Fast Retailing CEO Not Interested in J. Crew, Other Acquisitions

By Megumi Fujikawa and Peter Landers 

TOKYO-- Fast Retailing Co. aims to reach 3 trillion yen ($27 billion) in sales without making major acquisitions, its chief executive said, rejecting speculation that Asia's biggest apparel maker would look to overseas deals to accelerate growth.

Tadashi Yanai, chief executive of the company known for its Uniqlo stores, also weighed in on the U.S. presidential election, saying he was dismayed by the victory of Donald Trump and might revise his U.S. strategy unless Republicans disavow the "America first" stance Mr. Trump took during the campaign.

Mr. Yanai recently lowered his goal for sales in the year ending August 2021 to Yen3 trillion from Yen5 trillion. The company, which had sales of Yen1.8 trillion in the year ended August 2016, has been expanding rapidly in China.

"We can reach Yen3 trillion through organic growth," Mr. Yanai said in an interview Thursday.

The earlier, more ambitious target had led to speculation that Fast Retailing would need to make a major overseas acquisition. Many cash-rich Japanese companies, such as banks, life insurers and pharmaceutical companies, have been making multibillion-dollar acquisitions in places such as the U.S., where they expect faster growth than at home.

In 2014, Fast Retailing held merger discussions with apparel chain J. Crew Group Inc., people familiar with the matter said at the time. But the talks broke down and no deal was reached.

In the interview, Mr. Yanai said he wasn't interested in J. Crew, citing its recent sales slump.

Instead, he said the growth would come from Uniqlo and a lower-priced Fast Retailing chain called GU--pronounced "gee-you," which means "freedom" in Japanese. GU was created in 2006 and offers more trendy fashion lines compared with the more basic Uniqlo styles.

Mr. Yanai said he hoped to expand GU's presence in Asia and eventually bring the brand to the U.S. He suggested that Uniqlo and GU could somehow merge in the future, without giving details.

Uniqlo remains the company's flagship brand, with 1,795 stores globally, including 837 in Japan as of August.

Uniqlo has scaled back ambitions to be a national player in the U.S., where it has 45 stores. Mr. Yanai said he wanted to focus on big cities, where customers appreciate the quality of the clothes and follow fashion trends.

He expressed irritation at Mr. Trump's victory, describing the Republican's policies as "exclusionary" and out of step with American traditions.

"I have to wonder: Isn't it embarrassing for America to have elected that kind of person as president?" Mr. Yanai said. "What I'm hoping is that people of conscience in the Republican Party will try harder and make sure that they don't let the kind of things Trump is thinking of actually happen."

If Mr. Trump carries out the policies he described in the campaign, Mr. Yanai said he would focus his U.S. strategy even more on urban centers where people's values are more in line with international norms.

Representatives of Mr. Trump didn't respond to a request for comment.

Write to Megumi Fujikawa at [e-mail] and Peter Landers at [e-mail]

(END) Dow Jones Newswires

November 18, 2016 02:11 ET (07:11 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.