UNIQLO CO., LTD.
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As part of our CSR activities, UNIQLO CO., LTD. recycles and reuses any UNIQLO product that customers bring in to donate. The first campaign took place in September 2006 with subsequent campaigns conducted each year during the months of March, September and then later in June too. Now, from March 1, 2010, we will accept clothes for recycling all year round.

Last year, approximately 90% of the 2.62 million items collected were distributed as emergency clothing aid to refugees and victims of natural disaster in Asia and Africa. However, if we are to provide more clothing to the estimated 30 million refugees and victims around the world, then we will have to ask our customers for yet more support. By conducting UNIQLO’s All-Product Recycling Initiative all year round we hope to ensure a large, stable flow of clothing, delivering customer goodwill quicker and in more abundance to the refugees of the world.

■　UNIQLO All- Product Recycling Initiative

UNIQLO CO., LTD. has been collecting and recycling its own used fleece products since September 2001, expanding these activities to the all UNIQLO product range from September 2006. Since then we conducted a regular, reliable collection and recycling/reuse service during the months of March and September each year adding a further campaign in the month of June in 2009. We collected a record 2.62 million items in 2009, a 165% increase on 2008. By conducting our recycling initiative all year round from this March 2010, we hope to ensure an even larger flow of clothing.

■　Approx. 90% of items collected are reused as emergency clothing aid for refugees and victims of natural disaster

Our target is to provide clothing to each and every one of the world’s 30 million refugees

While some of the clothing collected from customers is recycled as energy fuel and industrials fiber, approximately 90％ of items are reused as emergency clothing aid for refugees and victims of natural disaster.
With the cooperation of individual groups and organizations active in this field※, UNIQLO has donated relief clothing to refugee and IDP camps in Asia and Africa. March 2010 clothing will go to refugees and IDP camps in Bangladesh.

UNIQLO seeks to deliver customer goodwill directly along with the clothing donations. By running a year-round campaign we hope to expand the stable flow of clothing to reach every one of the world’s estimated 30 million refugees.

■　Reference

・For details of our full product range recycling:　http://www.fastretailing.com/jp/csr/environment/recycle.html

・For our full product range recycling photo report on donations to refugee camps: http://www.uniqlo.com/jp/csr/recycle/special/index.html　(Japanese only)

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FAST RETAILING CO., LTD. has decided to conduct a reorganization of group companies involving mainly its fully owned subsidiary LINK THEORY HOLDINGS CO., LTD. and LINK’s own subsidiary firms.

１．Aim of group reorganization

FAST RETAILING CO., LTD. conducted a tender offer to make LINK THEORY HOLDINGS CO., LTD. (LTH) a fully owned subsidiary in July 2009. Now, in line with our unified GLOBAL ONE management system, we plan to reorganize LINK related group operations in the US and Japan. The ultimate aim of the GLOBAL ONE system is for each group operation to be administered and managed by region in order to generate greater synergy benefits and boost management efficiency.

２．Group reorganization in the US

The FR group’s operations in the US will be reorganized as follows:

３．Business name change in the US and tentative effect date

４．Subsidiary for transfer

６．Subsidiaries to be dissolved

７．Related reorganization in Japan

In order to achieve more efficient management, we have decided to merge the three companies involved in the theory operation in Japan, LINK THEORY HOLDINGS CO., LTD. (LTH), LINK INTERNATIONAL CO., LTD. (LIC) and LINK SALES CORPORATION (LSC), with LINK INTERNATIONAL CO., LTD (LIC) as the surviving amalgamated company. To mark this merger, LIC will change its business name to LINK THEORY JAPAN CO., LTD.

８．Overview of companies for merger（at August 31, 2009)

９．Business name changes in Japan and tentative effect dates

10．Future outlook

We envisage any impact from this corporate reorganization on our consolidated performance will be minimal and therefore we have made no changes to our current business estimates.

Reference: Chart of related group companies before and after reorganization

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FAST RETAILING CO., LTD. decided at its executive board meeting held February 18, 2010, to transfer its shoe business, currently managed by fully owned subsidiary GOV RETAILING CO., LTD., to UNIQLO CO., LTD. To this aim, FR will conduct a corporate division involving GOV RETAILING CO., LTD. as the company for division and UNIQLO CO., LTD. as the acquiring company for the absorption.

１．Aim of corporate division

GOV RETAILING CO., LTD. currently manages the retail of both clothing and footwear. However, in order to begin developing the UNIQLO SHOES brand operation, we plan to retail the footwear in UNIQLO brand stores currently operated by UNIQLO CO., LTD. The company therefore decided that bringing the shoes segment under the same operational company would be beneficial for the accelerated growth of the segment.

２．Details of corporate division

（１）Corporate division schedule

（２）Division method

A division by absorption with GOV RETAILING CO., LTD. as the company for division and UNIQLO CO., LTD. as the acquiring company.

（３）Rights and obligations transferred to acquiring company

The current corporate division involves the transfer of rights and obligations related to the footwear operation as stipulated in the corporate divisional absorption contract dated February 18, 2010 between UNIQLO CO., LTD. and GOV RETAILING CO., LTD.

