Japanese clothing chain Uniqlo has become the envy of retailers worldwide.
The company has exploded in the past decade, becoming Asia’s biggest clothing retailer. And Uniqlo’s leaders have ambitious goals to make the brand the leader in retail worldwide, according to The Wall Street Journal.
Uniqlo, which focuses mass-producing affordable basics in dozens of colours, got its start in the Japanese suburbs. Less than 20 years later, it’s laid its stake along swanky shopping streets in major global cities.
What’s the story behind the company’s success?
The company is a division of Japanese retail holding company Fast Retailing, with Tadashi Yanai at the helm.
In the early 1990s, the Japanese economy hit a major slump. And Uniqlo's cheap clothes got popular fast.
The Japanese economic downturn is often called 'The Great Recession' and lasted for an entire decade. It was bad news for the country as a whole, but Uniqlo reaped major benefits by catering to citizens who were trying to cut back on spending.
Most of the original growth was centered in the Japanese suburbs with roadside stores.
The company saw a rise in popularity after the launch of a fleece apparel campaign in 1998, according to its website.
Uniqlo's faced some bumps along the way. When first expanding overseas, it opened too many stores too quickly — and had to close many of them.
The company opened 21 stores in the United Kingdom by 2002, but only eight remained open in 2006. Fast Retailing executives said they didn't do a good job of establishing a 'brand identity' before setting up shop and were learning from their mistake.
Although Uniqlo started as a suburban chain, it now has more than 800 stores worldwide, many in urban centres around the globe.
Most of Uniqlo's stores are in Japan, but it also has locations in the U.S., France, Singapore, Malaysia, the Philippines, China and Taiwan, among other countries.
Prime locations include major shopping streets in New York, London and Paris.
So far, there are only seven stores in the U.S. But there plans to open 1,000 Uniqlos in America, according to Forbes.
So far, there are four locations in New York, two in New Jersey and one in San Francisco. The SoHo store was the first to open in 2006.
It also keeps prices low by buying products directly from suppliers. And it can buy in mass since it focuses on clothing that doesn't go out of style and pumps each item out in an array of colours.
Yanai, Uniqlo's founder, is one of the richest people in Japan. His net worth is estimated at $15.5 billion.
He is said to have intensely studied Gap and used the American company as a basis for its business model.
Some features of Uniqlo's business stand out among other retailers. For example, Yanai has proposed a global pay system in which managers worldwide would receive the same wage.
And Yanai told Forbes that Uniqlo sets itself apart by not chasing trends. Instead, they focus on basics, like Oxfords and polos, and make them affordable.
Blouses, slim-fitting bottoms and lightweight outerwear also are Uniqlo staples.
The store was virtually untouched during the recession and saw profits climb 17% between 2009 and 2010.
And it hasn't stopped yet. Profits jumped 13% in the past six months, according to the Wall Street Journal, and its overseas sales continue to come in strong.
If Uniqlo's rapid growth continues, its ambitious plans to be the leader of retail in the U.S. and worldwide could become a reality.
'If it wins decisively in Asia, the world's growth driver, it is not inconceivable that it could become No. 1 without a big acquisition and without becoming No. 1 in the U.S.,' an analyst told the Wall Street Journal.
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