Fast Retailing and Toray boost business ties-paper
TOKYO, June 17 (Reuters) Japan's top casual wear retail chain, Fast Retailing Co, will form a development and production alliance with fibre maker Toray Industries, boosting business between the two to about 8 million over the next three years, the Nihon Keizai Shimbun reported on Saturday.
Fast Retailing, the operator of Uniqlo clothing stores, had announced last week that it would hold a briefing on Monday about a ''strategic partnership'' with Toray, but neither company would disclose details on the nature of the tie-up.
The Nihon Keizai business daily said that Toray would establish dedicated production lines at its global factories to supply Fast Retailing. The two will also work together at the early stages of product development, the paper said.
Toray, Japan's largest maker of synthetic fibres, already supplies Fast Retailing with fabric and other materials totalling about 10-20 billion yen a year, the Nihon Keizai said. The alliance should boost aggregate transactions to about 100 billion yen (8 million) over the next three years, the paper said.
A Fast Retailing spokesman would not comment on the details of the alliance, but said the Nihon Keizai's numerical projections were based on speculation. He said details would be announced on Monday.
Toray could not be reached for comment.
The alliance will allow Fast Retailing to secure a stable supply of cutting-edge fabrics for its overseas expansion while enabling Toray to invest in research and production from a long-term perspective, the paper said.
Fast Retailing has been boosting its presence in overseas markets and aims to increase its group sales to 700 billion yen in the business year to August 2010, from a projected 445 billion yen in the current financial year to August 2006.
Toray, meanwhile, is hoping a stronger relationship with a big retailer will help it shore up its textiles division, which has been under pressure due to the proliferation of low-cost rivals in China, the Nihon Keizai said.
REUTERS PV RN1932