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Uniqlo Reigns Supreme

by W. David Marx
26 January 2009
Introduction
Uniqlo did not just survive a hostile 2008, but became its master
Keywords:
Uniqlo
2008 turned out to be an incredibly successful year for Uniqlo — and Uniqlo alone. The Japanese media can no longer mention the mass retailer without using the word hitorigachi — meaning "sole winner" or "to reign supreme." In a toxic recessionary retail environment, where most major apparel chains experienced 10-15% declines in same-store sales for December, Uniqlo finished the year with +10.3% growth. This came at the heels of Uniqlo's stellar November, with 32.2% same-store base growth and the largest recorded monthly sales in the brand's history. These accomplishments allowed parent company Fast Retailing to raise its consolidated earning projections, to an operating profit of ¥99 billion for the August 2009 fiscal year — an expected 13.2% increase from last year. Net sales are currently forecast to hit ¥627 billion — a 6.9% increase. Investors are pleased as well: shares of the company have gained in the past year, compared with a decline in the overall Topix Retail Trade Index.

The recession has certainly made Uniqlo's low price clothing an obvious choice for consumers, but economic anxiety cannot fully explain the brand's success. Uniqlo deserves credit for its constant stream of proactive campaigns designed to win over a large number of diverse consumer groups, both in Japan and abroad.

Although Yamaguchi Prefecture-based Fast Retailing has a long history of selling apparel, the idea of Uniqlo as a Gap-style national brand only dates back to 1997, when the company teamed up with ad agencies to refine its image. Only a year into this new strategy, the company hit the jackpot with a widespread consumer boom for its fleece products. Uniqlo lost steam after the trend's end, however, and eventually experienced declining profits in 2002 and 2003. Ever since, the brand has been engaged in a large number of innovative campaigns to win back public interest.

In just the last two years, Uniqlo has made a distinct effort to attract sophisticated customers beyond the middle-mass base. Their award-winning UNIQLOCK became the favorite screensaver of Japan's young PC users thanks to minimalist graphic design, chronological functionality, well-choreographed dancing, adorable Japanese female dancers, and original music from producer Fantastic Plastic Machine. The bilingual free magazine UNIQLO PAPER helped associate the brand with New York hipster culture thanks to the Chloë Sevigny on the cover and photography by Terry Richardson. In Japan, monthly advertorials in men's magazines like Popeye let fashion-forward readers in Japan see new products styled according to the latest fashion principles.

Retail spaces have also played a key part in the brand expansion. Uniqlo's Ginza store — right on the neighborhood's main avenue — raised the brand's profile as a purveyor of trendy fashion rather than generic basics. Last year's UT T-shirt store in Harajuku employed the talents of famed creative director Kashiwa Sato to offer a high-tech shopping experience. T-shirts, including a Pantone-color series, are available in giant vending machine capsules within a space over-run with moving LED message boards.
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