FASHION
Uniqlo operator plans HK listing in China drive
RITSUKO SHIMIZU
ELZIO BARRETO
TOKYO/HONG KONG : japan’s Fast Retailing Co Ltd will list in Hong Kong as the operator of the Uniqlo casual clothing chain seeks to raise ils Asian profile en route to becoming the world’s top apparel retailer by 2020.
Fast Retailing is focusing on Asia to help it quintuple revenue to almost $50 billion, taking it past Zara operator Inditex SA , Hennes & Mauritz AB and Gap Inc.
Asia’s biggest clothing retailer by market value said yesterday that it would list in Hong Kong on March 5 to boost its profile, demonstrate commitment to the region, and make its stock available to a wider pool of investors.
The company said it planned – to list Hong Kong Depositary Receipts – which will allow investors to buy its Tokyo-listed shares through the Hong Kong Stock Exchange – rather than by selling shares to raise funds.
“We chose Hong Kong among the many bourses out there because Hong Kong is the centre of financial markets in Asia,” chief financial officer Takeshi Okazaki said at a Tokyo news conference.
“By increasing brand awareness further, we’re aiming to accelerate our overall expansion.”
“Offering shares through other overseas exchanges is a possibility as a strategy for raising the company’s profile,” Okazaki said.
Morgan Stanley is sponsoring the Hong Kong listing, which is pending approval from the bourse.
Shares of Fast, Retailing, which have the most weighting in Tokyo’s benchmark Nikkei index, were down 1.9% yesterday, after erasing some earlier losses. The Nikkei was down 2.2%.
Listing in Hong Kong for branding purposes has been popular among companies looking to appeal to investors and consumers in the city and the rest of Greater China.
Two companies have already taken that road in January, compared with five for all of 2013 and just two in 2012.
Those listing without selling shares in the past few years include US-based luxury group Coach Inc and casino operator Melco Crown Entertainment Ltd.
Such listings – known as listing by introduction – have had limited success compared with typical initial public offerings because there are no new shares to trade. Coach’s depositary receipts were not traded over three straight days last week.
Companies and investment bankers have said listing by introduction could serve as a platform to raise capital in the future, but since 2010, only three of 24 companies have raised funds after introductions.
Fast Retailing, which has built up cash reserves in recent years thanks to growing sales, said its Hong Kong listing was not aimed at raising funds. REUTERS
People walk in front of the flagship store of Japan’s cheap – chain clothing chain Uniqlo in Tokyo yesterday. The operator of Uniqlo said it was planning a secondary share listing in Hong Kong, as the company expands the brand across Asia and beyond.