Rising sales at Fast Retailing, operator of Japan's largest clothing chain Uniqlo, were unable to offset a fall in full-year profit as the company struggled to stem losses in its overseas subsidiaries and new g.u. and Onezone formats.

Net income for the group, which also operates the Cabin Co chain, fell 21.4% year-on-year to JPY31.7bn (US$269.6m).

Overall net sales for the year to 31 August rose 17.0% to JPY525.2bn, while operating income fell 7.7% to JPY64.9bn.

The company's mainstay domestic Uniqlo casual clothing operation - which accounts for around 81% of total sales - saw revenues rise 7.9% in the year, with same-store sales up 1.4%.

Overseas Uniqlo sales nearly doubled in the year to JPY16.9bn, with strong sales at its Asian operations in China, Hong Kong and South Korea. The US and UK, however, still ran at a loss the company said.

The domestic apparel-related companies - women's fashion retailer Cabin Co, the low-cost g.u. brand clothing, and footwear retailer Onezone - all posted a loss for the year. In particular, g.u. failed to increase customer footfall into its 50 stores.

French casual brand Comptoir Des Cotonniers and lingerie label Princesse Tam.Tam posted net sales of JPY36.7bn and an operating profit of JPY7.2bn.

For the fiscal year to August 2008, Fast Retailing estimates net sales will rise 8.5% to JPY570.0bn and operating income will increase 12.1% to JPY72.8bn, helped by Uniqlo sales up 5.5% to JPY448.0bn.

The company sees large-format domestic Uniqlo stores, and faster international growth, as key growth drivers.

Chief executive Tadashi Yanai has also said the company plans to invest up to JPY400bn ($3.5bn) on buying US and European brands in a bid to double its annual sales to JPY1 trillion by 2010.

In August, Fast Retailing lost a bidding war for upscale retailer Barneys New York after its $950m cash offer was rejected in favour of one from Dubai-based private equity firm Istithmar.