Uniqlo’s quest to conquer US, one cashmere sweater at a time

Bloomberg

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 sweaters and solid basics, wants to go big in one of the world’s toughest consumer markets. Although Uniqlo is a fixture in shopping streets of New York and other coastal cities, parent Fast Retailing Co. is giving its flagship clothing brand a hefty marketing budget to ensure the brand 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,” Tsukagoshi, 44, said 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 right now, with less than 1% of the $291 billion retail clothing market. 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,” said Tsukagoshi, who speaks with precision about numbers and dates, and said 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 within the time frame, the Uniqlo CEO said “reporting a profit was a step forward, helped gain trust in customers and raised morale.”
If successful, Fast Retailing is betting that Uniqlo North America will deliver annual revenue of ¥300 billion ($2.3 billion) and an operating margin of 20% by 2027. That compares with yearly sales of ¥810 billion in Japan, roughly a third of total revenue.
Known for its simple but fashionable takes on everything from office wear to pajamas, 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, Japan’s richest man, according to the Bloomberg Billionaires Index.
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. The country is one of Fast Retailing’s key markets, with around 900 stores generating ¥538.5 billion in annual sales.
During the pandemic, many shoppers moved away from cities to seek more space to avoid infections, which impacted store locations.