focusing on developing breathable, lightweight clothing suited to hotter weather, building on its expertise from Japan’s humid summers.
Despite difficulties, the firm raised its full-year operating profit forecast to 730 billion yen (£3.37 billion), anticipating a fifth consecutive year of record results, which would position it as the world’s second-largest fashion retailer behind Inditex, owner of Zara. The company’s worldwide store network now includes over 3,600 locations across 25 countries. In the UK, Uniqlo has been expanding aggressively, with plans for new stores in Manchester, Cambridge, and Leeds.
Fast Retailing’s outlook in Japan, however, is less optimistic. Okazaki highlighted concerns about the rapidly weakening yen, which fell to a 40-year low, potentially dampening profitability in the fourth quarter. The currency’s depreciation could make cost management more difficult and impact overall earnings.
The heatwave’s effects were felt across other retailers as well. In the UK, baker Greggs temporarily closed 11 shops, while Marks and Spencer faced store refrigeration breakdowns and is reevaluating its plans for increasingly frequent high temperatures. Rival retailer H&M has publicly committed to adapting its clothing lines and marketing strategies to account for longer and warmer summers.
Additional external challenges include disruptions in air freight due to the conflict in Iran and rising oil prices, which could increase costs for synthetic fibers. However, Fast Retailing reports that such geopolitical developments have not yet significantly affected its operations.
Founded in 1963 by Tadashi Yanai, Japan’s richest person and current chairman of Fast Retailing, the company has grown from a single menswear store in Hiroshima into a major global retail group known for its minimalist and affordable apparel.