UNIQLO 00

01.1.9 3:56 PM ページ 22000 ANNUAL REPORT
Year Ended August 31, 2000

FAST RETAILING CO., LTD.

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PROFILEFAST RETAILING CO., LTD., is the company behind the UNIQLO brand of casual clothing. The Company
manages all facets of its business, from product planning and design, to production, distribution and sales.

Y

Its shares are listed on the First Section of the Tokyo Stock Exchange.
During fiscal 2000, ended August 31, 2000, the Company recorded net sales of ·229.0 billion, generated by
433 stores and 1,265 employees. Today, FAST RETAILING is Japan s No. 1 casual clothing chain .

CONTENTS

01
03
06
13
34
35
36
37

FINANCIAL HIGHLIGHTS

DEAR SHAREHOLDERSN

PRINCIPLES AND FUTURE DIRECTION OF FAST RETAILING

FINANCIAL SECTIONSTORE NETWORK6CORPORATE HISTORYINVESTOR INFORMATIONCORPORATE DATAF O R W A R D - L O O K I N G S TAT E M E N T S

Statements in this annual report, other than those of historical fact, are forward-looking statements about the
future performance of FAST RETAILING that are based on management s assumptions and beliefs in light of
information currently available, and involve known and unknown risks and uncertainties. Actual events andresults may differ materially from those anticipated in these statements.

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FINANCIAL HIGHLIGHTS
Thousands of
U.S. Dollars

Millions of Yen

Years ended August 31

2000

1999

1998

1997

1996

2000

¥ 228,986¥111,082¥83,121¥75,021¥59,959$2,147,075

Operating income

60,62814,344

6,840

5,866

5,044

568,473

Net income

34,514

6,817

2,924

2,704

2,327

323,621¥1,301.98¥ 259.29¥111.49¥113.38¥115.04

150.0

27.0

10.0

10.0

10.0

1.41

¥ 153,261¥ 73,552¥47,848¥41,655¥37,223$1,437,045

Total shareholders equity

66,40933,61826,00923,33520,859622,680

Number of shares issued

26,518,414

26,461,005

26,229,924

23,845,386

21,677,624

Net sales

Diluted net income per share (yen)Dividends per share (yen)Total assets

$

12.21

Notes: 1. U.S. dollar amounts have been translated for convenience only at the rate of ¥106.65=US$1, the approximate exchange rate prevailing on August 31, 2000.
2. FAST RETAILING maintains two subsidiaries, but due to their limited contribution to overall performance, has chosen not to prepare consolidated financial
statements.

60.0

75.0

83.1

111.1

229.0

(FY) 96

97

98

99

00

5.0

5.9

6.8

14.3

60.6

2.3

2.7

2.9

6.8

34.5

(FY) 96

97

98

99

00

(FY) 96

97

98

99

00

NET SALESOPERATING INCOME

NET INCOME(Billions of Yen)

(Billions of Yen)

(Billions of Yen)

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D

UNIQLO isUwa modern Japanese company

isthat inspires the worldi·to dress casual

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Dear Shareholders
Fiscal 2000: A Year of Breakthroughs
Fiscal 2000 was a year of revolutionary breakthroughs for
FAST RETAILING. Net sales for the period nearly doubled from theprevious year, climbing to ·229.0 billion, and operating income
recorded an astonishing 322.7% increase to ·60.6 billion. Net income
soared to ·34.5 billion, about five times greater than net income for theprevious year.
Although our essential business qualities have not changed over the
past year, we boosted customers recognition and acceptance of the
UNIQLO brand, which are the determining factors behind our accomplishments. Fiscal 2000 was the year inwhich more and more people began to receive our message that we are a modern Japanese company thatinspires the world to dress casual. Today, consumers do not see UNIQLO as a chain of suburban casual clothing
stores, but as Japan s No. 1 casual brand.
During fiscal 2000, we substantially changed our corporate structure. As a result, nearly all businessindicators rose to their highest levels. We now foresee the future possibility of achieving annual net sales of·500 billion.
Standing at the Crossroads
We have come to a turning point in our business development, where we are facing the challenge of establishing
UNIQLO as a permanent national brand, such as the Gap in the United States or Marks & Spencer in the United
Kingdom. Our entire management team is considering the options and paving a solid path for UNIQLO s
growth, to avoid FAST RETAILING becoming a clothing industry has-been.
Getting Back to Basics
Our fundamental corporate policy is to continually provide consumers with quality and fashionable low-priced
casual clothing. Therefore, we focus on realizing low-cost management and achieving well-planned customer
services.
Promises to Our Customers
Our daily earnings depend entirely on the UNIQLO stores. Because of this, we have made three promises to ourcustomers:● To keep our floors impeccably clean for comfortable shopping● To prevent insufficient stocking of advertised products. If stock is low, we quickly order replacements or
substitutes● To unconditionally accept product returns within three months of the purchase date.
We require all staff to keep these promises to ensure maximum customer satisfaction.
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Dear Shareholders

Entering a New Stage of Growthb

We are currently at the doorway of a new stage of growth. We are creating a new, dynamic infrastructure basedpon a carefully planned business model. Although we will always stand by our basic principles, we are willing to
set aside old conventions for planning, production, distribution and sales, and move forward with confidence.

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Of course, the goal remains the same to have loyal and satisfied customers.

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Evolving into the Brand of Choice

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UNIQLO started as a single shop, grew to be a chain of stores, and has now evolved into a highly visible brand.

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The first stage began in 1984, when the original UNIQLO store opened in Hiroshima. This stage representedgthe starting point of UNIQLO as a casual clothing store. The next defining period began when we opened 33

m

UNIQLO shops between the fall/winter seasons of 1991 and 1992, increasing the UNIQLO network to 55

Ndirectly operated stores. This marked the beginning of our existence as a casual clothing chain, and initiated anaexpansion plan calling for the opening of 30 stores per year. The third significant stage in our development wasbthe opening of a flagship store in Harajuku, Tokyo s representative fashion district, sparking widespreadrecognition of the UNIQLO brand.

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We always seek feedback from our customers, because they determine what type of company we are,what we sell and where our real value lies. FAST RETAILING has been extremely sensitive to the needs of customers and has aimed to immediately turn their wishes into actual products. We are building a brand, and at thesame time, creating casual direct business. We need to directly connect production and sales, and become
a company of targeted merchandising and marketing.
Until now, our key competitors have been specialty shops and large-scale discount stores. As we are

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Dear Shareholders

broadening the scope of our business, the UNIQLO brand will now compete with the world s fashion
powerhouses.
Our message to the market is that we are a modern Japanese company that inspires the world to dresscasual. UNIQLO is not a discount clothing store, nor is it a specialty store or a clothing manufacturer. It is aunique business unto itself.
Taking on the WorldFAST RETAILING is aiming to become an internationally recognized retailer. Making UNIQLO accessible
globally will be a vital step in getting more people to understand who we are and what we are about. Overseas
markets are home to many large-scale competitors and rivalry is always intense, particularly in cities such as
New York, London and Paris. To compete in these markets, we will need to have a minimum of ·300 billion in
annual net sales, an established position as Japan s leading fashion company and an internationally positioned
brand.
In closing, I would like to express my gratitude to all shareholders and ask for your continuing support of
FAST RETAILING.

