Japan’s Fast Retailing is in talks to purchase J. Crew for as much as $US5 billion, according to the Wall Street Journal.
Fast Retailing is the parent company of Uniqlo, which has exploded in the past decade, becoming Asia’s biggest clothing retailer. And its leaders have ambitious goals to make the brand the leader in retail worldwide.
Uniqlo, which focuses on 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?
Additional reporting by Megan Durisin.
The company is a division of Japanese retail holding company Fast Retailing, with Tadashi Yanai at the helm. In addition to Uniqlo, Fast Retailing owns brands including J Brand, Theory, and Comptoir Des Cotonniers and National Standard.
The company originally called itself 'Unique Clothing Warehouse.' By joining those words together, Uniqlo was born.
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.
Although Uniqlo started as a suburban chain, it now has more than 1,360 stores worldwide, many in urban centres around the globe.
Uniqlo has 856 stores in Japan and more than 500 stores overseas in the U.S., France, Singapore, Malaysia, the Philippines, Thailand, China and Taiwan, among other countries.
Prime locations include major shopping streets in New York, London, and Paris.
Uniqlo has become the biggest apparel chain in Asia. But company executives have said they want Uniqlo to be 'the world's No. 1 casual brand.'
So far, there are only 17 stores in the U.S. But there are plans to open 100 more stores in the U.S. over the next couple years, according to Reuters.
The SoHo store was the first to open in 2006.
Uniqlo's slogan is 'made for all,' and the store is known for its rainbow-coloured casual wear for men, women and kids.
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 the second richest man in Japan. His net worth is estimated at $US17.9 billion.
He is said to have intensely studied Gap and used the American company as a basis for its business model.
And the company wants to grow receipts to reach 5 trillion yen ($49 billion) by 2020, with a fifth coming from the U.S., according to Chief Financial Officer Takeshi Okazaki.
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.
In March of last year, Yanai told Women's Wear Daily that he 'might not be able to retire' because there is no one who yet meets his expectations as a successor.
The store was virtually untouched during the recession and saw profits climb 17% between 2009 and 2010.
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.
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