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Is Uniqlo At The Beginning of Something Big in The U.S.?
Japanese fast-fashion retailer Uniqlo wants to become a more familiar fixture throughout the U.S.
Uniqlo’s parent company Fast Retailing is expanding its North American store count by 10 percent as part of a plan to reach 200 stores on the continent by 2027, Reuters reported. The chain intends to open 20 to 30 new stores per year in the service of that goal. Its expansion plans for this summer include opening six U.S. locations in California, Maryland and New Jersey, where Uniqlo has already established a footprint and two locations in entirely new markets in Canada. Uniqlo’s current U.S. store count is 47 stores and its current Canadian store count is 16.
Moving forward with plans for more Uniqlo stores in the U.S. and Canada is not the only recent move that Fast Retailing has made to increase its North American presence.
The company last year announced the opening of a GU store in New York’s Soho neighborhood. GU is Fast Retailing’s more trend-focused, youth-targeted brand. It represents GU’s first appearance outside of Asia. It is one of Fast Retailing’s few attempts to launch it outside of Japan (a handful of GU stores opened in South Korea and were closed during the novel coronavirus pandemic).
Reuters reported late last year that Uniqlo emerged as a standout among apparel retailers in an otherwise suffering vertical during the pandemic. Fast Retailing said then that Uniqlo was on its way to showing a profit in the U.S. for the first time in its 17 years of doing business in the country. It attributed the results to a logistics revamp and a new pricing strategy that ended discounting.
Uniqlo is not the only international fast-fashion brand whose slow, deliberate stateside expansion is picking up speed.
This year Irish fast-fashion retailer Primark has continued with plans to open more stores in the U.S., some in entirely new markets, aiming for a store count of 60 by 2027, Business Insider reported. Primark currently has 17 stores in the U.S., and the next phase of its expansion will consist of establishing “a significant presence” in southern states.
Discussion Questions
DISCUSSION QUESTIONS: What will Uniqlo have to do to become a significant player in U.S. apparel? What should competitors look out for from the brand as it expands its footprint?
Poll
Loading …BrainTrust
Bob Amster
Principal, Retail Technology Group
Jeff Sward
Founding Partner, Merchandising Metrics
The first thing about which domestic retailers have be concerned is the methodical, patient approach of Uniqlo and its parent company. Uniqlo has to continue to differentiate itself from the domestic competitors in price (it can do that), merchandising (it already does that) and in-store experience (it does that too). Watch Uniqlo go…
Durable fast-fashion is an oxymoron, but Uniqlo has found a way to make it work. Yes, 17 years is a long ramp-up to profitability, but entering the U.S. market is never easy. Same thing for Canada. I think that getting the logistics right was possibly even more important for Uniqlo’s bottom line than eliminating discounts. They are a leader in RFID technology and have truly embraced the model. They understand their inventory to the last item. They have fast check out, security, inventory accuracy, can find product on the floor, ease of markdowns, fast and accurate receiving, and low prices. What more could a customer or an associate want or need? For a successful expansion, they just need to stick to their strengths–their products, brand, and tech.
Uniqlo is a great retailer. It has good quality products at excellent price points. And most of what it sells appeals to a fairly wide audience because of the mix of apparel staples and more fashionable products. The issue for Uniqlo – and indeed for Primark – is that the brands are niche in the U.S. because they have a limited number of stores. As both ramp up openings they should see strong growth and that will come at the expense of existing players. However becoming a dominant force will take time for both players: the U.S. is enormous and not easily conquered.
I’ve always viewed Uniqlo as a direct head-to-head competitor with Gap. And Gap’s descent into bland and ordinary over the years has left a gaping void for Uniqlo to fill. Both brands offer very straightforward everyday apparel, but if Uniqlo is saying they can do it with less discounting while Gap becomes more and more promotional, that’s a pretty big statement. Uniqlo has always been clever about how they inject novelty product into their assortments. Gap didn’t even try for a while. Ye was a disastrous plunge into the deep end of the pool in that direction. Barbie is a tamer version of the same thinking. To paraphrase: Gap’s malaise is Uniqlo’s opportunity. And I think Gap knows that. And Primark’s role in value-priced everyday wear should not be minimized. More Primark stores means more headaches for everybody.
Jeff, I like this assessment. I like Uniqlo a lot — I wear a lot of their polo shirts. I love their clean line of sight presentation and their pricing. Gap, for years (as we have discussed here), has been trying to find its identity. I think Uniqlo has a plan and I think they have an ability to innovate to keep on top of trends that fits their value proposition.
This is easy — just open more stores! I have toured the Tokyo flagship store and shopped the store in San Francisco, and based on those two experiences I believe Uniqlo will become a force here in the states. Add in some more U.S.-specific promotion strategies (I LOVED seeing the Australian Golfer Adam Scott wearing Uniqlo when he played in this years Masters, for example) and they will win here in a big way.
I’ve always thought that Uniqlo was just a better Gap. So if there’s any appetite left for the look that Gap exploded on America, to me, it’ll be Uniqlo that’ll revives it. Gap can’t seem to figure out how to be themselves anymore so, I certainly wouldn’t count on them to re-create demand any time soon.
Profitable for the first time in 17 years in the U.S.? Ah, the patience of a typical Asian company. Fast Retailing’s corporate objective is to become the world’s #1 apparel retailer. With about 2,500 stores worldwide, they are targeting another 1,000 in the next few years.
Uniqlo has over 900 stores in China, and any mall I have visited has at least one of the Fast Retailing banners. They are known for quality products at the lowest prices. That strategy will test TJX, H&M, and even Zara. The biggest challenge these retailers will face is matching the Uniqlo quality.
Uniqlo have a reputation for well priced well made merchandise. For many consumers this had winning appeal. In a similar way to Primark, their most versatile stores tend to be large in format.
Being known for something specific – and offering it at a keen price is always going to go down well with customers. Competitors need to decide how to compete – sustainability could be an angle as could service – for example combining online in store with such things as endless aisle.