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Fast Retailing counts cost of coronavirus pandemic

Japanese fashion brand Uniqlo’s parent Fast Retailing has slashed its net profit forecast for this year to ¥100 billion (US$930 million), a drop of 38 per cent against last year’s figures, after taking into account the impact of the coronavirus outbreak.

The firm had earlier released prospective figures of ¥165 billion ($1.53 billion) for the year’s trading.

According to reporting in Nikkei, public lockdowns and other social distancing measures in place in many of its major markets has forced Fast Retailing to halt operations at hundreds of its around 2240 Uniqlo locations globally. At least 80 per cent of the company’s revenues are taken through its brick-and-mortar stores.

“It is difficult to calculate an accurate earnings forecast,” said one of the firm’s directors Takeshi Okazaki. “The revisions are based on the assumption that the coronavirus epidemic begins to dissipate in June. The forecast may have to be revised again if the outbreak continues.”

Most Uniqlo locations in China and South Korea are currently trading following a massive hit to sales during outbreaks in those locations.

“I think it is the biggest crisis that humankind has faced since the Second World War,” said Fast Retailing chairman and CEO Tadashi Yanai, suggesting the pandemic exposes risks associated with globalisation, politics, and financial markets. “I am prepared to rebuild the company by updating old systems.”

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