TOKYO – [06.08.06] Fast Retailing Co., which controls the Uniqlo chain of apparel stores, wants to buy a stake in Giordano International Ltd to improve its distribution across Asia including outlets in China, Hong Kong and Taiwan.

The approach was confirmed by a statement to the Hong Kong Stock Exchange on Friday, which read the approach “may or may not lead to any offer for [Giordano] shares.”

Giordano chairman Peter Lau Kwok-kuen added, “No offer has been made and no firm intention to make an offer has been indicated by the potential investor.”

Harris Associates LP which holds 14.9% of Giordano shares also confirmed that the Japanese-based retail giant has been in touch with private equity firm. “They have been in touch with us,” Chicago-based David Herro, chief investment officer of Harris told Bloomberg news agency.

Giordano shares were suspended from trading Friday amid the speculation, and the company has hired Goldman Sachs as its financial adviser. Fast Retailing‘s has retained the services of HSBC as its adviser.

It’s likely that Fast is looking to take a majority stake in Giordano but because the Hong Kong firm has no major shareholder, it could be difficult to persuade investors to agree to a takeover. UK-based Aberdeen Asset Management is the largest shareholder with 14.73%, followed by US-based Harris Associates with about 14.08%, and Matthews International Capital with 9%.

Originally, Giordano had bold plans for 2005. The Hong Kong-based apparel retailer said it had earmarked HK$200 million for store roll-outs and refurbishments in 2005, but these had to be revised during the fiscal year due to increased competition from local and foreign brands in its biggest markets of China and Taiwan.

The company also scheduled the use of capital for improving brand recognition and differentiation. But even though its turnover in China increased 10.5% to HK$464 million in the first half of 2005, the company acknowledged that competitive pressure had intensified and it has cut back its planned store openings in this market.