Fast Retailing's Uniqlo in Setagaya Chitosedai

TOKYO, Oct 8 (Reuters) - Japan's Fast Retailing (9983.T), which wants to be the world's No. 1 clothing retailer within 10 years, said on Friday its profit will slip this business year for the first time in four years as global competition tightens and weak consumer spending hurts income at home.

The operator of the Uniqlo discount clothing chain expects operating profit to slump 14.3 percent to 113.5 billion yen ($1.38 billion) in the year ending Aug. 3, 2011.

That would fall short of the average estimate of 136.4 billion yen in a poll of 21 analysts by Thomson Reuters I/B/E/S.

Competition with other global retailers is intensifying while a persistent slump in consumer spending in Japan is eroding profitability, the company said in a release.

Higher costs and a delay in launching its autumn collection will further crimp profits, the company said.

A squeeze on profits may leave Japan's leading discount apparel seller with less spare cash to fund its expansion overseas as it takes on bigger rivals such as Gap Inc (GPS.N) of the U.S., Spain's Inditex (ITX.MC), which operates Zara outlets, and Swedish fashion giant Hennes & Mauritz (HMb.ST).