Tadashi Yanai, President & Chief Executive Officer
November 2000

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Principles and Future Directionof Fast Retailing

Business Model
Our corporate mission is to continually offer fashionable, good quality, basic casualclothing at the most reasonable prices, for people of all ages and backgrounds. To
accomplish this, we have established an integrated system to control all facets ofoperations, including product planning, material development, design, procurement of raw materials, production,
distribution and sales. To maintain maximum quality for our products and services, and at the same time to curtail
prices, we have established partnerships with highly skilled companies worldwide. We also recognize that FASTRETAILING must take full responsibility for all risks, especially those relating to volume of production, to let ourbusiness partners contribute proactively. Currently we have relationships with major materials manufacturers,
top-tier production plants in China and Southeast Asia, Japanese trading houses and distribution companies. As aresult, we are able to run an efficient, high-quality and low-cost operation.
Merchandising & Production
All our product planning and design is handled in-house. About 90% of production is consigned to partners in
China, while the rest of manufacturing is conducted in Southeast Asia. To create competitive products,
specifications for product planning, design, pattern-making and tailoring are based on information gathered frommarket surveys, in-store customer feedback and our call centre. Raw materials are the most important elements ofproduct value and quality. We have strengthened our relationships with material manufacturers and textile
companies to ensure steady procurement of materials. This effort has improved our product development
capabilities.
We continue to expand our overseas facilities to ensure product quality. We established a production
management office in Shanghai to deepen relations with our production partners in China and promote better
quality assurance. To further enhance quality control, we opened an office in Guangzhou, China, in September
1999. To directly reflect the requests of customers, the employees at these two offices manage quality and production
flow of the plants.
In determining production for each fiscal year, we consider the previous
year s sales volume, market predictions, promotional activities and otherfactors. Along with our projections for demand, we draw up production plansfor each factory and product. We are refining our supply chain management
system, including production flow management, supplemental output, capacity
adjustments and inventory control, to deliver the right volume of products at theright time.

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CUSTOMER COMMENTSP R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N G

Customers

Direct retailing<CUSTOMER
Catalog business >Store operations

Internetinsales< <Factories
China> >Distribution center

Inventory control
ImportHandling of distribution orders,
based on sales information from outlets

Production management

Production< Shanghai > < Guangzhou >Control of production process,quality and delivery< Factories in China >Production plans

Designspecifications< Yamaguchi > < Tokyo >Market surveys

Product planning and design

Listening to what customers and store
employees have to say andwatching market trends< Yamaguchi > < Tokyo >7

PRODUCT FLOWRESPOND TO MEET CUSTOMER DEMAND

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P R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N G

Supply Chain Management
The objective of supply chain management is to ensure stores always carry the
optimal volume of products in the colors and sizes desired by customers. We
must synchronize demand and production at the stock keeping unit (SKU)
level, and maintain an appropriate inventory level at each store.
We are currently designing a system that is able to match supply withdemand. Under this system, we will track weekly and monthly sales,
revise promotional plans and continually update sales forecasts for eachproduct based on its color and size. These projections will then be used torevise production plans and adjust inventory. We are also restructuring ourorder and distribution system to control inventories at each store.

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A

Marketingw

The first component of our marketing operations consists of performing regularcpromotions focused on a core product that we have the utmost confidence inselling. These activities maintain a steady volume of foot traffic in our stores. Wewutilize a variety of media, such as advertisements, publicity events, in-store visualbmerchandising and the Internet, to convey precise product image and seasonal
product information. We have been successful in expanding our sales using theseTmarketing tools.

pBrand building is the second key aspect of our marketing program and involves the entire Company. We
strive to convey an integrated UNIQLO identity to customers through our stores,t

products, advertisements and other communication opportunities.

dFinally, market analysis helps us improve products and services. Everytmember of the Company works together to understand our customers, to providemthe steady flow of services and products they seek.

s

s
c

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P R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N GStore Operations
At UNIQLO stores, the customer always comes first. We focus on what customers want to buy, and not on what wewant to sell. Our store staff put themselves in the customer s shoes to create an ideal shopping environment. We arecommitted to making sure everyone who buys UNIQLO is satisfied.
We believe customer satisfaction is critical to continuous earnings growth. Because almost all interaction
with customers takes place at UNIQLO stores, we believe it is vital to gear all in-store undertakings towardbuilding a long-lasting base of satisfied customers. Therefore, we view our basic corporate structure as follows:
Customer ⇔ UNIQLO Stores ⇔ Store Support Centre
The store support centre comprises all FAST RETAILING s operations performed outside the store. The center
provides support for our stores and, as a result, structures its functions around them.
Improving productivity is currently a key issue, not just for the retailing industry but for many other industries as well. Improving the productivity of each store is particularly important for our company, because we
directly manage a majority of our outlets. We aim to boost output capacity to levels equivalent to that of a hightech company, by employing a small staff of elite salespersons at each store. It is necessary to improve the management capability of each store manager and train sales staff to ensure a high level of product knowledge and service
skill. We will achieve these goals through:1. Implementation of the “superstar” store manager system
Once store managers reach a certain level of expertise, they are promoted to superstar manager and given
authority to make a wide range of decisions. These managers assume responsibility for the store s performance as if it were their own business. Their remuneration is closely linked to the store s sales performance.
2. Training and increasing the number of long-term contract employees
Our success depends on our people, who provide customers with the best services. Training people to run ourstores properly is crucial to keeping customers satisfied. By understanding and committing to the UNIQLO brandconcept, each employee can help grow the brand and satisfy customers.

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P R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N GStore Development
During fiscal 2000, we opened 67 stores and closed three. Nearly half ofthese new stores were opened in shopping centers in major cities, including shopping plazas in train stations. Since opening our first metropolitan
flagship store in Harajuku in November 1998, we have been dedicated todeveloping the urban market. We have also continued to expand in suburban areas, particularly in local shopping centers, where a third of new
suburban stores were opened. Some 42 stores were established in the Kanto region, mainly in Kanagawa andTokyo, reflecting our strong desire to increase our presence in the Tokyo metropolitan area.
Our expansion strategy from fiscal 2001 onward is to (1) capture large markets through store openings inmajor cities such as Tokyo, (2) expand floor space to handle larger sales and increased visitors, and (3) open storesin shopping malls located in commercial areas. Full-scale scrap-and-build programs are in line to promote thefloor-space expansion of existing stores. We plan to open 110 stores and close 30 in fiscal 2001, and open 120 storesand close 40 during fiscal 2002 and 2003. We expect about 80 net store openings each year for the next three years.
In fall/winter 2000, we plan to open two small stores within the premises of train stations in conjunction with
East Japan Railway Co. and its related KIOSK stores.
Direct Retailing
In September 1999, we initiated a trial run of our catalog business, to promote the establishment of a direct
retailing avenue and provide added value to our products and services outside our stores. The catalog businessproved to be a ·1.5 billion market in its first year. To respond to higher customer demand for direct sales, we
decided to start a full-scale catalog business from fiscal 2000. In January 2000, we established an affiliation withSimree Co., Ltd., a catalog sales operator. Another direct sales avenue that will offer further convenience forcustomers is Internet sales, which we began in October 2000.
For us this is not just a means of providing trustworthy direct sales to increase earnings. It is the beginning ofa new retailing concept that will allow anyone to buy UNIQLO products from anywhere and at any time they want.
Embarking Overseas
We aim to become a global brand. We chose the United Kingdom to be the first step in our
expansion abroad, and established FAST RETAILING (U.K.) LTD, a 100%-owned subsidiary, in June 2000. Our first London store will open in fall 2001. We aspire toopen 50 stores in the United Kingdom over the next three to four years. By putting all our efforts into the U.K. market, we hope to gain wide acceptance andmake UNIQLO its No. 1 casual clothing store. We plan to create an organization
supported by highly skilled staff, and run a business that will blend with the local
business environment.

