Fashion giant Fast Retailing plans to expand in Australia

Japanese clothing chain Uniqlo is following in the foot steps of Zara and heading to Australia / File Source: The Advertiser

  ONE of the world's largest fashion groups will soon be taking aim at Aussie consumers turning up the heat on the nation's battling retailers.

Japanese fashion giant Fast Retailing is planning a “huge scale” expansion of its Uniqlo clothing chains in Australia.

Its range would compete with Premier Investments' Just Jeans and Portmans stores, Wesfarmers' Target and Woolworths' Big W.

The move comes after the arrival of Zara on our shores and the expected infiltration of Topshop and Forever 21.

Fast Retailing's expansion is part of  its plan to take over as the world's largest apparel maker, in part by muscling in on Australia's $300 billion retail pie.

The company's move will shake up fashion retailing at the casual end of the market.

And in more bad news for local fashion retailers, a slew of international players are taking aim at Aussie shoppers.   

With Zara already here - Australians travelled from all over the country and waited in queues overnight to be the first through the door - Topshop and Forever 21 are expanding into Australia by 2012/2013 as they look for new markets to infiltrate.

International companies such as Uniqlo are attracted to Australia’s rising incomes, population growth and the fact that the economy endured the global financial crisis.

Meanwhile, Australian retailers - large and small - are being hammered by weak consumer sentiment, interest rate fears, tighter household budgets and the burgeoning popularity of online shopping.

Many are reporting profit downgrades and staff cuts as well as store closures for major players including Colorado and Premier Retail Group.

While Myer yesterday revealed the impact of the consumer downturn, with full-year sales down 5.5 per cent , Fast Retailing president and chairman Tadashi Yanai confirmed the company had a concrete plan for an Australian launch.

“We would like to get into the Australian market. Hopefully by 2012, if not then by 2013 at the latest,'' he told The Australian.

"We have already started market research for Australia, although the business plan is not yet confirmed.

“We will be there as soon as possible. If we are going to be there, it is going to be a huge scale.''

Uniqlo said it planned to build new factories in Bangladesh, Indonesia, India and Cambodia to diversify its manufacturing operations away from China.

The $18 billion company has stores in China and South Korea as well as throughout Japan. Outside Asia, it operates in the US, Britain, German, France, Brazil and Argentina.

Until recently, large fashion chains have eschewed the Australian market.

Australia’s opposing seasons to the northern hemisphere and geographical isolation meant foreign retailers found it a difficult market to crack.

Without this competition, Australian retailers have been able to to keep margins and prices at a higher level than their overseas counterparts.

And with  more Australian consumers going online to shop, these international brands have a very good opportunity to increase their already large share of the local market