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Delhi News Daily > Blog > Fashion > Uniqlo owner warns significant tariff impact, plans price hikes – ET Retail – Delhi News Daily
Fashion

Uniqlo owner warns significant tariff impact, plans price hikes – ET Retail – Delhi News Daily

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Last updated: July 10, 2025 12:41 pm
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Japan’s Fast Retailing , owner of the Uniqlo clothing brand, said on Thursday higher U.S. tariffs would start impacting its U.S. operation significantly from later this year and it planned to raise prices to mitigate the blow.

Concerns about resurgent inflation and an economic slowdown triggered by U.S. President Donald Trump’s erratic tariff roll-out have already dampened shopping enthusiasm in the U.S. and other major consumer markets.

Earlier this week, Trump has set a new August 1 deadline for “reciprocal” tariff rates, which will affect nearly all trading partners.

“It is unavoidable that we will be significantly affected from autumn and winter,” Fast Retailing Financial Officer Takeshi Okazaki said in its quarterly earnings conference.

“It will be difficult to absorb all costs. Our approach will be to raise prices where possible and not where it isn’t possible, while ultimately focusing on creating a sustainable business that securely generates profits.”

The majority of Uniqlo products sold in the U.S. are produced in Southeast Asia and South Asia.

In a letter on Wednesday, Trump notified Sri Lanka, a major apparel exporter to the U.S., would face a 30 per cent tariff from August 1. Its competitor Vietnam faces a lower 20 per cent U.S. tariff but trans-shipments from third countries through Vietnam will face a 40 per cent levy, Trump said last week.

For the current fiscal year to end-August, the company kept its operating profit forecast at 545 billion yen, as it expected limited tariff impact due to early shipments to the U.S. market.

“FY2025 impact likely to be limited, whatever the tariff rate,” the company said in an earnings statement, adding it has already shipped a substantial number of products to the U.S.

Fast Retailing said operating profit in the three months to May 31 rose 1.4 per cent to 146.7 billion yen ($1.00 billion), below a consensus forecast of 153.8 billion yen based on a LSEG poll of five analysts.

From one store in Hiroshima, western Japan, 40 years ago, Uniqlo has grown to more than 2,500 locations across the world, selling inexpensive fleeces and cotton shirts made primarily in China and other Asian manufacturing hubs.

But that business model has been upended by widespread tariffs announced by Trump, while falling sales in China due to weak consumer demand in the world’s second-largest economy has put pressure on profits.

It expected lower fourth-quarter sales and profit in China due to overall lacklustre demand for apparel.

The company has recently looked to North America and Europe for growth due to a slowing economy in China, its largest overseas consumer market with more than 900 Uniqlo stores on the mainland.

Shares in Fast Retailing were the fourth-biggest loser among large-cap stocks in the Asia-Pacific in the first half of 2025, declining about 8 per cent , according to LSEG data.

Shares in the company closed down 0.9 per cent prior to the earnings report.

  • Published On Jul 10, 2025 at 05:03 PM IST

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