Inks joint venture with SM group
MANILA, Philippines - Asia's largest clothing retailer Uniqlo is soon setting up shop in the Philippines.
SM Retail, a unit of the country's largest shopping mall operator SM, on Wednesday said it is partnering with Fast Retailing Corp., the firm which owns the clothing brand Uniqlo, for its first venture in Manila.
The two retail giants agreed to form by year-end Market Watch Investment Corp., which will serve as the vehicle for Uniqlo's entry in the Philippines.
The first flagship Uniqlo store will open in the SM Mall of Asia Complex in Pasay City next year.
"Both companies would be pouring in equity into the joint venture," SM Investments Corp. vice-chairperson Teresita Sy-Coson said in a text message.
Uniqlo is Asia's largest clothing retailer known for its quality yet reasonably priced products, mostly fashionable basic and casual clothing wear. The Japanese brand has about 824 stores in Japan alone and 150 stores outside its home base.
The company said it is accelerating its overseas expansion to offset slowing growth in Japan from a shrinking population, persistent deflation and increased competition from retailers selling budget clothing.
Japanese department stores and clothing sellers have also been hurt by worries over the strength of the country's economic recovery after a devastating earthquake hit the world's third largest economy early this year.
It is also considering opening outlets in Vietnam, Indonesia, India and Australia, and sees sales from overseas Uniqlo outlets surpassing sales from domestic outlets in 2015.
The partnership meshes well with SM's, whose niche market primarily deals with the middle-income class segment specially as consumers become more price and value conscious.
"The emerging trend is the youth market. Uniqlo being such adds value to their existing line up," Alejandro Yu of RS Lim & Co. Inc. said.
SM also has a chain of specialty store formats that serve niche markets by focusing on a wide selection of merchandise for each category like home stores, toy superstores, hardware superstores like ACE Hardware, personal care stores with Watsons, and appliance superstores among others.
SM Retail is part of SM Investments Corp., one of the country's largest conglomerates owned by the Sy family. Apart from mall development, it also has interests in banking, property and leisure development. For the first half of the year, it posted a net profit of P9.64 billion, higher by 13% on year.