Uniqlo Europe has taken a sudden turn, dropping to a pre-tax loss of €1.86 million ($US2.08 million) in the year to August 31, compared to a €2.5 million profit in the previous fiscal year.

Documents filed at Companies House also indicate that the Japanese fashion retailer’s operating loss stood at €1.02 million, compared to €3.07 million profit in 2015.

With 10 stores in the UK and also outlets in France and Germany, Uniqlo says the result was impacted by investment in expansion, plus the weakening euro against the dollar.

However, taking out the impact of exchange rates and the revaluation of assets and liabilities not denominated in euros, Uniqlo’s adjusted operating profit stood at €4.3 million.

The retailer says sales spiked by 26 per cent to €347 million, thanks to store openings and e-commerce growth.