• Fri. Jul 19th, 2024

UNIQLO Business Strategy | FAST RETAILING CO., LTD.

Last Updated: 2024.02.29
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JAPAN

Community-focused Store Management Builds Affinity

UNIQLO Japan achieved record FY2023 revenue of ¥890.4 billion (+9.9% year on year) and operating profit of ¥117.8 billion (+9.2%). We achieved this great performance despite soaring raw materials costs and a weak yen by encouraging our store staff and the company as a whole to focus on addressing customer needs.

The UNIQLO Maebashi Minami IC store (sales floor: approx. 2,500 m2) opened on April 21, 2023 near a major national expressway. This location differs from our previous roadside stores thanks to its open, welcoming atmosphere that invites visitors to spend the whole day there.

Customers enjoy both indoor and outdoor fun between shopping– they can relax on the UNIQLO GARDEN lawn area or bring their children to visit the UNIQLO KIDS BOX play area. This UNIQLO LOGO STORE, with its striking exterior logo, is meant to familiarize customers with UNIQLO’s corporate philosophy. Located in an exciting, up-and-coming area with many other large retail outlets including Costco and IKEA, the area attracts families and groups. The experience extends beyond simply shopping: visitors can take a break to have a chat in UNIQLO COFFEE, relax on the lawn, or spend time with their children in the play area.

Opening the store has taught us that not just individual customers, but entire communities have high expectations of UNIQLO. We have learned that we can still grow our business even in Japan’s mature market by satisfying those expectations.

Our exclusive UTme! Graphic T-shirts with familiar local motifs have proved extremely popular at this location, and we also sell locally produced sweets in the café.

UNIQLO’s promotion of vibrant local culture to many customers will benefit communities in the long run. There are numerous other areas in Japan where we could open similar stores.

I want to maximize UNIQLO’s potential and create an even more beloved brand by promoting local store management that best suits the needs of each community.


UNIQLO Maebashi Minami IC store

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GREATER CHINA

Strengthening Business Foundation, Maintaining Solid Growth

UNIQLO Greater China FY2023 revenue and profit increased considerably, with revenue totaling ¥620.2 billion (+15.2%) and operating profit reaching ¥104.3 billion (+25.0%). We made persistent efforts to strengthen our marketing and to flexibly prepare optimum sales systems and sales floors. This enabled us to firmly capture customer demand in the second half, once COVID-19 cases decreased and consumer sentiment improved.

Our e-commerce operation has always been popular in the Mainland China market, but COVID-19 taught us that customers also look forward to shopping in our stores. When you visit a store, you remember how much fun it is to actually touch, see, and try on clothes before buying them. UNIQLO’s strength lies in our ability to offer customers an exciting shopping experience with a perfect blend of online and in-store services.

We are focusing strongly on promoting LifeWear. We showcase the value of UNIQLO clothing, and we also convey our corporate philosophy of creating even better lives through clothes. LifeWear Day events, held mainly at stores in Zhejiang province to coincide with the Asian Games in September and October 2023, were picked up by major Chinese TV channels. We will hold similar events at stores in 28 major cities in FY2024.

Our ability to deepen understanding of LifeWear and provide products and services that delight customers depends largely on staff enthusiasm. UNIQLO has been awarded a Top Employers in China certification for eight consecutive years in recognition of our excellent human resources practices. Roughly 350 new employees began their careers with us at a ceremony held in Shanghai in July. We aim to attract exceptional people and achieve even further dramatic growth.

At UNIQLO Greater China in FY2024, we will carefully create high-quality stores in better locations. These stores will offer a true LifeWear experience. By accelerating store network replacement, we will boost sales per store, further improve earnings, and strengthen operational structures. We will continue to relentlessly consolidate our position as the No. 1 brand in the Greater China region.


UNIQLO Shenzhen Wanxiang Tiandi store

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SOUTHEAST ASIA, INDIA & AUSTRALIA


Building Momentum for Future Growth

UNIQLO Southeast Asia, India & Australia reported significantly higher revenue and profit in FY2023, with revenue totaling approx. ¥350.0 billion (an approx. 50% year-on-year gain) and operating profit reaching approx. ¥60.0 billion (approx. +30%). We expanded our customer base by promoting core products throughout the year. Sales of T-shirts, Bra Tops, and cargo pants also increased as travel demand recovered.

We are deepening customer understanding and steadily expanding support for LifeWear in the Southeast Asia, India & Australia region through content creation as well as in-store events and activities designed to convey the value of LifeWear products. We are building a solid brand position, and we have also been actively involved in providing support to local communities. This support includes mask donations during COVID-19, clothing aid to flood-stricken areas, and tree-planting initiatives. Trust in the UNIQLO brand is growing. Local customer support is rising yearly, and support among people in their teens and twenties, who make up a large portion of the population, is expanding.

