Uniqlo looks for acquisition targets to expand the US market

According to Bloomberg, Fast Retailing Co. (JP-9983) wants to turn Uniqlo into the ambition of the world's largest apparel retailer, allowing American Eagle Outfitters Inc. (US-AEO) and Aeropostale Inc. (US-ARO) became a potential acquisition target.

Fast Retailing Executive Director Tadashi Yanai said in an interview this month that in addition to opening three Uniqlo stores in New York, he is also looking for acquisition targets to expand the US market, and expects to increase global sales by five times to 60 billion in 10 years Above the dollar.

As Japan’s demand declined for the first time in at least five years, and fast sales revenue, which accounts for the majority of domestic sales, stagnated, 62-year-old billionaire Yanai also began to actively develop overseas. As the yen soared to its post-World War II high, fast-moving cash swelled to an all-time high of $2.6 billion. Takagi Securities Co. stated that Yanai is now likely to have more funds to purchase without having to exhibit again.

According to Morningstar Inc., both American Eagle and Aeropostale were included in his purchase list. American Eagle and Aeropostale all have approximately 1,000 dealerships in the United States. In terms of free cash flow, they are at least 25% cheaper than regular clothing retailers.

“If they have no market share or presence in the United States, the US is like the emerging markets,” said Keith Wirtz, chief investment officer of Fifth Third Asset Management in Cincinnati. It is not surprising that they may have the idea of ​​entering the world’s largest consumer market.”

Fast sales spokesman declined to comment. The American Eagle spokesperson for the site in Pittsburgh said it would not comment on rumors or speculation. The Aeropostale spokesperson in New York did not respond immediately to the reporter’s inquiry.

Uniqlo opened its first US store in New Jersey in 2005, but it closed its business in the coming year. In 2006, Uniqlo returned to the United States and opened a dealership in Soho, New York. Two more stores opened in New York last month, one of which is Fifth Avenue’s global flagship store. The celebrities such as actor Susan Sarandon and jazz singer Esperanza Spalding were wearing Uniqlo's costumes to advertise for the opening.

According to Jaime Katz, Chicago's Morningstar retail analyst, American Eagle and Aeropostale have made the Uniqlo brand even more perfect, and allowed Yanai to enter the mall-based consumer market in the United States. American Eagle is a youth apparel brand and its main product is jeans. Aeropostale sells casual clothing targeted at young people aged 14 to 17 years old.