While Inditex of Spain, which owns Zara, and H&M of Sweden, the world’s two largest clothing retailers, slavishly follow fashion trend, UNIQLO, the main brand of the third-largest fast retailing of Japan, sticks to timeless basics.
UNIQLO’ overseas market share has rapidly grown, owing to its international expansion and improved logistics. Last year UNIQLO’s international revenues overtook its domestic sales for the first time and its foreign operating profit almost equalled its Japanese equivalent.
China, home to over half its overseas shops, provides a strong Asian foothold for UNIQLO. However, the rest of Asia may be harder to crack. For one thing, a warm climate in several countries means that U cannot rely on its cold-weather products as a main driver of sales. It may have to tweak its formula, which could be rather risky.
As for the western market, Growth in the heartlands remains elusive both in America and Europe. In part that is because the same business model exists there already with firms such as Gap.
Mr Yanai, an ardent fan of globalization is confident that he can guide U through the hazards and changes. He also talks of expanding into shoes as well as dresses and skirts, where U currently has only slim offerings.
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