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P R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N G

tv commercialS&C AMPAIGNS11

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P R I N C I P L E S A N D F U T U R E D I R E C T I O N O F FA S T R E TA I L I N GStores12

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financial section
SIX-YEAR FINANCIAL SUMMARY

MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITIONS AND RESULTS OF OPERATIONSBALANCE SHEETSSTATEMENTS OF INCOME

STATEMENTS OF SHAREHOLDERS’ EQUITYSTATEMENT OF CASH FLOWSNOTES TO FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REPORT

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20
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Six-Year Financial Summary

M
F
Millions of Yen

Years ended August 31

2000

1999

1998

1997

1996

1995

Net sales¥228,986¥111,082¥83,121¥75,021¥59,959¥48,692

Net income

34,514

6,817

2,924

2,704

2,327

2,108

Total shareholders equity

66,40933,61826,00923,33520,85918,707

Total assets

153,261

73,552

47,84841,65537,22333,258

Yen

Shareholders equity per share¥2,504.25¥1,270.47¥991.58¥978.59¥962.23¥1,725.89

Dividends per share

150.00

27.00

10.00

10.00

10.00

10.00

Interim dividends

50.00

7.00

5.00

5.00

5.00

5.00

Diluted net income per share

1,301.98

259.29111.49113.38115.04203.62

Dividend payout ratio (%)

11.50

10.46

8.97

8.82

9.32

5.14

Return on equity (%)

69.0

22.9

11.9

12.2

11.8

11.9

Equity ratio (%)

43.3

45.7

54.4

56.0

56.0

56.2

26,518,414

26,461,005

26,229,924

23,845,386

21,677,624

10,838,812

Number of stores

433

368

336

276

229

176

Number of franchise stores

12

11

11

11

10

9

Number of regular employees

1,265

1,055

950

798

622

534

Number of shares issued

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Management’s Discussion and Analysis ofFinancial Conditions and Results of Operations

The financial information in this section is based on the nonconsolidated financial statements found elsewhere in thisannual report. The financial statements have been prepared in accordance with accounting principles generally acceptedin Japan. FAST RETAILING maintains two subsidiaries, but due to their limited contribution to overall performance,
has chosen not to prepare consolidated financial statements.

RE SU LTS OF OPER ATION SNet Sales
During fiscal 2000, ended August 31, 2000, consumer spending in Japan failed to make a full-scale recovery. Reflecting
this, fashion retailers unable to respond to consumers needs continued to struggle. FAST RETAILING, however, wasable to meet its customers demands by successfully launching campaigns for products such as fleece jackets, denim
jackets and stretch pants. We effectively highlighted product value through visual merchandising and in-store
promotions, and through newspaper, magazine, television and other media promotions. As a result, we significantly
outperformed our initial sales outlook. Thanks to these effective promotional strategies, we boosted consumer
recognition of the UNIQLO brand and recorded favorable sales for a broad range of clothing items. Visitors to ourexisting stores grew 72.2% from the previous year and foot-traffic at our direct-run outlets soared 115.4%. Sales atexisting stores climbed 67.7%, while sales at direct-run stores skyrocketed 107.1%. Consequently, we recorded net
sales of ·229.0 billion, a 106.1% increase on the previous fiscal year s ·111.1 billion .

Millions of Yen

Net sales

2000

1999

1998

¥228,986¥111,082¥83,121All categories saw brisk growth, with the exception of National Brands brands of other companies which weplan to discontinue. In particular, our Women s Clothing category lineup expanded, and through sales of such products
as stretch pants and denim jackets, recorded a spectacular 173.5% improvement, to ·51.3 billion. Our Cut & Sewn
category also posted strong sales growth of 149.4%, to ·54.2 billion. It should be noted that from fiscal 2000, catalog
sales have been included in each category s sales. Catalog sales for the period amounted to ·1.5 billion .

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Management’s Discussion and Analysis of Financial Conditions and Results of Operations

Sales by Category

Millions of Yen

2000

1999

1998

Children s Clothing¥ 14,929¥ 6,110¥ 3,865

Women s Clothing

51,272

18,745

12,132

83

10,205

9,862

Outerwear

15,302

8,448

6,135

Sweaters

10,911

6,225

5,095

Cut & Sewn

54,203

21,734

16,273

Shirts18,548

8,684

5,772

Slacks (Pants)

22,656

12,252

9,720

Accessories

37,981

16,534

12,254

Subtotal

225,885

108,937

81,108

Products supplied to franchise stores

2,689

1,821

1,540

Administrative charges

352

272

288

Fees from in-store alterations

60

52

185

¥228,986¥111,082¥83,121

National Brands

Total sales
Notes:

1. Administrative charges are royalty income received from franchises.
2. Fees from in-store alterations comprise income from fitting and mending, such as hemming.
3. The above figures do not include consumption tax.

We continued to actively expand in urban areas. We opened 67 direct-run stores and one franchise, including stores
located in urban shopping areas and station buildings. We also closed down three stores to rebuild larger stores innearby areas. Owing to our efforts, our network of UNIQLO stores grew to 433 outlets nationwide, including 12
franchises, by the end of fiscal 2000. Store expansion was considerably noticeable in the Kanto region, with 42 newstores and one closure, and in the Kansai region, with 10 store openings.

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Store Openings and Closures
2000

1999

1998

Store openings

67

38

78

Closures3

618

Increase in store numbers

64

32

60

¥6,218¥3,363¥6,127

Capital spending (millions of yen)
Note:

Total capital spending for the period of ·6.2 billion includes forward investments for stores to be opened
during fiscal 2001, ending August 31, 2001.

Number of Stores by Region
2000

1999

1998

Hokkaido-Tohoku

31

26

22

Kanto

143

102

86

Chubu

68

63

61

Kansai84

74

64

Chugoku

21

20

19

Shikoku

15

15

16

Kyushu-Okinawa

59

57

57

Direct-run stores

421

357

325

Franchises

12

11

11

Total

433

368

336

186,801.10

157,424.03

143,487.78

Total floor space (m2)

IncomeEarnings and profit structure improved significantly. Gross profit increased 143.5% from the previous year, to ·112.5
billion. Operating income escalated 322.7%, to ·60.6 billion. The Company s operating margin rose from 12.9%, to26.5%. This increase in performance was due mainly to solid sales at both existing stores and outlets newly added
during the fiscal year. Owing to fewer losses on markdowns, the ratio of selling, general and administrative (SG&A)
expenses to net sales fell from 28.7%, to 22.7%. The ratio of personnel expenses to net sales dropped from 10.2%, to9.2%. The ratio of advertising and promotion costs to net sales declined from 6.0%, to 4.4%, and the ratio of rents to
net sales was curtailed to 4.5%, from 7.2%.

