Uniqlo offers bumper dividends in Korea as ‘No Japan’ boycott fades

Industry

Published: 11 Dec. 2023, 16:51

Uniqlo offers bumper dividends in Korea as ‘No Japan’ boycott fades

A Uniqlo store [REUTERS/JOONGANG PHOTO]

Uniqlo's Korean operations declared dividends outstripping its own profits for the second consecutive year, with half of them going to Lotte Shopping.

The surprisingly high dividend rate comes as the Japanese casual clothing brand witnessed a 30 percent surge in sales on-year in Korea, bouncing back from the challenges posed by the 'No Japan' boycott movement in Korea.

FRL Korea, the managing entity overseeing Uniqlo's operations in Korea, distributed dividends amounting to 180 billion won ($136.6 million) to major stakeholders, including Japan's Fast Retailing, holding a 51 percent ownership, and Korea's Lotte Shopping, with 49 percent ownership. Fast Retailing received dividends of 91.8 billion won and Lotte Shopping 88.2 billion won, according to the Financial Supervisory Service's electronic disclosure on Monday

FRL Korea attributed the decision to offer high dividends to "board decisions."

The dividend payout not only exceeds both net profit and operating profit for the fiscal year but also underscores the company's resilience and financial strength.

FRL Korea reported a 30.9 percent year-on-year surge in sales for the 2022 fiscal year — from September 2022 to August 2023 — reaching 921.9 billion won. Operating profit increased by 23.1 percent to 141.2 billion won, while net profit exhibited a 42.8 percent growth, totaling 127.2 billion won during the same period.

This year's dividend scale was also a 28.6 percent increase compared to the preceding fiscal year. In the 2021 fiscal year, FRL Korea distributed dividends totaling 140 billion won, also surpassing both net profit and operating profit.

Uniqlo's narrative, facing challenges since 2019's 'No Japan' movement, has taken an unexpected turn. The recent thaw in diplomatic relations between South Korea and Japan, coupled with the impact of inflation, has seen a resurgence of high-quality cost-effective Japanese brands in the eyes of Korean consumers. For Uniqlo, this resurgence translates into a nearly one trillion won increase in sales, approaching the significant threshold after a three-year hiatus.

Uniqlo, having achieved its inaugural 1 trillion won in sales in the 2014 fiscal year and nearing 1.4 trillion won in the 2017 fiscal year, faced a setback in 2019 with a sales plunge to 629.8 billion won — roughly half of the previous fiscal year's figure.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]