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Fast Retailing Assures Manufacturers Amid Supply Chain ‘Overhaul’

Fashion brands are stepping up their promises and commitments amid a growing focus on sustainable climate action and environmental stewardship.

In response, Asian manufacturers are keeping a close eye on global retailers and brands tweaking their blueprints, and waiting to see what exactly this means for them.

When Yukihiro Nitta, group executive officer for Fast Retailing Co. Ltd., spoke about Promise Number one, as the company revealed its fiscal 2030 Sustainability Targets and Action Plan earlier this month, he laid out a goal to “completely overhaul the supply chain to overhaul the value of Life Wear.”

Goals such as these often require a new playbook, and manufacturers fear that orders will shift, sometimes from one country to another, as buyers chase lower costs or lower regulatory scrutiny.

Uniqlo’s parent company, however, appears firm in its commitment to improving its current sourcing matrix.

“Our relationships with partner factories are important to us and currently we have no plans to change sourcing locations. We have five production offices, which are located in Bengaluru (India), Dhaka (Bangladesh), Ho Chi Minh City (Vietnam), Jakarta (Indonesia) and Shanghai (China). These will not change, and from these offices we will continue working to expand and raise the quality of manufacturing,“ a Fast Retailing spokesperson told Sourcing Journal.

Both manufacturers and consumers are watching the promises made by Fast Retailing, the world’s third-largest apparel retailer, with Uniqlo as its largest brand.

“The first promise, to completely overhaul our supply chain to further increase the value of LifeWear, will involve a further deepening of our transformative Ariake Project that the Fast Retailing Group has been comprehensively pursuing since 2017,” the executive said. “The Ariake Project’s ultimate objective is to only make, deliver and sell the products that people really need. One of the important changes was setting up ‘Voice of Customers’ and ‘Voice of Stores,’ direct lines of contact to collect information in real time about how the customer feels about our products.”

“Solid partnerships cultivated over many years with partner factories is a key strength,” Nitta said earlier this month, adding that the company is repeatedly briefing its partners to align goals.

“We held multiple dialogues with individual factories to make sure we had a clear understanding of each factory’s individual circumstances and issues,” he continued. “Then we got together with the partner factories that account for 90 percent of our production volume to formulate plans for reducing greenhouse gas emissions that include measures on energy saving, coal elimination, and the introduction of renewable energy.”

Nitta said Fast Retailing will check in to make sure “factories are creating and implementing concrete measures under the planned frameworks.”

“We want consumers to feel secure and safe to purchase our brand,” he added.

Fast Retailing has been working to recover since the start of the pandemic and has continued to emphasize its focus on sustainability, and its plan for Lifewear to carry this further is clear—including a list of specific targets such as achieving carbon neutrality by 2050 and using renewable energy for all sources by 2030.

While consumers in the West have been demanding greater traceability in the supply chain, this month’s announcement said Fast Retailing would increase due diligence to make this happen.

Is the issue equally important for Asian consumers?

“Regarding traceability, regardless of where our customers are from, we want to make products that they can buy and wear with peace of mind. We already have established a special team focusing on traceability made up of a group of 100 people. We believe we can achieve our goals to reduce emissions in the supply chain based on our strong relationships with partners. Based on these strong relationships and our shared values we work together to identify the challenges they face and ways we can support them in reaching these goals,” the Fast Retailing spokesperson told Sourcing Journal.

Fast Retailing is carefully working to navigate the different working systems and patterns across disparate sourcing countries, he added.

“One challenge in this regard is that the decarbonization environments in the countries and regions where we have partner factories are not yet developed, so we engage with partners directly to implement changes based on their local circumstances,” the spokesperson said.

As Koji Yanai, director of the board and group senior executive officer at Fast Retailing, said while introducing the action plan, “We felt Lifewear can go beyond sustainability. We want to show Lifewear as a new industry and we want to provide an industrial revolution.”

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