Uniqlo puts brake on UK expansion

CLOTHING group Uniqlo has had its ambitious plans to expand in Britain torn up by its Japanese partner. Instead, the group faces aggressive cost-cutting as new president Genichi Tamatsuka struggles to get the troubled retailer back on track.

Tamutsuka was promoted to the top job last year in an attempt to revive the group's dwindling sales and profits in Japan. He also had an eye to the UK where Uniqlo lost £20m on sales of £14m last year.

Uniqlo had planned to lift UK store numbers to 50, from 21 currently. But Tamutsuka said it could make profits with its existing stores. 'We are not concerned about realising the initial plan of setting up 50 outlets in the first three years. One problem is that the UK firm is too large for the number of stores, resulting in high costs. Store operations should also be improved,' he said.

Its partner, Fast Retailing, has also been taken a battering in its home market. Its formula of selling mass-produced cheap fashion goods has been strongly challenged by competition and shifts in consumer tastes.

Total profits in the year ended August slumped from 50bn yen (£263m) to 14.7bn yen as sales plummeted. Earlier this month, the group reported that sales dived 30% in November, the 15th consecutive fall. Japanese analysts expect them to tumble a further 30% in the first half of the current year.