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Last Updated: 2014.02.14

Fast Retailing Co., Ltd. Announces Proposed Secondary Listing of Depositary Receipts on the Main Board of the SEHK, by Way of Introduction

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Investment Highlights

Growing recognition of UNIQLO as an international brand
Leading clothing retailer in Asia, the world's largest and fastest growing market
Strong portfolio of established brands
Creating a strong platform for global expansion, and long-term growth
High quality clothing, innovation, and exceptional customer value
A Leading SPA: Optimized, highly integrated supply chain, and distribution capabilities
Experienced senior management team, and strong corporate culture

Fast Retailing Co., Ltd. ("Fast Retailing" or the "Group"), the largest clothing retailer in Asia Pacific in 2012* with an extensive global retail network, announced today the details of its proposed secondary listing of Hong Kong depositary receipts ("HDRs") on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK") by way of introduction. No shares will be issued, and no capital will be raised through this secondary listing.

The Group's shares were first listed on the Hiroshima Stock Exchange in July 1994, before moving to the Second Section of the Tokyo Stock Exchange ("TSE") in April 1997, and subsequently progressing to the First Section of the TSE in February 1999. As at 4 February 2014, the Group had a market capitalization of approximately ¥3.67 trillion (HK$282 billion).

Dealings of the HDRs on the SEHK are expected to commence on 5 March 2014 (Wednesday) under the stock code 6288. The HDRs will be traded in board lots of 300 HDRs. Each HDR will represent an ownership interest of 0.01 Fast Retailing shares listed on the TSE. Morgan Stanley Asia Limited is the Sole Sponsor.

Investment Highlights

Growing recognition of UNIQLO as an international brand
The Group's mainstay UNIQLO brand, with its reputation for high quality, basic casual wear, including clothing using technologically advanced fabrics, has carved a highly competitive position in the clothing market in Japan, and the UNIQLO brand is now becoming increasingly well-known around the world. UNIQLO's strong reputation in the retail apparel market has also helped the Group negotiate favorable terms on new store openings with developers and operators of well-known fashion retail buildings and shopping centers in Japan, other parts of Asia, and elsewhere in the world. The opening of global flagship stores, megastores, and global hotspot stores in prime locations around the world has increased awareness of the UNIQLO brand worldwide. These stores aim to showcase the best of UNIQLO, through innovative store design, an expansive display of product colors and styles, designer collaborations, high quality customer service, and a memorable shopping experience. UNIQLO now boasts global flagship stores in New York, London, Paris, Shanghai, Seoul, Taipei, Osaka, Tokyo, and Hong Kong, which serve to act both as shopping destinations and as ideal locations for communicating UNIQLO's brand message to a broad audience worldwide.

Leading clothing retailer in Asia, the world's largest and fastest growing market
The Group began expanding its UNIQLO operations in Asia in 2002, and has been the largest clothing retailer in the Asia Pacific region* based on retail sales since 2004. Meanwhile, it was also the largest clothing retailer in Japan* in terms of retail sales from 2004 through 2012. In 2012, the Group had a 9.4% share of the US$94.2 billion Japanese clothing market, and a 2.2% share of the US$444.8 billion Asia Pacific region clothing market. As at 30 November 2013, the Group had a total of 856 UNIQLO stores in Japan and 477 UNIQLO stores in other parts of Asia, covering China, Hong Kong, Taiwan, South Korea, the Philippines, Singapore, Malaysia, Thailand, and Indonesia. The Group has 11 years of retail experience in China, one of the largest and fastest growing clothing markets in the world, where the Group operated 251 stores as of 30 November 2013. The Group plans to accelerate expansion of its retail networks in Asia, to maintain its leading position in existing markets, and it will pursue aggressive expansion into high-growth, underpenetrated markets within Asia.

Strong portfolio of established brands
The Group has a range of established higher-end labels, such as Theory, Comptoir des Cotonniers, Princesse tam.tam, and J Brand. These brands all have well established operations, and are growing. With a diversified portfolio of internationally recognized brands, the Group can keep abreast of developing fashion trends and broaden its appeal among different groups of customers. The Group successfully launched the GU brand in 2006, to address the demand for low-priced fast fashion in Japan. Having introduced GU to international markets in September 2013, with a first store located in Shanghai, China, the Group is now in a position to further expand GU internationally, and develop it into a second mainstay brand alongside UNIQLO.

