Uniqlo, for those who’ve never traveled to the Land of the Rising Sun, is essentially the Asian version of The Gap. During the 1980s and 1990s, Tadashi Yanai (now the richest man in Japan) opened hundreds of small stores in malls that offered shoppers no-nonsense, low-cost basics in a variety of colors. The company grew so rapidly that the brand became virtually inescapable on the island, and the opportunities for domestic expansion subsequently dwindled. So Yanai took his business overseas, opening 21 stores in England and three in suburban New Jersey a decade ago. In its initial international foray, Uniqlo tried to cater to the same clientele it had charmed back home -- a 2001 article in Independent noted that Uniqlo “doesn't want to be hip, or trendy, or even vaguely fashionable.” And the stores all flopped.
That’s when things got interesting. Instead of giving up on overseas sales altogether, the company made two major strategic alterations to its brand: it opened giant, glitzy stores in several major world cities (including New York) and began stocking in that American outlet more tailored Japanese sizes. From an excellent piece last year in New York:
Soon after the Soho store opened, management noticed a blip in the sales statistics that prompted another midcourse correction: The styles of clothes Uniqlo had designed for America—an approximation of the Gap, with a looser, relaxed-in-the-middle fit—weren’t selling. Uniqlo doesn’t do market research, so instead they started to ship over compact, Japanese sizes, and when those items started moving, they resized the American orders. Uniqlo had stumbled on an underserved market: the urban basics shopper.
You can’t walk into the Gap, or even the newly hipsterized J.Crew, and find yourself a wide selection of skinny jeans. This is because, with the notable exception of American Apparel, most American retailers have designed their small, medium, and large sizes to approximate the physiques (and tastes) of the general American population. Most of these customers do not want their basics fitted. What Uniqlo discovered, however, is that there are a lot of people who do—especially in New York. “People were trying to get that kind of look downtown, but weren’t completely satisfied,” says Mark-Evan Blackman, chair of the Menswear Design Department at F.I.T. “That customer essentially walked across the street and into Uniqlo clothing.”
While the company strayed a bit from its core business last year (and paid the price for it), Uniqlo is still making brisk sales in a tough economic climate; in 2009, the company reported over $7 billion in sales, up by 30 percent in many locations. And Yanai thinks overseas revenue will exceed domestic sales by 2015. (A second massive outlet in the Big Apple, scheduled to open later this year, will certainly help.) Considering how dramatically shopping habits have changed in modern times -- the average American purchases 60 pieces of new clothing per year -- it’s no surprise that urban shoppers have gravitated to these well-made, well-tailored, and affordable threads. This slim Chicagoan, for one, is excited that he won’t need to fly east to obtain them anymore.