Japan’s Uniqlo targets global stature with fashion identity

Japanese clothing chain Uniqlo has leveraged its prowess in mass production to build a fashion empire filled with shelves upon shelves of affordable, good quality items like down jackets, underwear and T-shirts.

Now the 17-nation, 1,734-store retailer is on a quest to beat Western giants like Gap, H&M and Zara to become the world’s biggest apparel maker.

In the overcrowded, highly competitive casual fashion market, size is important but no guarantee of success: analysts say Uniqlo’s challenge is to carve out a brand identity of its own, going beyond its formula of delivering no-nonsense quality at good prices.

“To win over consumers and break through the clutter, Uniqlo needs to get even more personal,” says Stuart Green, chief executive of Asia Pacific at Interbrand, which consults and ranks brands.

“It will be critical for Uniqlo to maintain product quality and, most importantly, create a deeper, more emotional connection with its customers to drive brand loyalty,” he said.

Interbrand ranks Uniqlo as Japan’s most valuable retail brand, and eighth among Japan’s global brands, including Toyota, Sony and Nintendo. The company’s founder and chief, Tadashi Yanai, is Japan’s richest man, according to Forbes magazine.

Analysts say that to move it to its next stage of growth, Uniqlo also needs to beef up its digital presence and adapt to non-Asian markets. Winning over the huge market of suburban American shoppers will be crucial.

Consumers these days are picking brands on digital platforms and social networks, as they increasingly shop online. To cope with the mind-boggling volumes of information online, consumers now rely on brands to serve as filters and curators, Green said.

To help drive its global expansion, Uniqlo is tapping outside talent.

It just hired Christophe Lemaire, formerly of Hermes and Lacoste, who started his own Uniqlo line last year, to head its Paris research center.

In 2014, it brought in a global branding expert, John Jay. An American of Chinese origin, he who worked on ad campaigns for Nike, Coca-Cola and Microsoft, and a fleece campaign for Uniqlo, at U.S. marketing company Wieden+Kennedy.

“Whether they’re in Beijing or New York, there is a commonality to young people and what they want in life,” Jay, whose title is president of Global Creative at Uniqlo’s parent company Fast Retailing, said at a recent Tokyo event, centered on Uniqlo’s second fashion show ever.

“We have barely scratched the surface. Our potential is amazing,” he said.

Uniqlo is still relatively small, with 44 stores in the U.S., 449 stores in China and 846 in Japan, its biggest market. Retail giant H&M of Sweden has 4,000 stores around the world, Gap Inc. of the U.S., 3,700 stores, and Inditex of Spain operates 7,000 Zara, Bershka and other brand stores.

H&M and Inditex have posted healthy financial results recently, but Gap, which has the Old Navy and Banana Republic brands, is struggling, slashing prices to draw buyers and closing dozens of stores, including some in Japan. The Standard & Poor’s credit rating agency recently downgraded Gap’s debt to junk status.

Uniqlo’s profits also have slowed recently, hurt by a warm winter that slowed sales of its down jackets, HeatTech underwear and other winter apparel.