（４）Expected discharge of division

We judge the discharge of the responsibilities required to be undertaken by GOV RETAILING CO., LTD. and UNIQLO CO., LTD. following the current corporate division will present no specific problems.

３．Overview of companies involved in the operational transfer（at August 31, 2009）

４．Operational segments for division

The design and retail of footwear brands such as CANDISH and UNIQLO SHOES.

５．Future outlook

We expect the impact of this decision on FAST RETAILING’s corporate performance to be minimal and therefore we have made no changes to our current business estimates.<

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FAST RETAILING CO., LTD. has decided to establish a subsidiary company in Taiwan, the details of which are set out below:

１．Reason for establishing a Taiwan subsidiary

FAST RETAILING has decided to fully fund the establishment of a subsidiary in Taiwan with the aim of developing a UNIQLO operation in Taiwan.

２．Taiwan subsidiary (tentative details below)

３．Operation start date

Once the subsidiary is established, we plan to open our first store in Taipei City roughly Autumn 2010.

４．Impact on business performance

We expect any impact of this decision on FAST RETAILING’s consolidated results for the year to August 2010 to be minimal.

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In Spring 2010, UNIQLO jeans are entirely renewed.  Introducing “UJ”, the new jeans brand that change jeans. 
UJ stands for the 3 fundamental qualities of the perfect pair of jeans; Fit, Fabric and Finish. Never compromising on those “3 F’s”, UJ also offers new standard of jeans quality, design and price to worldwide customers, breaking free from convention.  The first season of UJ begins with 54 styles of new jeans from authentic 5 pockets through the playful designed jeans of the latest trend. 

Jeans are being transformed at UNIQLO this spring with the launch of the new jeans brand. “UJ”, the new generation jeans. This new brand pursues the ultimate value in jeans, for now and the future. 

■　UJ – the pursuit of “3F’s” – the perfect Fit, Fabric & Finish

Fit, Fabric and Finish are the fundamental qualities people want from a perfect pair of jeans. While pursuing these 3F’s, UJ also keeps defining jeans of the new generation in its quality, design and price breaking free from jean’s history and tradition.
　FIT：  Wide variety of fits to ensure any customer can find their own perfect pair
　FABRIC： Fabrics and detailing to amaze the world’s greatest jeans lovers
　FINISH： Upgraded sewing, wash & finish with Japanese jeans making technologies

■　UJ – 3-band price range

UJ offers three price bands – The ultimate attention to detail offered in ¥3,990 premium line, the rich variety of colors in ¥2,990 standard range and ¥1,990 basic line perfect for daily use. There are people with unique views on exactly how their jeans should look and people expecting comfort to wear jeans. UJ offers something for all.

■　UJ Monthly Collection latest design

Along with the authentic 5 pocket jeans, UJ will release new designed jeans every month, offering customers the chance to try out jeans of the latest fashion trends with unique twists and touches.
With 54 new UJ styles on offer this spring, anyone should be able to find their perfect pair. 

(Note) The 54 styles include all jeans items launched through early April 2010. Plenty of subsequent new designs will also be released.

* UJ Jeans available in all UNIQLO Japan stores and through our online store (http://store.uniqlo.com)

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The FAST RETAILING Group has decided to donate ¥5million in aid to the region devastated by the Haiti earthquake that hit on January 12th, 2010.
The monies donated will go to aid quake sufferers through the American Red Cross and non-profit organization JEN (formerly named Japan Emergency NGOs, established 2004). The FAST RETAILING Group would, in some small way, like to help relieve the suffering of those affected by natural disaster, war and terrorist activities. Although, we realize that what we can do is limited, we are determined to continue to actively support emergency aid activities going forward.

For an account of past aid activities:
http://www.fastretailing.com/jp/csr/community/emergency.html

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Consolidated results

【Summary】　Three months to November 2009: Net sales up 39.8％, OP rises 49.1％

Both revenue and income increased significantly at FAST RETAILING during the first quarter from September to November 2009. Net sales rose 39.8% year on year to ¥263.4bln, operating income rose 49.1% year on year to ¥61.0bln, and net income increased by 57.2% to ¥34.8bln. Underlying this strong performance were considerable gains in both revenue and profit at our mainstay UNIQLO Japan operation and also expanded profits at UNIQLO International.

UNIQLO Japan same store sales increased by a strong 20.8% year on year, tipping net sales ¥20.0bln and operating income ¥10.0bln above the initial estimate for the quarter. New products including outerwear such as neo-leather jackets proved strong right from the autumn season launch. UNIQLO was often in the news with the opening of the Paris global flagship store, and the launch of the +J collection with fashion design Ms. Sander. This boosted customer numbers considerably during the quarter. Large year-on-year increases in sales of HEATTECH functional wear also contributed to the quarter’s strong revenue performance.

UNIQLO International generated a significant increase in revenue over the first quarter with the success of the Paris global flagship store opened October 1 and the launch of the +J collection helping to boost same store sales in each national market. Although GOV RETAILING performed to plan, profit at our Japan Apparel segment fell overall on the back of a downturn in performance at women’s fashion developer CABIN. Both revenue and income rose at our Global Brands segment as the newly consolidated theory brand made a strong contribution, and our COMPTOIR DES COTONNIERS brand performed to plan.

