Thirty stores. That is all that remained shut of Uniqlo’s 750 outlets in China as of 16 March 2020, Reuters reported, after Fast Retailing told the news agency that most of its shops outside Hubei province had reopened. Hubei is the epicentre of the coronavirus outbreak.
A month earlier the picture looked very different. Uniqlo had closed about 350 of its casual clothing stores in China, along with some partner factories, and investors worried about a major hit to profits. China has been a key growth market for the Japanese company, which faces a saturated home market and weak consumer spending in Japan.
From 370 closed to 30
The Global Times, a Chinese state-run paper, had tracked the same recovery in late February. It reported that 370 Uniqlo shops were closed on 7 February, when the epidemic was at its height. By the last week of February, media reports put the number still shut at 150, or 20 percent of the chain. Other foreign retailers were moving the same way. IKEA announced that some of its stores in Shanghai, Hangzhou and Wuxi would reopen from 1 March.
Shares and analysts
Fast Retailing shares closed on Monday 16 March at 46,000 yen, down nearly 30 percent since the start of the year. The same day, Jefferies raised its rating on the stock to “hold” from “underperform”, calling the company resilient and saying it had enough liquidity to survive a possible recession.
“China and Korea both appear to have gained control of the virus and many people appear to be returning to work,” analyst Michael Jon Allen said in a note to clients. He added: “We think the worst for Fast Retailing’s overseas operations is already in the past, and a slow but steady recovery has begun.”
North America still undecided
The virus was by then spreading well beyond China, and the retailer’s attention was shifting. Fast Retailing runs about 60 shops in North America. A spokeswoman said no decision had been made on closing any of them. Nike and Lululemon Athletica, by contrast, had already said they were shutting stores in the United States.
Sources
- Uniqlo owner says most shops in China outside Hubei have reopened – Reuters
- IKEA, UNIQLO, Galeries Lafayette reopen in China on large scale – Global Times
