Uniqlo opened its first Australian store in Melbourne in April 2014, and has expanded rapidly to now have 22 stores, with six of those opened within the past year.
Uniqlo’s net profit after tax increased from $9.7 million to $11.2 million.
Brian Walker, from consultancy the Retail Doctor Group, said Uniqlo’s pricing and style meant it was stealing sales from both department stores Myer and David Jones, discounters like Kmart, Target and Big W and even rival fast fashion groups such as H&M and Zara.
“They’ve been right on target with a millennial audience, they’ve been very aggressive on pricing… and they’re one of the best retailers in the world in always being in stock,” Mr Walker said.
“And they’ve done lots of interesting partnerships with designers and are very strong on social media. They’re also a generally very relaxed type of product – apparel and otherwise – that I think suits the Australian lifestyle.”
He said there was probably room for Uniqlo to open another 10 to 15 stores in Australia before new outlets started eating into sales at existing stores.
They’ve been right on target with a millennial audience, they’ve been very aggressive on pricing… and they’re one of the best retailers in the world in always being in stock.
Brian Walker, the Retail Doctor Group
Based on its gross sales figures, he estimated Uniqlo’s comparable or “like for like” sales were growing at about 4 to 5 per cent, which was a “strong result”.
In a sign the group is being aggressive on price, its gross profit margin (revenue minus the cost of goods) slipped from a 58 per cent mark up last year to 42 per cent, its Australian accounts show.
Uniqlo has found success across the globe selling affordable wardrobe staples, generating revenue world wide of 1.9 trillion yen ($24 billion) in the year to August. Its Australian tax bill rose from $3.2 million to $6.7 million.
The arrival of Uniqlo, H&M and Zara in Australia since 2012 has had a seismic impact on Australia’s apparel market.
The three fast-fashion groups reported combined sales of around $922 million in 2018, and have accounted for 17 per cent of incremental growth in the nation’s $43 billion apparel market over the past seven years, according to UBS.
Business reporter at The Age and Sydney Morning Herald.