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Management’s Discussion and Analysis of Financial Conditions and Results of Operations

Breakdown of Key Expenses
2000

1999

1998

Millions Percentage Percentage
of Yento Sales Change

Millions Percentage Percentage
of Yento Sales Change

Millions Percentage Percentage
of Yento Sales Change

Personnel¥21,128

9.2

186.8

Advertising and promotion costs

10,036

4.4

151.3

6,632

Rents

10,3474.5

129.4

Depreciation and amortization

806

0.4

Others

9,550

Total

128.0

¥ 8,837 10.6

126.0

6.0

111.3

5,959

7.2

108.1

7,998

7.2

114.5

6,986

8.4

124.3

108.8

741

0.7

113.5

653

0.8

158.2

4.2

184.4

5,180

4.6

106.5

4,862

5.8

126.0

¥51,867 22.7

162.8

¥31,861 28.7

116.7

¥27,297 32.8

121.8

¥11,310 10.2

Thanks to cost cutting, income before income taxes rose 329.2%, to ·60.0 billion. Net income for the period
increased 406.3%, to ·34.5 billion. Return on sales improved from 6.1%, to 15.1%. Return on equity (ROE) expanded
to 69.0%, from 22.9%.
Our policy is to secure a stable management foundation over the long-term and continue providing value to ourshareholders based on our performance. Thanks to favorable earnings, we were able to issue a ·150 cash dividend, up
from ·27 for fiscal 1999. As a result, total dividends paid rose to ·4.0 billion, 457.0% higher than a year earlier, with adividend payout ratio of 11.5%. The dividend-to-equity ratio rose to 6.0%, compared with 2.1% in the previous term.

L I QU ID ITY AN D FIN AN CIN G

Assets, Liabilities and Shareholders’ Equity
Cash rose 118.2%, to ·53.4 billion, while marketable securities increased 202.5%, to ·46.2 billion. The Company
concentrates on safe and liquidable investments, and its marketable securities mainly comprise money market funds
and medium-term government securities funds. Meanwhile, merchandise rose 104.6%, to ·20.1 billion. Reflecting
these figures, the Company s total current assets increased 141.5%, from ·52.1 billion in the previous fiscal term, to·125.9 billion .
Total investments and other assets grew 29.0%, to ·18.8 billion, because of store expansion, including payments fordeposits and construction assistance fund receivables. FAST RETAILING recorded ·1.7 billion in treasury stock
following the implementation of a stock option plan this fiscal year. As a result of these factors, total assets expanded
108.4% from ·73.6 billion, to ·153.3 billion .
Total current liabilities grew in tandem with business, rising 161.3%, to ·76.2 billion. This consisted mainly of anincrease in accounts payable, 123.6% higher than a year earlier, to ·42.8 billion, and a 315.9% rise in accrued income
taxes, to ·23.0 billion. Total long-term liabilities dipped 0.9%, to ·10.7 billion. Consequently, total liabilities were up

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117.5%, to ·86.9 billion. The Company s debt ratio went up from 118.8% in the preceding year to 130.8%, and its
current ratio decreased from 178.9%, to 165.3%.
Total shareholders equity rose 97.5% to ·66.4 billion, from ·33.6 billion, as a result of an increase in retained
earnings. The Company s equity ratio dropped from 45.7%, to 43.3%.
At the June 19, 2000, Board of Directors meeting, it was decided that a two-for-one stock split would be initiatedfor shareholders registered as of August 31, 2000, with the split taking place on October 20, 2000. Following the stock
split, the number of outstanding shares was 53,036,828, up from 26,518,414 shares.

C A SH FLOWS

Despite store openings, the launch of catalog sales and the establishment of the U.K. subsidiary, cash and cash
equivalents at end of year rose 150.6%, from ·39.8 billion at the beginning of the year, to ·99.7 billion, reflecting an
increase in income before income taxes.
Net cash provided by operating activities was ·68.8 billion, mainly due to expanded sales, which brought income
before income taxes to ·60.0 billion. Net cash used in investing activities was ·5.1 billion, owing to the opening of 67
stores and renewal of existing stores, of which the Company spent ·2.6 billion for purchases of property and equipment ,and used ·3.7 billion for payments for construction assistance fund receivables and payments for deposits .
Meanwhile, net cash used in financing activities was ·3.8 billion. This included ·1.9 billion for cash dividends paid
and ·1.7 billion for purchase of treasury stock .

O U TLOOKFAST RETAILING will continue to improve. During the next fiscal year, the Company is looking to solve its store
crowding problem and boost customer satisfaction through engaging in scrap-and-build projects to expand floor space,and by opening new stores. The scheme includes the opening of about 110 urban and suburban stores, with about 30
closures scheduled.
We plan to hold full-scale campaigns to promote seasonal products and attract more customers. To achieve this, wewill ensure sufficient production and distribution capacity. We will also fortify our backup production and system for
tracking product inventory based on SKU, to make sure our stores will have sufficient stock of products. Strengthened
distribution of catalogs will support the procurement of a wider customer range and repeat orders for our catalog
business. We will also strive to get our Internet sales on track.

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BALANCE SHEETSFAST RETAILING CO., LTD.
August 31, 2000 and 1999

Thousands of
U.S. Dollars

Millions of Yen(Note 2)

2000

1999

2000

A S S ETS
Current assets:¥ 53,432¥24,485$ 501,005

Marketable securities (Notes 3 and 12)

46,23815,283

433,548

Trade notes and accounts receivable

1,823

648

17,098

(7)

(6)

(67)

Cash (Note 3)

Less—Allowance for doubtful accounts

1,816

642

17,031Inventories (Note 4)

20,646

10,026

193,587

Prepaid expenses

1,070

899

10,030

Deferred tax assets (Note 7)

2,394

545

22,447

Net trade receivables

309

264

2,898

125,905

52,144

1,180,546

Land

2,052

2,051

19,237

Buildings and structures

9,297

7,106

87,173

Furniture and equipment

131

81

1,229

Construction in progress

218

1

2,046

Other
Total current assets
Property and equipment:

11,698

9,239

109,685

Less—Accumulated depreciation(3,212)(2,464)(30,112)Net property and equipment

8,486

6,775

79,573

44

35

406

Investments in securities (Note 12)

62

166

587

Treasury stock (Notes 5 and 12)

1,654

–

15,505Investments in subsidiaries and affiliates (Note 12)

282

202

2,646

Lease deposits

6,688

4,979

62,709Construction assistance fund receivables (Note 10)

9,723

8,829

91,163

Intangible assets
Investments and other assets:

Deferred tax assets (Note 7)

76

66

714

Other

341

356

3,196

18,826

14,598

176,520¥153,261¥73,552$1,437,045

Total investments and other assets
Total assets

See accompanying notes to financial statements.
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UNIQLO 00

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Thousands of
U.S. Dollars

Millions of Yen(Note 2)

1999

2000

2000

L I A B ILITIES AN D SH AR EH OLDERS’ EQUIT Y
Current liabilities:¥

Current portion of long-term debt (Note 6)