We have revised up our initial consolidated business estimates for the year to August 2010. We now predict consolidated net sales for the full year of ¥820.0bln (up 19.7% y/y), operating income of ¥130.5bln (up 20.1% y/y) and ordinary income of ¥125.5bln (up 23.9% y/y). We forecast a profit per share of 663.16 yen. We are scheduling an annual dividend per share of 200 yen that includes an interim dividend payout of 100 yen.

■　UNIQLO Japan

We achieved significant gains in both revenue and profit at our mainstay UNIQLO Japan operation which accounts for approximately 80% of consolidated net sales. Net sales for the first quarter rose 30.2% year on year to ¥204.9bln and operating income rose 42.9% to ¥56.2bln. Compared to our initial target, net sales outperformed by ¥20.0bln and operating income by ¥10.0bln. We achieved extremely strong same store sales growth of 20.8% year on year during the first quarter. New products including outerwear such as neo-leather jackets proved strong from the autumn season launch. UNIQLO was often in the news with the opening of the Paris global flagship store, the launch of the +J collection with fashion design Ms. Sander, and the grand opening of our expanded, refurbished Ginza store – all of which helped boost customer numbers during the quarter. Then, thanks to our campaign to mark FAST RETAILING’s 60th anniversary, we were even able to further extend sales in November, a month which had already seen a large increase in year-on-year sales last year. An increase in sales of HEATTECH functional wear also contributed to the strong performance at UNIQLO Japan with the number of units sold rising considerably year on year.

On the profit front, gross margin improved 1.1 points, and the SG&A to net sales ratio also improved 1.3 points year on year. The improvement in gross margin can be attributed to several factors including strong sales of new Autumn items early on in the season, strong sales of HEATTECH items, and an early launch of new seasonal goods after bringing forward the offloading of summer inventory within the previous business year to August 2009. Strong sales also generated improvement in business cost ratios.

The strong sales trend continued in December with sales of HEATTECH items and down jackets buoyant, generating same store sales growth of 11.5% year on year. However, we expect some shortages of winter stock in January, and therefore we included only the strong first quarter sales performance from September through November upon revising our full-year forcasts for UNIQLO Japan. As a result, we have revised up our prediction for net sales for the year through August 2010 to ¥615.0bln (up 14.3% y/y) and operating income to ¥130.0bln (up 17.4% y/y).

New store openings proceeded as planned in the first quarter adding a net 25 stores to bring the total number of direct-run stores to 772 at end November 2009 (792 stores including franchises). At end November 2009, we had 81 large-format stores of 1650sqm or more.

■　Japan Apparel

Overall net sales at the Japan Apparel operation during the three months from September to November 2009 rose 6.2% year on year to ¥14.4bln, while operating income shrank year on year to near zero. GOV RETAILING performed to plan, but a downturn at CABIN dragged the overall Japan Apparel segment below our initial estimate. Sales at our low-cost casual g.u. brand took off following the launch of the ¥990 Jeans series in March 2009. A continued strong trend saw g.u. sales exceed initial forecast in the first quarter generating significant gains in both revenue and income. Losses increased somewhat at our footwear operation with closing down sales at FOOTPARK stores continuing to impact. Performance at CABIN dipped below target with same store sales continuing to fall below previous year levels in a generally depressed fashion apparel industry environment.

We have revised down our forecasts for the Japan Apparel segment for the year to August 2010 owing to the continued decline in same store sales at CABIN. We now predict the Japan Apparel segment will generate net sales of ¥47.0bln (down 8.8% y/y) and an operating loss of ¥0.7bln.

■　Global Brands

Our Global Brands operation fueled a 189.4% year-on-year increase in net sales to ¥22.8bln and a 167.4% increase in operating income to ¥2.6bln. The new incorporation of theory as a consolidated subsidiary contributed greatly to this large increase in both revenue and income. Sales from the theory operation came in on plan, but the operation outperformed on profitability thanks to stronger control over inventory, and lower procurement costs as the yen strengthened. COMPTOIR DES COTONNIERS and PRINCESSE TAM.TAM performed as expected. Our full-year forecast for the Global Brands segment remains unchanged from the initial estimate of net sales ¥85.0bln (up 52.9% y/y) and operating income of ¥4.5bln (up 2.7% y/y).

■　Revisions to consolidated business forecasts for year to August 2010

Having revised upwards our full-year forecasts at UNIQLO Japan and UNIQLO International and revised down our Japan Apparel segment, we have also made some revisions to our consolidated business forecasts for the full year to August 2010. We have revised up the full-year consolidated net sales forecast from ¥798.0bln to ¥820.0bln (up 19.7% y/y), the operating income forecast from ¥120.0bln to 130.5bln (up 20.1% y/y), and the ordinary income estimate from ¥115.0bln to ¥125.5bln (23.9% y/y). Consequently, we now envisage profit per share of 663.16 yen, and we are scheduling an annual dividend per share of 200 yen including a 100-yen per share interim payment.

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