Muji has a total of 1,040 stores worldwide, including 473 in Japan, and the Japanese retail industry is experiencing a new round of "cold winter".
According to fashion business news, Muji's parent company Liangpin plans to release performance data for the first half of the 2022 fiscal year last Thursday, and the performance is not very optimistic. In the first half of the fiscal year ended February 28, the group's operating income only increased by 7.1% to 244.496 billion yen, operating profit fell 19.4% to 18.854 billion yen, and net profit fell 27.5% to 14.777 billion yen.
By region, the operating income of the Japanese business increased by 2.3% to 150.619 billion yen, and the operating profit fell by 40.3% to 9.122 billion yen, mainly due to the weak sales of clothing. The performance of the international market was mixed. The growth rate of operating income in the East Asian market where China is located slowed to 8.9%, recording 71.432 billion yen, and operating profit fell 3.5% to 11.72 billion yen.
The operating income of Liangpin Plan in East Asia and Southern Oceania totaled 9.445 billion yen, a year-on-year increase of 28.4%, but operating profit decreased by 1.6% to 875 million yen. Although the European and American business rose by 57.2% to 13 billion yen, the operating loss still recorded 73 million yen.
At the same time as the announcement of the financial report data, Liangpin Plan issued a profit warning. It is expected that the group's revenue in fiscal 2022 will increase by 4% year-on-year to 470 billion yen, operating profit may decrease by 10% to 38 billion yen, and the consolidated net profit will also increase. It fell 20% to 27 billion yen, both lower than the expected data given by the group and analysts.
According to the data, in the 2021 fiscal year as of the end of August last year, the revenue of Liangpin Plan increased by 13% year-on-year to 452.3 billion yen, and the net profit recorded 33.9 billion yen, mainly due to the Japanese and Chinese consumers after the outbreak of the epidemic. Rising demand for household goods.
Nobuo Domae, president of Ryopin Planning, who took office in September last year, said that the reason for the downward revision was that Japanese clothing sales were sluggish, and most products were forced to lower prices, which damaged profit margins. According to the latest data released by the relevant Japanese departments, the local consumer confidence index for the next six months will be 32.8, down 2.4 points from February, and has deteriorated for three consecutive months.
Nobuo Domae was once seen as the successor to Fast Retailing Group CEO Yanai Masao.
Other economists expect Japan's annual major consumer price index to rise by 1.8% from April, higher than the Bank of Japan's current expectations. The value is 1.1%. Economists at Japan's Sumitomo Mitsui Banking Corporation Nikko Securities are more aggressive, predicting Japan's inflation rate will hit around 2.5 percent this fiscal year, or a 30-year high.
In addition, businesses such as China, which account for about 30% of Liangpin's revenue, will also be challenged, and annual sales may decrease by 10%. Affected by the epidemic, about 50 Muji stores in China have been suspended, and some stores have shortened their business hours, and the affected stores account for one-third of the total. As of the end of February, Muji had a total of 1,040 stores worldwide, including 473 in Japan and 567 in the international market.
It is worth noting that the 2022 fiscal year is the first year after Nobuo Tang was promoted from the executive director to the president of the group, and it is also the first year when Liangpin plans were helmed by executives from outside the group. To announce negative earnings forecasts at such a landmark moment, it is clear to Xuan Huo that the group's situation has reached a point where it cannot be easily reversed.
Liangpin Plan announced in July last year that Xuanfu before the hall would be promoted to president, fully responsible for managing the daily affairs of the group and formulating development strategic plans, etc., and Shimizu Zhi, the head of the group's China business, will also serve as senior managing director.
This is not only the first appointment of a new president for the BESTORE project after a lapse of six years, but also the first time that an executive who has joined from outside the group has been used as the helmsman. Ryopin Project started as the own brand of Seiyu, a large Japanese supermarket, and all the presidents of the past generations were born in Seiyu.
