Fast Retailing: Aiming for the gold medal
About 85% of Fast Retailing’s sales come from Uniqlo, the biggest fashion retailer in Asia, and it has announced that its sales for the year to August 31 were up 16.6% to $25bn, which is expected to see it eclipse Sweden’s H&M for the first time and move it into silver medal position on the global podium. Only Zara owner Inditex remains ahead.
Fast Retailing’s founder, Tadashi Yanai, is very clear that the front-runner is in his sights, saying: “Our pursuit of becoming number one enters a new stage.”
Yanai has been at the helm of the company since 1984, and its runaway success has made him the second-richest person in Japan. Its sales in North America and Europe have trebled since 2021, as has its share price, and while its sales in Japan and China still make up around 60% of the total, it’s the potential of significant expansion in North America and Europe that has investors interested. It is planning to open about 40 stores a year in these regions, as it aims for a contribution of $6bn from each within five years.
Uniqlo’s appeal is that it offers a range of simple, well-designed classics at remarkably low prices for the quality, and it’s a mile away from the fast fashion model of pushing an ever-changing range of “wear once and throw away” items in poor-quality fabrics. The company works closely with its suppliers. This allows it to develop hi-tech, specialised fabrics such as its Heattech range, which has sold more than 1.5-billion units since its launch in 2003.
GoPro: Losing focus, fast
When it listed on the Nasdaq in 2014, GoPro’s market share in the action camera market that it pioneered was more than 75%. Within two years of its listing, its market capitalisation peaked above $13bn as its revenues hit $1.62bn. Its founder and CEO, Nick Woodman, topped the Bloomberg list of the highest-paid executives in the US.
GoPro has suffered one of the most precipitous falls from grace since BlackBerry. By the second quarter, its market share was 3%, its stock was down 99% from its peak, and in September it agreed to be rescued by a US optical hardware company in a $285m deal.
The company was founded by Woodman after a frustrating surfing trip to Australia, where he struggled to get any decent pictures of himself in action. He borrowed money from his parents to set up the business and did good founder things like selling bead and shell belts from his VW camper van to raise further capital. The first camera was a pretty rough and ready affair, attached to the wrist with a rubber band and loaded with a roll of 35mm film. But high-definition digital video technology transformed the product.
GoPro dabbled with drones but gave up after its product was recalled due to quality issues, and its revenues have been tumbling by around 20% a year for the past three years as it fails to handle intense competition from its Chinese competitors, DJI and Insta360. The market for amateur users has been eroded by the ever-improving video capability of the smartphone, and the company that invented the category risks disappearing.
