Fast Retailing shares climbed 0.9 per cent in Tokyo trading on Wednesday.
Japan has faced scrutiny over its lack of gender diversity in top management roles; only 4.1 per cent of executive titles at publicly traded firms in the country are held by women. That pales in comparison with places such as the US, where women make up about a quarter of executive ranks, according to multiple studies.
“It’s a possibility,” Yanai said when asked whether Akaida would be a potential successor. Akaida, 40, joined the company in 2001 and has managed Uniqlo stores in China and Japan, as well as working in the sales and human resources divisions.
Any successor to Yanai would inherit one of Japan’s more recognisable global brands, after Fast Retailing fought off domestic doldrums by expanding Uniqlo overseas. Revenue has grown consistently, surpassing 2 trillion yen ($28 billion) in 2018, mainly through new stores in foreign markets from China to the US.
Prime Minister Shinzo Abe has sought to promote women in the work force amid a labour shortage triggered by Japan’s aging and shrinking population. With a declining birthrate, the number of people will slump by almost a third by 2060, by which time about 40 per cent will be 65 or over, according to the National Institute of Population and Social Security Research.
“We’re in the business of selling clothes – it’s not so good that we’re old,” Yanai said.
Investors are looking at gender diversity in management ranks to evaluate their holdings. That’s especially true for consumer companies where it may be important to have executives who are similar to and match the core customer profile, said Kathlyn Collins, analyst at Matthews Asia, a San Francisco-based fund with about $US30 billion ($44.2 billion) under management.
“We would hope that there would be enough people who are overseeing management who have some sort of experience with that demographic, who maybe are familiar with the needs, wants, desires of that customer,” Collins said.
The Southeast Asian region will become an increasingly important part of Fast Retailing’s business, Yanai added. The company said it would invest $US1.8 million in a partnership with the International Labour Organization, an arm of the United Nations, to help support factory workers in Indonesia. The ILO will also conduct a study in other countries where Fast Retailing has contract factories to explore ways to improve social protections for workers in the future.
Yanai said such investments are a way to both help pursue business goals and contribute to the world, as upward mobility in developing countries would likely eventually boost Fast Retailing’s top line.
“If we expand in a place where incomes are not growing, we cannot sell clothes,” the CEO said.