Fast Retailing, a Japanese apparel retailer that owns Uniqlo stores, is cutting down its expansion plans in the US, after it failed to meet its earnings target due to increasing losses.

Fast Retailing plans to open only five Uniqlo stores in the US in the current fiscal year. Last year, the company had opened around 15 stores, reported Reuters.

The firm saw losses in the fourth quarter of this fiscal year due to impairment charges of JPY16.1bn ($134m) associated with its Uniqlo stores in the US and other brands such as the J Brand denim label.

During an earnings briefings, the company’s chief financial officer Takeshi Okazaki said: “The brand also still doesn’t have a lot of recognition in the United States.”

For this fiscal year ending August, Fast Retailing saw a 48% increase in net profit to JPY110bn. However, it failed to meet the guidance of JPY120bn announced three months ago. Annual sales had increased by 22% to JPY1.68 trillion due to growing demand in China and South Korea.

Fast Retailing CEO Tadashi Yanai was quoted by The Financial Times as saying: “The brand penetration in big cities such as New York, San Francisco and Chicago — where we will open a new store – is good, but not in the suburbs.
“We need to overhaul our policy for opening new stores.”

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The company plans to move top executives to US in order to revive the US business. Further, it plans to increase its focus on new marketing strategies.

The company had planned to have 100 Uniqlo store openings in the US over the next few years. As the fiscal year came to an end, it