According to the data, Nobuo before the court worked for McKinsey's Japanese subsidiary, and in 1998, he joined the Fast Retailing Group, the parent company of Uniqlo. He was promoted to director at the age of 29 and held important positions such as IT department leader and chief financial officer. He was once regarded as the successor of Fast Retailing Group CEO Yanai Zheng, and then left in 2016.
In 2019, Xuanfu before the hall officially entered the BESTORE program, accumulated rich experience in training young store managers, etc., and gradually formed his own set of unique corporate management concepts. Nobuo's former colleague at Fast Retailing once commented, "He is always fearless to say what should be straight to Yanai Masayoshi."
Akatsuki Matsuzaki, the former president of Liangpin Project, said more bluntly at the press conference announcing the appointment of the successor. By introducing measures such as being able to be promoted to store manager after 3 years of employment, Nobuo Tang has attracted and cultivated outstanding talents and is a suitable successor.
Perhaps it was because he sensed the fierce competition in the apparel track in advance, and after taking over, he gradually tilted the balance of the Liangpin plan to the lifestyle field.
In addition to planning to achieve 50% of clothing in unisex designs as early as spring 2022 to control costs and reduce inventory, Muji opened its first "fresh food complex" in Shanghai at the end of last year.
In February this year, MUJI Kitchen on the first floor of MUJI’s headquarters in Tokyo’s Toshima Ward also officially opened, mainly selling fresh meals. This is the first time that MUJI has officially launched a deli kitchen after services such as Café&Meal MUJI and MUJI marche, which sells fresh vegetables, fruits and meat.
At the same time, sustainable development has become an area of focus for Muji. In the brand's newly opened flagship store, "food sharing" and "denim clothing recycling" have become the highlight areas of the physical store. In order to encourage everyone to reduce the use of disposable paper cups, Muji will also sell glass water bottles in the store next to the shelves Place a water dispenser.
In terms of services, MUJI is also developing more and more diversified. It has successively launched consulting services such as clothing matching and furniture configuration. Recently, it has added a "Handmade Paradise Potted Plant" area to enhance consumers' experience and happiness. It is significant that Uniqlo, the biggest competitor of Muji, has also opened up areas for selling flowers in some stores.
Like the Liangpin plan, Uniqlo faces the challenge of declining consumer confidence in Japan. According to Fast Retailing Group's first-half fiscal year performance report released last Thursday, Uniqlo's sales revenue in Japan fell by 10.2% to 442.5 billion yen. 1.22 trillion yen.
Okazaki Ken, chief financial officer of Fast Retailing Group, said at the first-quarter earnings conference that affected by rising raw material and transportation costs, its brands will increase the price of some products, "We have reached the point where we have no choice."
However, for the 2022 fiscal year, Fast Retailing Group is slightly more optimistic than the good product plan. It is expected that the annual revenue will increase by 3.1% to 2.2 trillion yen, the operating profit will increase by 8.4% to 270 billion yen, and the net profit may record 11.9%. % increase to 190 billion yen.
The outspoken "father of Uniqlo" Yanai Zheng has repeatedly complained about the pressure faced by business leaders to speak out on controversial issues, but has always emphasized the need to continue operating in a challenging market environment. In an interview with the media at the beginning of this year, he bluntly stated that the future opponents of Fast Retailing Group are Google, Apple, Meta and Amazon, not clothing retailers such as Zara.
To this end, Fast Retailing Group has raised the highest annual salary for social recruitment to 1 billion yen, or about RMB 55.524 million this year, with no upper limit on the number of recruits, in order to attract proficient in digital and e-commerce transactions (EC) and supply through high salaries Chain of talent.
What is certain is that both Muji and Uniqlo are at a new watershed. Whether it can arouse the attention of consumers is the key to winning the market.
Due to the lower-than-expected performance, the share price of Liangpin Plan fell 3.62% to 1,196 yen last Thursday. The latest market value is about 309.8 billion yen, which is almost halved from 596.4 billion yen in July last year. The share price of Fast Retailing Group fell today. 1.25%, with a market value of about 6.8 trillion yen.