We had 342 stores at the end of August 2023. We have focused primarily on shopping mall stores, but roadside store sales are now strong as well. So we will strengthen roadside store openings and encourage new purchasing behavior, with the goal of making UNIQLO a shopping destination. In addition to opening roughly 60 new stores a year, we will strengthen branding and improve convenience through store network renewal, creating larger and better-located stores.

The Southeast Asia, India & Australia region boasts the world’s largest growth potential. We intend to enhance our human resources development, implement a management structure of a select group of highly talented employees, and focus on creating products that suit tropical climates. Our goal is for UNIQLO to be the No. 1 trusted brand and develop a strong global presence.


UNIQLO Ho Hoan Kiem store

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NORTH AMERICA

Fueling New Growth Phase With Swifter Store Openings

UNIQLO North America reported significantly higher revenue and profits in FY2023, with revenue totaling ¥163.9 billion (+43.7%) and operating profit reaching ¥21.1 billion (+91.9%). We clarified target products for strategic sales, ensured sufficient product volumes, and strengthened branding and information channeled through social media and other digital means.

That helped attract new customers and encourage more dedicated UNIQLO fans. Sales of HEATTECH innerwear, down jackets, linen shirts, T-shirts, Bra Tops, and other core ranges increased significantly. The quality of our products is undoubtedly extremely high, and many previous wearers of other brands are being won over by the superior caliber and comfort of UNIQLO clothes. This growing trust in our products is helping to expand our customer base.

Furthermore, we are seeing some great results from our determined efforts in recent years to train large numbers of capable staff and subsequently establish a business team that can successfully coordinate all functions: from marketing, to product planning, to store management. One hit product to emerge from the USA is the Cropped Sleeveless Bra Top. Many customers viewed the Bra Top range as innerwear, but people in America loved wearing this particular item like a standard top. It became a big hit in the USA, then in Japan and worldwide.

After transforming our operational structures to facilitate consistent profits, we now have the platforms in place to accelerate growth. By FY2027, I want to boost revenue at UNIQLO North America (USA and Canada) to ¥300 billion and the operating profit margin to 20%. That means building a network of 200 stores in the region by FY2027, accelerating the pace of annual store openings from 8 in FY2023 to 20 in FY2024.

We will actively promote our ongoing sustainability activities to ensure local customers understand our corporate stance, and we will dedicate every day to building UNIQLO into the best-loved brand in North America.


UNIQLO Soho New York store (global flagship store)

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EUROPE

Enhanced LifeWear Affinity Drives Expansionary Phase

UNIQLO Europe* reported significantly higher revenue and profit in FY2023, with revenue rising to ¥191.3 billion (+49.1%) and operating profit totaling ¥27.3 billion (+82.5%). We aim to continue this growth and increase revenue to ¥500 billion with an operating profit margin of 20% by FY2027.

European customers trust natural materials, so our superior-quality cashmere, Extra Fine Merino, and Supima® cotton products are always popular. However, the key this year was our effort on social media to showcase the value of our functional materials. This boosted sales of our synthetic fiber products, including HEATTECH and AIRism. Amid last year’s cold winter in Europe and soaring fuel prices, people began wearing HEATTECH to stay comfortable without relying entirely on heating.

On September 15, 2023, we opened the remodeled UNIQLO Paris Opera global flagship store, retaining the historic 19th-century façade but expanding the sales floor area. The new grand central staircase, reminiscent of an entrance to a theater, links the three interior floors. The natural light from the glass ceiling gives the store an open feel. Many customers had looked forward to the reopening.

We have built many stores across Europe, like the Paris Opera store, that respect the character of the local area. Opening stores in prime locations has also helped improve UNIQLO branding. I want to continue opening global flagship and other stores that enable people to experience UNIQLO’s philosophy and values. We opened our first store in Luxembourg in October 2023, and in 2024 plan to open our first stores in Rome, Edinburgh, and more.

European customers tend to value timeless basic clothing over fleeting fashion trends, so UNIQLO has many fans here who understand the appeal of our clothes. Affinity toward LifeWear, the ultimate in highly finished basic everyday clothing, is extremely high in the European market. Going forward, we want to offer products that fit with European values and develop a beloved and trusted brand.

* Does not include Russian operation given the suspension of operations at UNIQLO Russia


UNIQLO Paris Opera store (global flagship store)

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