Creating a strong platform for global expansion and long-term growth
With nearly 30 years of experience at UNIQLO, the Group has accumulated substantial industry know-how and expertise in the Japanese apparel retail market, which is now serving as a strong and stable platform to expand UNIQLO and the Group's other brands worldwide, securing new solid sources of sustainable long-term revenue and growth. The Group will continue to expand UNIQLO's presence in Asia, and enhance its brand recognition in the United States, and Europe. In the United States, the Group is establishing chain networks with stores with sales floor areas of approximately 800 square meters in and around New York, and San Francisco. In Europe, the Group is gradually expanding UNIQLO's presence, with the opening of global flagship stores in London and Paris, while the latest global flagship store is set to open in Berlin in 2014. The Group also intends to expand GU internationally, and expects to reap benefits from the acquisition of J Brand through an advanced knowledge of denim fashion trends, a deeper understanding of the denim industry, and the acquisition of new skills for the design and manufacture of superior denim items. By extension, the addition of other apparel labels to the brand portfolio is also likely to help enhance prospects for future growth, by facilitating synergies among its brands.

High quality clothing, innovation and exceptional customer value
The UNIQLO brand aims to provide clothing that has universal and lasting appeal to people across all ages, professions, ethnicities, and lifestyles, and it is committed to providing "made for all" high quality, basic casual clothing and the development of highly functional materials which offer exceptional value for its customers. To this aim, UNIQLO clothing is constantly updated with new design elements and superior fabrics that incorporate new technologies. The Group has established strong relationships with its partners and materials manufacturers to ensure consistent, high-quality end products and to procure materials of superior quality. For example, innovative HEATTECH is thin but warm, comfortable, odorless, anti-static, stretchable innerwear for winter, and AIRism offers comfortable, breathable all-year innerwear, with a light, dry feel, and perspiration-absorbing function.

A Leading SPA: Optimized, highly integrated supply chain and distribution capabilities
UNIQLO Japan is one of the first casual wear companies in Japan to establish a full-fledged SPA (Specialty store retailer of Private label Apparel) business model. The SPA business model incorporates the entire clothes-making process from procurement of materials, product planning, development, and manufacture, through distribution and retail to inventory management. Using the SPA business model, the Group seeks to closely control production levels. By maintaining a close dialogue between the frontline sales staff, the merchandising team, and the production team, the Group works closely with its partners to adjust production levels in response to consumer trends and preferences, including visiting partners, sharing production advice and helping to ensure that the Group's strict employment and environmental standards are adopted and upheld.

Experienced senior management team and strong corporate culture
The Group has an experienced senior management team with in-depth knowledge of the industry worldwide and an established track record for developing and running global retail businesses and brands. The senior management team is led by the Chairman, President and CEO, Mr. Tadashi Yanai, who has spearheaded the Group's growth into one of the world's leading clothing companies. There are nine senior executive officers who channel their expertise into the management of specific areas and segments of the business. In addition, over the past decade, a number of external directors joined the management board and contributed a wealth of expert experience in a variety of fields. This management structure has enabled the Group to steer the global expansion and investment decisions while minimizing risk. The Group maintains a strong focus on fostering a common corporate culture and encourages all staff worldwide to share the corporate mission of "Changing clothes. Changing conventional wisdom. Change the world."

Growth Strategies

Fast Retailing is transforming UNIQLO's brand image in Japan from a chain of multiple-sized, suburban roadside stores into a leading, international brand that showcases attractive, large format stores, including global flagship stores, in the nation's major cities. The Group will continue to open large format stores to enhance the brand image in Japan, and maintain opening of new stores overseas as the key driver for future growth of the UNIQLO business, including in China, Hong Kong, Taiwan, Southeast Asia, Oceania, the United States, and Europe. The Group will also further expand its GU casualwear brand in Japan and other markets, and continue to develop the portfolio of international brands, by enhancing brand recognition for the higher-end fashion labels such as Theory, Comptoir des Cotonniers, Princesse tam.tam, and J Brand. As part of the expansion strategy, the Group will continue to explore opportunities to invest in other apparel brands which offer potential synergies and growth potential. Finally, the Group intends to further expand and develop its digital platforms, by adopting mobile phone applications, digital advertising, as well as online shops, to satisfy the growing demand for eCommerce, and also to broaden its customer base worldwide.


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