Japanese fast-fashion giant Uniqlo on a mission to conquer the US and replicate the success enjoyed in Asia and Europe
- Uniqlo is popular in Asia and Europe, and a few US cities, but hasn’t managed to really crack the American market as a whole – yet
- Uniqlo’s CEO for US and Canada, Daisuke Tsukagoshi, says there is a large marketing budget and a plan to open 139 more stores in the US in the next four years
The biggest challenge to Japanese fashion giant Uniqlo’s plan to take on the US? Getting more Americans to know who they are.
The apparel maker, known for its affordable cashmere jumpers and solid basics, wants to go big in one of the world’s toughest consumer markets.
Although Uniqlo is a fixture in shopping streets in New York and other coastal cities, parent Fast Retailing is giving its flagship clothing brand a hefty marketing budget to ensure it can reach the same level of awareness in Iowa and Texas as it enjoys in Japan, Asia and parts of Europe.
Differing tastes in clothing, depending on local markets, makes expansion especially tough, according to Daisuke Tsukagoshi, Uniqlo’s chief executive officer for the US and Canada.
“We are starting from people asking what Uniqlo is,” says Tsukagoshi, 44, in an interview at Uniqlo’s warehouse-sized office building on a reclaimed island in the middle of Tokyo Bay. “Marketing is absolutely necessary, and without it there’ll be no growth.”
It’s a formidable task. The clothing company only recently became profitable in North America and has 61 stores there.
Tsukagoshi’s mandate is to more than triple that in four years to 200 stores – an achievement that could put the US ahead of Europe, where it currently operates 112 outlets.
“The goal is quite challenging,” says Tsukagoshi, who speaks with precision about numbers and dates, and says he likes to meet his staff and look them in the eye to gauge their commitment to the mission.
Although it “won’t be easy” to achieve, Tsukagoshi says “reporting a profit was a step forward, helped gain trust in customers and raised morale”.
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Known for its simple but fashionable takes on everything from office wear to pyjamas, Uniqlo has become a marketing and apparel phenomenon in its home market of Japan.
It’s been able to replicate some of that success in other parts of Asia, as well as in Europe, but the North American market has been a long-sought goal for Fast Retailing’s founder and CEO Tadashi Yanai.
Even though the first Uniqlo store opened in New Jersey in 2005, the brand has struggled to reach the same scale of success seen in mainland China, where Tsukagoshi was the brand’s chief operating officer from 2017 to 2020.
During the pandemic, many shoppers moved away from cities to seek more space to avoid infection, which affected stores and required the company to think more strategically about online sales. Tastes also shifted toward comfortable clothing as people spent more time at home.
It was at the height of the Covid-19 pandemic that Yanai tapped Tsukagoshi to overhaul Uniqlo in North America. It was his 18th relocation since joining Fast Retailing in 2002. He shut unprofitable stores, reduced inventories and took control of human resources.
Uniqlo plans to open 10 stores during the current financial year in North America (which ends in August), increasing the number steadily to reach Yanai’s goal of 200 stores
It’s going up against entrenched global fast-fashion brands already in the market. By comparison, Hennes & Mauritz has 740 H&M stores in the Americas, while Gap counts more than 2,000.
One key risk is to avoid opening stores too quickly, according to Takahiro Kazahaya, an analyst at Credit Suisse Securities. He cited Uniqlo’s experience in 2001, when it entered the UK market and opened 21 stores, only to close 16 of them two years later.
Avoiding a rapid expansion should let them “proceed smoothly”, Kazahaya says.
