Tuesday, 18 May 2010

Ubiquitous Uniqlo

Uniqlo - Japan's biggest and most profitable clothing retailer - continues to expand. It started off as a small clothes company after the war in Yamaguchi, western Japan, but in 1984 reinvented itself as 'fast clothes' shop selling clothing basics, with an aim to fill the gap between cheap shoddy clothing and expensive high quality clothing.

Although they have had a few hiccups they are monumentally successful; about 100 shops in Tokyo, including at most of the main JR train stations; they've expanded into east Asia, the US, UK, France and Russia and now have more than 900 shops; their forecast net profit for the year is 71 billion yen ( .75 billion US)*

There are no doubt lots of reasons for their success.    It's vertically integrated so the can control the whole production process and  production responds quickly if it is a longer winter or a hotter summer than expected.   It also gives them massive economies of scale.     For the quality, they are very cheap - proper down jackets for around 50$ US, non iron cotton business shirts, $25, t-shirts for 10$.   They have employed noted designers to keep clothes fresh and fashionable, while at the same time keeping a basics range that appeals to all generations. In addition they seem to spend a lot of money on fibre research - washable downs, 'heat tech', improved fleeces.     In contrast to many companies who opt for the cheapest part time labour, they also treat their employees well.   I read a while back that they had decided to employ staff on full time contracts with benefits rather than have them as minimum wage part time workers, quite a radical decision in a country where employees are not usually seen as assets.    According to the British Uniqlo site,  benefits for shop staff include: monthly store target bonuses, store campaign bonuses, monthly travel allowance, company pension Scheme, private medical insurance, 4 x annual salary Life Assurance, 50% staff discount , 28 days paid holiday per annum.   They also have tried to make themselves an 'eco' company and three or four months of the year they encourage people to return any unwanted Uniqlo clothes for recycling.   Their stores are also in prominent, high prestige locations.

Although there are lots of reasons why they are successful, and appealing,  the fact remains they are a budget clothes mega chain. And it was with some surprise that I saw their newest shop in Tokyo is inside Takashimaya, a high end Shinjuku department store. Perhaps a bit like Fosseys moving into a corner of David Jones?

A sign of the times.
Takashimaya Times Square Shinjuku

                                                                       Uniqlo Ginza
http://www.uniqlo.com/jp/ Uniqlo's Japan website, which goes through google translate reasonably.
** this figure is so staggeringly high I have tripled checked and it seems to be right.

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