Japanese fashion group Fast Retailing has posted a 27.9% increase in third quarter profit, driven by higher sales at its Uniqlo casual clothing chain.

Net income rose to JPY11.4bn (US$106.2m), with sales at Uniqlo rising 4.2% the company said, helped by sales promotions.

Fast Retailing's Uniqlo Japan operation accounts for roughly 80% of the group's net sales.

Uniqlo operations in China, Hong Kong and South Korea continued to expand during the quarter, and the performance of its New York global flagship store was described as "favourable".

Fast Retailing's other Japan Apparel segment posted a small profit in the March to May period, through improved profitability at women's fashion retailer Cabin and footwear retailer Onezone subsidiaries, a statement said.

However, Fast Retailing's profits from its Global Brands segment were flat in the third quarter due to a deterioration in European consumption.

The company's forecasts for the full-year to August 2008 remain unchanged, with overall net sales to rise 11.5% year on year to JPY585.5bln and operating income to rise 23.4% to JPY80.1bln.

Fast Retailing also announced today (10 July) a merger between three of its Japan Apparel subsidiaries - casual wear brand developer GU and footwear retailers Onezone and Viewcompany - from effective 1 September.

"The newly merged company will strive to create a new style of shoe business within the footwear industry, and the cheapest quality clothes in the low-cost clothing market," Fast Retailing said.

It is expecting to account a special loss of JPY1.8bn in the year to 31 August in relation to the merger.