Cymer Capital chief investment officer Samantha D’Amore has pitched Japanese-listed Fast Retailing, owner of Uniqlo, arguing the company’s focus on affordable, functional clothing sets it apart from fast-fashion rivals. 

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“Fast Retailing is not the same thing as fast fashion,” she told the audience. “They make high quality basics and functional clothing at affordable prices. It’s a narrow range of products refined over the years. No logos, no chasing trends. It’s quiet.” 

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Uniqlo’s Heattech and Airism fabrics deliver technical performance without luxury price tags, helping drive customer loyalty and repeat purchases, D’Amore said. 

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“This morning, everybody solved a small problem of what to wear,” she added. “Fast Retailing helps millions of customers with that globally: how to stay warm, cool, dressed for the office or a hike, in clothes that last and not throw away, at affordable prices.” 

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And the model is profitable, too. Fast Retailing generated an 18 per cent operating margin last financial year, close to fellow retailer Inditex’s 20 per cent and more than double H&M’s. 

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“Over 80 per cent of Fast Retailing’s supply base has worked with them for more than a decade, and because they aren’t chasing the latest trend, they avoid the deep discounting cycle that plagues peers,” D’Amore said.

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D’Amore sees significant expansion potential in the US and Europe, where Uniqlo remains relatively small. 

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Risks include founder Tadashi Yanai’s succession, overseas execution and a punchy 39-times earnings valuation.

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This article was originally posted by Australian Financial Review here. Licensed by Copyright Agency. You must not copy this work without permission.

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