–

¥

300

$

–

Accounts payable

42,834

19,160401,629

Accrued income taxes (Note 7)

23,0005,530

215,659

Accrued expenses

10,248

4,086

96,097

87

75

813

76,16929,151

714,198

10,00010,00093,765

683

783

6,402

Total long-term liabilities

10,683

10,783

100,167

Total liabilities

86,85239,934

814,365

3,274

3,174

30,698

11,57911,460108,569

Other
Total current liabilities

Long-term liabilities:
Long-term debt (Note 6)
Other

Shareholders’ equity:
Common stock, ·50 par value :Authorized 80,000,000 shares;
Issued and outstanding
26,518,414 shares—2000
26,461,005 shares—1999
Additional paid-in capital
Legal reserve (Note 8)
Retained earnings (Note 8)
Total shareholders equity

324

129

3,038

51,232

18,855

480,375

66,40933,618622,680¥153,261¥73,552$1,437,045

Commitments and contingencies (Note 10)
Total liabilities and shareholders equity

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STATEMENTS OF INCOMES

FAST RETAILING CO., LTD.

FFor the Years Ended August 31, 2000, 1999 and 1998

F

Thousands of
U.S. Dollars

Millions of Yen(Note 2)

2000

1999

1998

2000

Net sales¥228,986¥111,082¥83,121$2,147,075

Cost of sales

116,491

64,87748,984

1,092,270

112,495

46,205

34,137

1,054,805

51,86731,861

27,297486,332

60,62814,344

6,840

568,473

Interest and dividend income

618

169

117

5,798

Interest expenses

(159)

(155)

(21)

(1,491)

Loss on sale of marketable securities

(509)

–

–

(4,772)fund receivables (Note 10)

–

(221)

–

–

Loss on stores closed

(8)

(133)

(151)

(77)

Loss on disposal of fixed assets

(42)

–

–

(393)

Write-down of investment securities

(11)

(3)

(27)

(105)

Liquidation loss of a subsidiary

(295)

–

(28)

(2,769)Retirement benefits for directors

(122)

(49)

–

(1,140)Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):

Loss on sale of construction assistance

(98)

29

247

(918)

(626)

(363)

137

(5,867)60,002

13,981

6,977

562,606

Current

27,346

7,549

4,053

256,412Deferred(1,858)(385)–(17,427)

25,488

7,164

4,053

238,985¥ 34,514¥ 6,817¥ 2,924$ 323,621

Other, net
Income before income taxes
Income taxes (Note 7):

Net income

Yen

U.S. Dollars

2000

1999

1998

2000

Basic

¥1,301.98¥259.51¥111.49$12.21

Diluted

¥1,301.98¥259.29¥111.49$12.21Per share data:
Net income

See accompanying notes to financial statements.

S
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STATEMENTS OF SHAREHOLDERS EQUITYFAST RETAILING CO., LTD.
For the Years Ended August 31, 2000, 1999 and 1998

Thousands of
U.S. Dollars

Millions of Yen(Note 2)

2000

1999

1998

2000

¥ 3,174¥ 2,774¥ 2,774$ 29,765

Common stock:
Balance at beginning of year

100

400

_

933

¥ 3,274¥ 3,174¥ 2,774$ 30,698¥11,460¥10,979¥10,979$107,450

119

481

–

1,119

¥11,579¥11,460¥10,979$108,569

Balance at beginning of year

¥ 129

¥

¥

70

$ 1,207

Transfer from retained earnings

195

26

1,831

96

$ 3,038

Exercise of warrant
Balance at end of year
Additional paid-in capital:
Balance at beginning of year
Exercise of warrant
Balance at end of year
Legal reserve (Note 8):

96
33

¥ 324

¥

Balance at beginning of year

¥18,855¥12,159¥ 9,511$176,796

Net income

34,514

6,817

2,924

323,621

Cash dividends

Balance at end of year

129¥

Retained earnings (Note 8):(1,852)

(314)

(250)

(17,367)

Bonuses to directors

(90)

–

–

(844)

Transfer to legal reserve

(195)

(33)

(26)

(1,831)

Cumulative effect of change inaccounting principle (Note 1(i))
Balance at end of year

–

226

–

–

¥51,232¥18,855¥12,159$480,375

See accompanying notes to financial statements.
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STATEMENT OF CASH FLOWSNFAST RETAILING CO., LTD.

FFor the Year Ended August 31, 2000

A

Millions of Yen

Thousands of
U.S. Dollars(Note 2)

2000

2000

¥60,002$562,606

805
69
(618)
159
37
11
85
42
(1,175)(10,620)(371)
23,6746,179(90)
78,189618(141)(9,876)
68,7907,555
651(5,798)
1,491
351
105
797
393
(11,019)(99,583)(3,483)221,973
57,945(844)
733,140
5,801(1,321)(92,605)
645,015

Cash flows from investing activities:
Purchases of investment securities
Proceeds from investment securities
Purchases of property and equipment
Collections of loans
Payments for deposit
Collections of deposit
Payments for construction assistance fund receivables
Collections of construction assistance fund receivables
Purchase of intangible fixed assets
Other, net
Net cash used in investing activities

(165)
201
(2,559)161(2,045)219(1,614)677(9)49(5,085)(1,547)
1,883(23,995)
1,505(19,171)
2,057(15,139)
6,350
(82)
457
(47,682)

Cash flows from financing activities:
Proceeds from issuance of common stock
Principal payments of long-term debt
Purchase of treasury stock
Proceeds from sales on treasury stock
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year (Note 3)
Cash and cash equivalents at end of year (Note 3)

199
(453)
(1,734)74(1,852)(3,766)(37)
59,902
39,768¥99,670

1,865(4,249)(16,259)699(17,367)(35,311)(351)
561,671
372,882$934,553

Cash flows from operating activities:
Income before income taxes
Adjustments to reconcile income before income taxes to net
cash provided by operating activities:
Depreciation and amortization
Increase in allowance for doubtful accounts
Interest and divided income
Interest expenses
Exchange losses
Write-down of investment securities
Liquidation loss of a subsidiary
Loss on disposal of fixed assets
Increase in trade receivables
Increase in inventories
Increase in other assets
Increase in trade payables
Increase in accrued expenses and other liabilities
Bonuses to directors
Interest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities

See accompanying notes to financial statements.
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NOTES TO FINANCIAL STATEMENTS
FAST RETAILING CO., LTD.
August 31, 2000, 1999 and 1998

