Tadashi Yanai, the billionaire founder of Uniqlo and the richest person in Japan, has seen his net worth crash by 44% so far this year

• Uniqlo founder Tadashi Yanai has seen his net worth fall by 44% this year.
• Uniqlo's profits have been affected by slowing sales in Japan and China and a weakening yen.

Tadashi Yanai, the billionaire founder of Uniqlo, is the richest person in Japan — but his lead is narrowing.

His net worth currently stands at $23.6 billion, down 44% since the beginning of the year. That's according to Forbes' list of the richest 50 people in Japan, which was published on June 1.

Japan's wealthiest people have seen nearly a third of their collective wealth disappear since last year due to rising energy and commodity prices, as well as supply-chain disruptions.

With a net worth of $21.6 billion, Takemitsu Takizaki, the founder of sensor-maker Keyence, is the second-wealthiest person on Forbes' Japan's 50 Richest list. Coming close behind is SoftBank Group founder and CEO Masayoshi Son, who is worth $21.1 billion. Son, who was the wealthiest person in Japan in 2021, saw his fortune tumble by more than half due to this year's tech stock sell-off.

Yanai was not born into wealth. While Fast Retailing — Uniqlo's parent company — is Yanai's family business, it was not always a multibillion-dollar enterprise. Yanai spent his post-graduation years working in supermarkets, according to The CEO Magazine, and had to do everything himself when he finally joined the family business.

"I needed to clean the store, brush the jackets, (do the) sourcing – I literally had to do everything myself because there was nobody else," he told the Business of Fashion in 2016. "It was a huge learning opportunity."

In 1984, Yanai took over the reins from his father and launched Unique Warehouse Company, the company now known as Uniqlo. By 1998, Uniqlo had an estimated 300 stores across Japan, and sold over 2 million of its signature fleece jacket in just 12 months, per The CEO Magazine.

Tough times for Uniqlo

Uniqlo has seen slumping sales in China and Japan recently. In April, Yanai raised concerns about a profit drop in China thanks to the country's strict lockdown measures, per Reuters.

"We are very much in trouble with China's zero-Covid policy, in terms of profit and the livelihoods of our employees," Yanai told reporters in April, per The Financial Times. "Shanghai has been forced to suspend operations and shipping from the port has become difficult," he added.

With 865 stores, mainland China is Uniqlo's largest market; almost 90 of those are located in Shanghai. The company has 813 stores in Japan.

The lockdown in China, which restricted consumer spending, also impacted Uniqlo's online sales turnover, according to the South China Morning Post. In April, Uniqlo's Alibaba Group Holding's Tmall site was down 33% compared to the previous year.

Aside from dwindling sales in China, Japan's weakening currency also contributed to Uniqlo's decreasing profit, per The FT. On April 28, the Japanese currency reached a 20-year low against the dollar, losing around 11% of its value this year alone.

In January, Uniqlo's chief financial officer, Takeshi Okazaki, told reporters that the weakening yen was driving up the costs of raw commodities and shipping. To keep up with rising costs, the retail brand has hiked some prices, going against the brand's promise of affordability.

"We have reached a point where we have no choice but to raise the prices of some products," Okazaki said. "Our basic policy is to avoid raising prices as much as possible, recognizing that our customers have strict cost expectations."

Uniqlo's parent company Fast Retailing reported in its first-half 2022 fiscal summary that Uniqlo Japan had a 10.2% year-on-year dip in revenue. Fast Retailing published the fiscal summary on April 14 using figures dating from September 2021 to February.

In the report, Fast Retailing consolidated China's performance with the brand's international market performance. However, Fast Retailing said China's profits and revenue contracted significantly during the fiscal period.

Despite slumping sales and increased operating costs, Fast Retailing still recorded 146.8 billion yen ($1.21 billion) in profit. The company attributed significant revenue and profit gains to international operations in South Asia, Southeast Asia & Oceania, North America, and Europe.