Japanese brands Muji and Uniqlo yesterday became the latest to be embroiled in an escalating controversy over cotton sourced from China’s Xinjiang region.
Ryohin Keikaku Co, the operator of the Muji chain of minimalist furniture and lifestyle stores, saw its shares tumble after it issued a statement saying it was “deeply concerned” about reports of human rights abuses in the area, while several Chinese celebrities abruptly cut ties with Uniqlo, the clothing brand owned by Fast Retailing Co.
The firms join the likes of Hennes & Mauritz AB (H&M) and Nike Inc, which have seen their shares slammed after facing calls to boycott their products from Chinese users online due to their stance on forced labor in the region.
Photo: Reuters
Shares in Ryohin Keikaku, which advertises items using Xinjiang cotton, fell as much as 6.8 percent in Tokyo, the most since July last year. It said it had vetted its supply chain and would continue to monitor compliance with law.
The statement from Ryohin Keikaku “at this stage of the evolving saga puts the company in a similar position as H&M and Nike,” Bloomberg Intelligence analyst Catherine Lim said. “This may subject the company/Muji-brand to criticisms from Internet users in China and result in calls for boycotts.”
Ryohin Keikaku said it sourced cotton from many countries including China, but that it “thoroughly enforced compliance, so as not to be directly or indirectly involved in transactions prohibited by law.”
In the e-mailed statement, the firm said that an independent audit of plants in its supply chain in Xinjiang found that “there is no significant issue identified except for those issues that can be corrected by farms or ginning factories taking actions on their own to make immediate improvements.”
Kyodo News last month reported that the firm was one of 12 major Japanese companies that had decided to cease doing business with Chinese companies using forced labor in Xinjiang.
Shares in Uniqlo operator Fast Retailing also fell in morning trading before recovering. The company was cited among firms that had previously made remarks about Xinjiang cotton in a social media post by the Beijing Youth Daily Thursday.
The newspaper is the official paper of the Beijing Municipal Committee of the Communist Youth League of China, which has led the campaign this week against foreign clothing firms.
Several Chinese celebrities including actress Ni Ni (倪妮) and boy-band star Wang Yuan (王源) announced the same day they were severing ties with the Uniqlo brand.
While Muji has not yet been actively targeted by Chinese consumers, investors are selling on concern that such a movement might grow, said Shoichi Arisawa, an analyst at Iwai Cosmo Securities Co.
He also expressed concern that Ryohin Keikaku’s position on Xinjiang cotton could lead to an impact outside of China.
“If a movement spreads worldwide against products using raw materials produced by Uighur forced labor, concern will increase,” he said.
UNPRECEDENTED PACE: Micron Technology has announced plans to expand manufacturing capabilities with the acquisition of a new chip plant in Miaoli Micron Technology Inc unveiled a newly acquired chip plant in Miaoli County yesterday, as the company expands capacity to meet growing demand for advanced DRAM chips, including high-bandwidth memory chips amid the artificial intelligence boom. The plant in Miaoli County’s Tongluo Township (銅鑼), which Micron acquired from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion, is expected to make a sizeable capacity contribution to the company from fiscal 2028, the company said in a statement. It would be an extended production site of Micron’s large-scale manufacturing hub in Taichung, the company said. As the global semiconductor industry is racing to reach US$1 trillion
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
Memory chip stocks extended their losses yesterday after Alphabet Inc’s Google publicized research that could allow more efficient use of the storage needed for artificial intelligence (AI) development. SK Hynix Inc and Samsung Electronics Co, South Korean leaders in the market, fell more than 6 percent and about 5 percent respectively in Seoul. In the US, Micron Technology Inc, Western Digital Corp and Sandisk Corp slid more than 2 percent in pre-market trading, after they all closed lower on Wednesday. Memory companies have been on a tear in recent months as the rapid development of AI infrastructure triggered a spike in chip
RSS