Uniqlo on quest for unique identity, global dominance
TOKYO — Japanese clothing chain Uniqlo has leveraged its prowess in
mass production to build a fashion empire filled with shelves upon
shelves of affordable, good quality items like down jackets, underwear
and T-shirts.
Now the 17-nation, 1,734-store retailer is on a quest to beat Western
giants like Gap, H&M and Zara to become the world’s biggest apparel
maker.
In the overcrowded, highly competitive casual fashion market, size is
important but no guarantee of success. Analysts say Uniqlo’s challenge
is to carve out a brand identity of its own, going beyond its formula of
delivering no-nonsense quality at good prices.
“To win over consumers and break through the clutter, Uniqlo needs to
get even more personal,” said Stuart Green, chief executive of Asia
Pacific at Interbrand, which consults and ranks brands.
“It will be critical for Uniqlo to maintain product quality and, most
importantly, create a deeper, more emotional connection with its
customers to drive brand loyalty,” he said.
Interbrand ranks Uniqlo as Japan’s most valuable retail brand, and
eighth among Japan’s global brands, including Toyota, Sony and Nintendo.
The company’s founder and chief, Tadashi Yanai, is Japan’s richest man,
according to Forbes magazine.
Analysts say that to move it its next stage of growth, Uniqlo also
needs to beef up its digital presence and adapt to non-Asian markets.
Winning over the huge market of suburban American shoppers will be
crucial.
Consumers these days are picking brands on digital platforms and
social networks, as they increasingly shop online. To cope with the
mind-boggling volumes of information online, consumers now rely on
brands to serve as filters and curators, Green said.
To help drive its global expansion, Uniqlo is tapping outside talent.
It just hired Christophe Lemaire, formerly of Hermes and Lacoste, who
started his own Uniqlo line last year, to head its Paris research
center.
In 2014, it brought in a global branding expert, John Jay. An
American of Chinese origin, he who worked on ad campaigns for Nike,
Coca-Cola and Microsoft, and a fleece campaign for Uniqlo, at U.S.
marketing company Wieden+Kennedy.
“Whether they’re in Beijing or New York, there is a commonality to
young people and what they want in life,” said Jay, whose title is
president of Global Creative at Uniqlo’s parent company Fast Retailing,
at a recent Tokyo event, centered on Uniqlo’s second fashion show ever.
“We have barely scratched the surface. Our potential is amazing,” he said.
Uniqlo is still relatively small, with 44 stores in the U.S., 449
stores in China and 846 in Japan, its biggest market. Retail giant
H&M of Sweden has 4,000 stores around the world, Gap Inc. of the
U.S., 3,700 stores, and Inditex of Spain operates 7,000 Zara, Bershka
and other brand stores.
The retailer plans to open its first location in Colorado — and just
its second U.S. store not on the East or West coasts — this fall in the
Denver Pavilions on the 16th Street Mall.
H&M and Inditex have posted healthy financial results recently,
but Gap, which has the Old Navy and Banana Republic brands, is
struggling, slashing prices to draw buyers and closing dozens of stores,
including some in Japan. The Standard & Poor’s credit rating agency
recently downgraded Gap’s debt to junk status.
Uniqlo’s profits also have slowed recently, hurt by a warm winter
that slowed sales of its down jackets, HeatTech underwear and other
winter apparel.
Fast Retailing, with 100,000 employees, forecasts a profit of $560
million for the fiscal year through August, down 46 percent from the
previous fiscal year, mainly because of falling profits at Uniqlo.
In this June 9, 2016 photo, a shopper looks at items at Uniqlo’s flagship store in Tokyo’s Ginza shopping district.
Shizuo Kambayashi
Yanai’s turnaround plan includes sweeping cost cuts, improved
efficiency, pricing reviews, and, perhaps most importantly, greater
flair in the company’s fashion offerings, building on collaborations
with designers.
The company asked Nigo, a Japanese DJ with a reputation for
innovation who created The Bathing Ape clothing line, to add more flair
and edge to his T-shirts.
Nigo added to the T-shirt line motifs from pop artist Andy Warhol,
music producer and singer Pharrell Williams and from traditional Kabuki
theater, in addition to old-time favorites like Mickey Mouse.
A partnership with Carine Roitfield, former editor-in-chief of Vogue
Paris, has brought into Uniqlo stores chic designs unlike most anything
else you’d find.
The company has strengthened its sportswear, signing on tennis stars Kei Nishikori and Novak Djokovic.
Uniqlo also has partnerships with labels like Liberty London, with
its colorful flower-pattern fabrics, and Hana Tajima, a designer who
specializes in Muslim clothing such as head scarves and long dresses.
“Uniqlo has a smart format, which stands out from most of the mass
fashion retailers. Less concerned on fashion trends, and more focused on
‘basics’ or ‘investment pieces’ of good fabric and quality,” said Luca
Solca, analyst with BNP Paribas. “They are trying to spice this up with
designer collaborations.”
Uniqlo executives think fashion is globalizing, and people around the
world, from China to New York, more or less want the same thing —
quality for reasonable prices, and clothes that suit their lives.
On a recent weekday, the company’s 12-story Ginza store was crowded,
as tourists milled around in front snapping selfies in front of what has
become a city landmark.
Olga Symonenko, an IT worker from the Ukraine, said she had heard about Uniqlo from friends who had been to a store in the U.S.
“The prices are good, and the quality,” she said, happily clutching
two blue dresses. She said she and her husband planned to pick up 20
items.
The Denver Post contributed to this report.
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Models hold MCM bags during a renewal event at the flagship store in Seoul on April 21, 2016. (Yonhap)
Kim Sung-joo, CEO of the South Korean fashion retailer Sungjoo Corp., speaks during a Seoul forum on April 20, 2016. (Yonhap)
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