1 . BASIS OF PR ESEN TATION AND SUM M ARY OF SIGNIFICANT ACCOUNT ING PO L I C I E S(a) Basis of Presentation
FAST RETAILING CO., LTD. ( the Company ) maintains its books of account in accordance with the provisions set
forth in the Japanese Commercial Code, the Securities and Exchange Law, and in conformity with accounting
principles and practices generally accepted in Japan, which may differ in some material respects from accounting
principles and practices generally accepted in countries and jurisdictions other than Japan. In preparing theaccompanying financial statements, certain reclassifications have been made for the convenience of the readers outside
Japan. In addition, the notes to the financial statements include additional information, which is not required under theaccounting principles generally accepted in Japan.
The accompanying financial statements include only the accounts of the Company. The accounts of its subsidiaries
are not consolidated due to there being no material effect on total assets, net sales, net income and retained earnings,
respectively.
(b) Foreign Currency Translation
Foreign currency transactions are translated into yen on the basis of the rates in effect at the transaction date, except for
those covered by firm forward exchange contracts which are translated at such contract rates. At the year end,monetary current assets and current liabilities denominated in foreign currencies are translated into yen at the rates of
exchange in effect at the balance sheet date, and monetary non-current assets and liabilities denominated in foreign
currency are translated into yen at historical rates. However, material unrealized translation losses on monetary noncurrent assets and liabilities have to be calculated using the rates of exchange in effect at the balance sheet date. Gainsor losses resulting from the translation of foreign currencies, including gains and losses on settlement, are credited or
charged to income as incurred.
(c) Inventories
Inventories are stated at cost. Cost is determined by the specific identification method on a lot basis.
(d) Property and Equipment
Property and equipment, including significant renewals and additions, is stated at cost. Depreciation is computed by
the declining-balance method over the estimated useful lives of the respective assets.
Normal repairs and maintenance, including minor renewals and improvements, are charged to income as incurred.
(e) Leases
Under Japanese accounting standards for leases, finance leases that have been deemed to transfer ownership of theleased property to the lessee are to be capitalized, while other finance leases are permitted to be accounted for as
operating leases.
The Company has accounted for finance leases as operating leases, since the Company s leases do not have theterms of transfer of ownership.

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NOTES TO FINANCIAL STATEMENTS(f) Marketable Securities and Investments in Securities
Listed securities are stated at the lower of cost or market, cost being determined by the moving average method. Other
than listed securities are stated at cost, cost being determined by the average method.
(g) Investments in Subsidiaries and Affiliates
Investments in subsidiaries and affiliates are stated at cost.
(h) Allowance for Doubtful Accounts
The Company provides for doubtful accounts principally at an estimated amount of probable bad debt plus the
maximum amount deductible under Japanese tax regulations.
(i) Income Taxes
Effective September 1, 1998, the Company adopted Accounting Standards for Deferred Income Taxes issued by theBusiness Accounting Deliberation Council. These standards require that deferred income taxes are accounted for under
the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized
for the expected future tax consequences attributable to differences between the financial statement carrying amounts ofexisting assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be
recovered or settled. Previously, deferred tax assets and liabilities arising from temporary differences were notrecognized.
The cumulative effect of the change in accounting principle for deferred income taxes was to increase retained
earnings at September 1, 1998, by ·226 million .
(j) Net Income per Share
The computation of basic net income per share is based on the weighted average number of shares outstanding during
each year. Diluted net income per share is computed based on the weighted average number of shares of common
stock outstanding during each year after giving effect to the dilutive potential of the shares of common stock to beissued upon the exercise of warrants.
(k) Cash and Cash Equivalents
For the year ended August 31, 2000, the Company adopted Statement of Cash Flows issued by the BusinessAccounting Deliberation Council. For the purpose of the statement of cash flows, all highly liquid investments withinsignificant risk of changes in value, which have original maturities of three months or less, are considered cash
equivalents.

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2 . BASIS OF FIN AN CIAL STATEM ENT T RANSLAT ION

The accompanying financial statements are expressed in yen and, solely for the convenience of the reader, have beentranslated into United States dollars at the rate of ·106.65 to U.S.$1.00, the approximate exchange rate prevailing on
the Tokyo Foreign Exchange Market as of August 31, 2000.

3 . C ASH AN D CASH EQU IVA LENT S

Cash and cash equivalents as of August 31, 2000 and 1999, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

Cash

¥53,432¥24,485$501,005

Marketable securities

46,23815,283

433,548

Cash and cash equivalents¥99,670¥39,768$934,553

4 . I N VEN TOR IES

Inventories as of August 31, 2000 and 1999, are summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen

Merchandise
Supplies

2000

1999

2000

¥20,124¥ 9,838$188,692

522

188

4,895

¥20,646¥10,026$193,587

5 . STOCK OPTION PLAN

At a shareholders meeting held on November 26, 1999, shareholders approved that the Company may purchase 50,600
shares of its common stock within the period from November 26, 1999, to the closing of the next ordinary shareholders
meeting, with an upper limit to an aggregate purchase cost of ·2,500 million ($23,441 thousand). Certain officers andother employees may be granted the option to purchase the Company s common stock at exercise price of lower of
102.5% of the average purchase cost or the market price at the date of grant. Granted persons can exercise 50% of the
granted option from November 27, 2001 to November 26, 2002, and can exercise 100% from November 27, 2002 to
August 31, 2004.
According to the shareholders approval, the Company purchased 48,200 shares of its common stock. The
aggregate purchase cost was ·1,654 million ($15,505 thousand) during the year ended August 31, 2000 .

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NOTES TO FINANCIAL STATEMENTS

6 . LON G -TER M D EB T

Long-term debt is summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

¥10,000¥10,000$93,765

Unsecured loans from Japanese banks
1.88% to 1.95% interest, due 2003

–

300

–

10,00010,30093,765

–

(300)

–

¥10,000¥10,000$93,765

3.05% unsecured bonds, due 2000
Less—Current portion

The aggregate annual maturities of long-term debt after August 31, 2001, are as follows:Year ending August 31

Millions of Yen

Thousands of
U.S. Dollars

2003¥10,000$93,765

7 . I N COME TAX ES

The Company is subject to a number of taxes based on income, which in the aggregate resulted in normal income tax
rates of approximately 41.8% and 46.9% for the years ended August 31, 2000 and 1999, respectively. A reconciliation
between the Company s effective tax rate and the normal tax rate for the years ended August 31, 2000 and 1999, are as
follows:
2000

1999

Normal income tax rate

41.80%

46.90%Per capita tax

0.33

1.09

–

3.02

Other

0.36

0.23

Effective tax rate

42.49%

51.24%

Surtax on undistributed profit of family corporation

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Tax effects of temporary differences that give rise to a significant portion of the deferred tax assets as of August 31,
2000 and 1999, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

¥2,035¥453$19,081

receivables

76

66

714

Other

359

92

3,366

¥2,470¥611$23,161

Deferred tax assets:
Accrued business tax
Loss on sales of construction assistance fundTotal deferred tax assets

8 . L EG AL R ESERVEThe Japanese Commercial Code provides that an amount equal to at least 10% of appropriations paid in cash, such as
cash dividends and directors bonuses, shall be appropriated as legal reserve until such reserve equals 25% of statedcommon stock. This reserve is not available for dividends, but may be used to reduce a deficit by approval at thegeneral meeting of shareholders or may be transferred to stated common stock by resolution of the Board of Directors.
Cash dividends, directors bonuses and appropriations to the legal reserve charged to retained earnings during theyears ended August 31, 2000, 1999 and 1998, represent dividends and bonuses paid out during those years and therelated appropriations to the legal reserve. The accompanying financial statements do not include any provision for thesemiannual dividends of ·100 ($0.94) per share totaling ·2,647 million ($24,819 thousand) or directors bonuses of·360 million ($3,376 thousand), approved by the Board of Directors in respect of the year ended August 31, 2000 .

9 . RELATED PAR TY TR AN SACT IONS

Balances and transactions with subsidiaries and affiliates as of and for the years ended August 31, 2000, 1999 and 1998,
are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

Due from subsidiaries and affiliates

¥ 1

¥ 9

$ 5

Due to subsidiaries and affiliates

¥ 4

¥ 2

$ 38
Thousands of
U.S. Dollars

Millions of Yen

2000

1999

1998

2000

Purchases

¥ 93

¥ 96

¥ 337

$ 872

Miscellaneous income

¥ 19

¥ 19

¥ 19

$ 175

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NOTES TO FINANCIAL STATEMENTS

1 0 . COMMITMEN TS AN D CONT INGENCIESThe Company had the following contingent liabilities as of August 31, 2000:
Millions of Yen

Thousands of
U.S. Dollars

Unconsolidated subsidiaries and affiliates¥126$1,183

Employees mutual society¥ 8$

Loan guarantees for:77

Construction assistance fund receivables represent an interest-free loan granted to real estate owners to construct stores.
The constructed stores are leased by the Company from real estate owners. The Company transferred the construction
assistance fund receivables to a trust bank during the year ended August 31, 1999. This transfer contains a recourse
provision where the Company has an obligation to repurchase the transferred construction assistance fund receivables if
the landowner fails to repay. The total outstanding transferred construction assistance fund receivables to a trust bankamounted to ·2,676 million ($25,089 thousand) as of August 31, 2000 .

11 . LEASES

Lease payments relating to finance leases accounted for as operating leases for the years ended August 31, 2000, 1999
and 1998, amounted to ·1,626 million ($15,245 thousand), ·1,416 million and ·1,313 million, respectively .
Future minimum lease payments relating to finance leases accounted for as operating leases as of August 31, 2000,
are as follows:Year Ending August 31

Millions of Yen

Thousands of
U.S. Dollars

2001¥1,516$14,217

Thereafter¥3,494$32,764

1 2 . MAR K ET VALU E IN FOR M AT ION OF SECURIT IES

The following is a summary of book value, market value and net unrealized holding gains of marketable securities:
Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

Book value¥1,695¥145$15,894

Market value

1,715

160

16,078

Unrealized holding gains

¥ 20

¥ 15

$

Non-current assets

184

The market value of listed securities is mainly based on the closing prices of the Tokyo Stock Exchange.

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Book values of non-marketable securities excluded from the above information consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2000

1999

2000

¥46,238¥15,283$433,548

Unlisted stocks

¥

21

¥

21

$

Affiliated companies

¥

282

¥

202

$ 2,646

Current assets:
Short-term government, municipal
and corporate bond funds
Non-current assets:
198

1 3 . D ER IVATIVESThe Company utilized forward exchange contracts to hedge certain foreign currency transactions related to foreignpurchase commitments. The purpose of the Company s hedging activities in the form of forward exchange contracts isto protect the Company from the related market risks.
The Company also utilized interest rate swap agreements to minimize the impact of interest rate movements related
to its outstanding debt on the Company s operating results. The purpose of interest rate swap agreements is toeffectively modify the characteristics of interest applied to the outstanding debt.
As of August 31, 2000 and 1999, the following forward exchange contracts were outstanding:Millions of Yen

1999

2000

Purchased forward exchange contracts
denominated in U.S. dollars

Notional
AmountMarketValue

Unrealized
Gain

Notional
AmountMarketValue

Unrealized
Loss¥131,955¥135,127¥3,172¥50,610¥48,240¥(2,370)

Thousands of U.S. Dollars

2000

Purchased forward exchange contracts
denominated in U.S. dollars

Notional
AmountMarketValue

Unrealized
Gain$1,237,273$1,267,011$29,738

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NOTES TO FINANCIAL STATEMENTS

As of August 31, 2000 and 1999, the following interest rate swap contracts were outstanding:Millions of Yen

1999

2000
Notional
AmountInterest rate swap contracts:
Floating rate to fixed rate
Fixed rate to floating rate

MarketValue

Unrealized
Gain (Losses)

Notional
AmountMarketValue

Unrealized
Gain (Losses)¥ 3,000

¥ 59

¥ 59

¥ 4,000

¥ 68

¥ 68

¥ 3,000

¥ (2)

¥ (2)

¥ 4,000¥ (13)¥ (13)

Thousands of U.S. Dollars

2000
Notional
AmountInterest rate swap contracts:
Floating rate to fixed rate
Fixed rate to floating rate

MarketValue

UnrealizedGain$ 28,129

$ 558

$ 558

$ 28,129$ (17)$ (17)

1 4 . SU B SEQU EN T EVEN TS

On June 19, 2000, the Board of Directors authorized a two-for-one split of its common stock to shareholders recordedon August 31, 2000, effective October 20, 2000. This will result in the issuance of 26,518,414 additional shares.
At a shareholders meeting held on November 28, 2000, it was approved that the Company may purchase anadditional 88,500 shares of the Company s common stock within the period from November 28, 2000, to the closing of
the next ordinary shareholders meeting, with an upper limit to an aggregate purchase cost of ·4,000 million ($37,506
thousand) for stock option.

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Independent Auditors’ Report

The Board of Directors and Shareholders
FAST RETAILING CO., LTD.
We have audited the balance sheets of FAST RETAILING CO., LTD., as of August 31, 2000 and 1999,
and the related statements of income and shareholders equity for each of the three years in the period
ended August 31, 2000, and the statement of cash flows for the year ended August 31, 2000, all expressedin Japanese yen. These financial statements are the responsibility of the Company s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, procedures andpractices in Japan and, accordingly, our audit included such tests of the accounting records and such otherauditing procedures as we considered necessary in the circumstances. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of
FAST RETAILING CO., LTD., as of August 31, 2000 and 1999, and of the results of its operations foreach of the three years in the period ended August 31, 2000, and the cash flows for the year ended August
31, 2000, in accordance with accounting principles generally accepted in Japan applied on a consistentbasis.
The accompanying financial statements as of and for the year ended August 31, 2000, have beentranslated into United States dollars solely for the convenience of the reader. We have recomputed thetranslation and, in our opinion, the financial statements expressed in yen have been translated into UnitedStates dollars on the basis set forth in Note 2 to the financial statements.

Century Ota Showa & Co
Tokyo, Japan
November 28, 2000

See Note 1 to the financial statements, which explains the basis of preparing the financial statements of FAST RETAILING CO., LTD.,
under Japanese accounting principles and practices.

33
21

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Store Network
M
M
U

9

M
O
·
J
T
o
c

Hokkaido
Direct-run stores: 421
Franchise stores: 12
Total: 433

J
P(As of August 31, 2000)

22

70

F
O
S
d
S
C
a

Tohoku

S
T
R
b

Kanto

43

M
T
p
n
P

Chubu
Kansai143

Chugoku/Shikoku

ATs

KyushuJ
TE

87
Okinawa

F
F
N
C
i
p
N
T
C
c

55

4

M
T
s
A
T
T
34

UNIQLO 00

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Corporate History
March 1949
Men s Shop Ogori Shoji founded as a private enterprise in
Ube City, Yamaguchi Prefecture.

November 1997
The Company s sales network grew to 309 direct-run
stores and 11 franchise stores.

May 1963
Ogori Shoji Co., Ltd., established, with capital of·6 million, as a successor to the original business.

February 1998
Head Office newly constructed in Yamaguchi City,
Yamaguchi Prefecture, to further enhance central management functions and operational efficiency.
To strengthen in-house merchandise development, theOsaka Office and Tokyo Office were closed and integrated
into a single office set up in Shibuya.

June 1984
The first UNIQLO store, specializing in casual clothing,
opened in Hiroshima City (UNIQLO Fukuromachi store;
closed in August 1991).

November 1998
The first downtown store opened in the fashionable
Harajuku district of Tokyo.

July 1988
Point of sale (POS) systems installed at all stores.
February 1989
Osaka Merchandising and Design Office established in
Suita City, Osaka Prefecture to facilitate in-housedevelopment of clothing.

February 1999
The Company s stock listed on the First Section of theTokyo Stock Exchange.
April 1999
Shanghai Office established to further enhance production
management operations.

September 1990
Computer system introduced to manage and process sales
and product information.

September 1999
Guangzhou Office established.

September 1991
The Company s name changed from Ogori Shoji to FASTRETAILING, a name which succinctly expresses its
business philosophy.

September 1999
Trial-run of catalog sales conducted to explore thedevelopment of new sales avenues.

March 1994
To maximize efficiency, central management functions,previously dispersed, were transferred to the Company s
newly constructed Head Office in Ube City, Yamaguchi
Prefecture.

January 2000
Decision made to team up with Simree Co., Ltd., toshorten the implementation period of full-fledged catalog
sales. (Collaboration took effect from June 2000.)

April 1994
The Company s sales network grew to 109 direct-run
stores and seven franchise stores.

April 2000
The Company s sales network increased to 417 direct-run
stores and 12 franchise stores.

July 1994
The Company s stock listed on the Hiroshima Stock
Exchange (the Exchange was abolished in 2000).

April 2000
To promote merchandising and marketing and to carry out
operations more efficiently, new Tokyo Office establishedin the West Wing of Mark City, a shopping and officecomplex in Shibuya, integrating merchandising functions
from the Yamaguchi prefecture Head Office and the Tokyo
Design Office.

February 1996
FAST RETAILING entered into a joint venture with
Nichimen Corp., and local capital in Shandong Province,
China. FAST RETAILING took a 28.75% equity interestin the venture, with the aim of securing a reliable supply of
products.

June 2000
Established FAST RETAILING (U.K.) LTD, as the firststep in overseas development of the UNIQLO brand.

November 1996
Tokyo Office opened in Shibuya, Tokyo, to reinforce theCompany s in-house product planning and development
capabilities.

June 2000
Prepared to set up shops in train stations, through a tie-up
with East Japan Railway Co. and its related KIOSK stores,
to improve accessibility and heighten customer recognitionof the UNIQLO name.

March 1996
The Company s sales network grew to 205 direct-run
stores and 10 franchise stores.
April 1997
The Company s stock listed on the Second Section of theTokyo Stock Exchange.
35

UNIQLO 00

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Investor Information
Stock Information (As of August 31, 2000)

C

Number of shares authorized: 80,000,000
Number of shares issued and outstanding: 26,518,414
Number of shareholders: 6,523

N
H
E
P
L

Principal Shareholders

Number ofsharesPercentage of
total shares in issue

Tadashi Yanai
Kazumi Yanai
Koji Yanai
The Sumitomo Trust & Banking Co., Ltd. (Trust Account)
The Mitsubishi Trust & Banking Corp. (Trust Account)
Teruyo Yanai
The Toyo Trust & Banking Co., Ltd. (Trust Account)
The Dai-ichi Mutual Life Insurance Co. (Special Account)
The Chase Manhattan Bank, N.A. London
Japan Securities Finance Co., Ltd.

7,074,321
2,382,952
2,097,650
979,100
896,800
581,962
519,500
429,400
299,400
293,500

26.68
8.99
7.91
3.69
3.38
2.19
1.96
1.62
1.13
1.11

R
S
A
T
N

B

Shareholder Breakdown(a)(b)(a) Securities companies(b) Companies and corporations(c) Foreign investors(d) Other financial institutions(e) Individuals and others
Total

(c)
(e)

(d)

Stock Price (Yen)

Number ofshareholders

Number of shares(in thousands)

Percentage of
total shares in issue

22
178
319
152
5,852
6,523

73
237
4,900
7,823
13,483
26,518

0.28
0.90
18.48
29.50
50.84
100.00

Trading Volume Shares (In thousands)

26,342

FT
B

56,00050,5004,873

49,50045,50043,50044,50042,10040,70040,20041,050 40,800
38,0503,326

38,00033,60034,80029,9002,658

32,00031,000

2,944

2,865

33,950

*
2,968

2,547
2,062

2,054

25,81025,20023,1901,714

17,00016,0001999.9 10

1,611*
19,10019,89011

12 2000.1 2

3

4

5

6

7

8

1999.9 10*Stock price after the stock split

11

12 2000.1 2

3

4

5

6

7

*Including trading volume after the stock split

36

T
T
Y
N
M
G
S
T
K
T
S

8

UNIQLO 00

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Corporate Data
Corporate Information (As of August 31, 2000)
Name: FAST RETAILING CO., LTD.
Head Office: 717-1 Oaza Sayama, Yamaguchi City, Yamaguchi 754-0894, Japan
Established: May 1, 1963
Paid-in capital: ·3,274 million
Line of business: Retail chain operator specializing in in-house designed casual clothing
for men and women of all ages. Operates stores under the name of UNIQLO.
Regular employees: 1,265
Settlement date: August 31
Annual shareholders meeting: Around end of November
Transfer agent: The Mitsubishi Trust & Banking Corp.,
2-11-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8212, Japan
Number of shares per trading unit: 100

Board of Directors and Auditors (As of November 28, 2000)
Tadashi Yanai, President & Chief Executive Officer
Takashi Sawada, Executive Vice President & Chief Operating Officer
Yuji Horibata, Senior Managing Director
Nobuo Domae, Managing Director & Chief Information Officer
Masatoshi Morita, Managing Director & Chief Financial Officer
Genichi Tamatsuka, Managing Director
Shuichi Nakajima, Director
Toshiharu Ura, Standing Corporate Auditor
Kiyomi Iwamura, Standing Corporate Auditor
Takaharu Yasumoto, Corporate Auditor
Soroku Matsumoto, Corporate Auditor
From left to right
Top: Takashi Sawada, Shuichi Nakajima, Genichi Tamatsuka, Masatoshi Morita
Bottom: Nobuo Domae, Tadashi Yanai, Yuji Horibata

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FAST RETAILING CO., LTD.
Head Office: 717-1 Oaza Sayama, Yamaguchi City, Yamaguchi 754-0894, JapanTokyo Office: Shibuya Mark City West,13th floor, 12-1, Dogenzaka 1-chome,
Shibuya-ku, Tokyo 150-0043, Japan
FAST RETAILING (U.K.) LTD: 3rd floor, 24 Britton Street, London EC1M 5UA, U.K. (Effective Feb. 1, 2001)
Corporate Information: http://www.uniqlo.co.jp
Internet Sales: http://www.uniqlo.com