Uniqlo Expands Global Strategy with Flagship Stores in Europe

Uniqlo is reorienting its strategy to emphasize larger stores globally, opening new flagship locations in Europe. Fast Retailing, Uniqlo's parent company, has expanded its European presence with stores in cities like Edinburgh, Rome, Milan, and Nice, aiming to enhance brand visibility.

Uniqlo Boosts European Presence with New Flagship Stores, Achieving Significant Sales Growth

Uniqlo is reorienting its strategy to emphasize the development of larger stores worldwide. To capitalize on its success, Uniqlo will establish flagship stores in Europe.

Fast Retailing, the proprietor of the Japanese brand, is expanding its European operations. In April, it established new flagship locations in Edinburgh and Rome in the United Kingdom. This spring, it also expanded its presence in Europe by opening stores in Milan, Italy, and Nice, France, bringing the total number of stores in the region to 76 out of 2,469 worldwide.

Uniqlo's business in Europe differs from its more established operations in China and Japan. Most of Europe's store sales are generated by premier stores located in major cities. To effectively communicate the Uniqlo brand concept and showcase the Uniqlo lineup, Fast Retailing determined that it was necessary to establish additional landmark stores on the continent, as numerous well-known labels competed.

According to Nikkei Aisa, in Europe, the revenue per store for the fiscal year ending in August 2023 was 2.9 billion yen ($18.1 million), while in Japan, where the company operated 800 stores at the end of the fiscal year, the revenue per store was 1.1 billion yen. The figure was 601 million yen in greater China, encompassing the mainland, Hong Kong, and Taiwan, where Uniqlo had 1,031 stores.

"The company's European business has experienced ‘outstanding growth rates’ within the Fast Retailing group," the company stated in April. Sales at its European unit increased by 38.4% year-over-year to 14.21 billion yen during the first half of this fiscal year, from September 2023 to February 2024. Its operating income increased by 50% to 2.5 billion yen.

Uniqlo Competes with Fast-Fashion Giants in Europe, Expands Brand Recognition and Store Presence

The fashion industry in Europe is a battlefield, with fast-fashion titans like Inditex of Spain, which operates Zara, and Hennes & Mauritz (H&M) of Sweden dominating the market. According to the most recent financial disclosures, Fast Retailing generated $18 billion in annual global sales, Inditex generated $39 billion, and H&M generated $23 billion.

"The concept of 'life wear,' which stands for high quality, basic design, and clothes' ability to match with any item, has been accepted in Europe," said Jun Kawahara, a senior analyst at Daiwa Securities. Fast Retailing sources its products similarly to fast-fashion brands through a massive supply chain that includes hundreds of garment factories. But, said Kawahara, "People in Europe don't consider Uniqlo to be fast-fashion."

A typical illustration is an ultralight-down parka from Uniqlo. Sawa Suzuki, a 25-year-old woman who studied in France until 2020 and currently works in the fashion industry in Japan, recollects, "I saw many people wearing it under their fashionable jackets in winter."

Customers' social media posts showcasing Uniqlo's built-in bra top have gone viral. The top may be worn without undergarments. The Round Mini Shoulder Bag is another success that has expanded Uniqlo's brand recognition in Europe.

"Uniqlo's bra top has been a game-changer for my daily comfort and confidence," said Dana Dyusheyeva, a 24-year-old woman living in London. "Unlike fast fashion options from brands like Zara and H&M, Uniqlo offers staples that are versatile and enduring enough to be worn throughout the year," she said.

"Overall Uniqlo has a good reputation coming from Japan which, in the eyes of European consumers, have a focus on craftsmanship and quality," said Tom Snoijink, a 32-year-old music label manager based in Amsterdam.

Nevertheless, the organization must continue to enhance Uniqlo's brand recognition in Europe. A 25-year-old German man who has been donning Uniqlo's shirts for a few years stated, "I have no experience [with] Uniqlo's shirt torn ... But I feel Uniqlo is still quite unknown."

Uniqlo plans to open ten new stores in Europe during the fiscal year ending in August. "We are in progress in achieving the goal," a spokesperson told Nikkei Asia.

Uniqlo Expands into Eastern Europe with First Polish Store, Emphasizes Global Growth and Quality

Uniqlo is expanding into Eastern Europe and will open its inaugural store in Poland this autumn. The new store's sales floor, located in a retail mall in Warsaw, will be approximately 1,300 square meters. The Warsaw outlet was established in response to the success of a pop-up store in a commercial facility in 2022.

"As Uniqlo continues to send more staff members trained through experience as store managers in Japan overseas, the company's confidence in demonstrating leadership at overseas stores has grown," said Kawahara, emphasizing the company's strong global expansion strategy.

Uniqlo has been conducting "scrap and build" operations in China, which involves closing unsuccessful stores to utilize resources more effectively, in contrast to Europe. During the April announcement of Fast Retailing's half-year results, Takeshi Okazaki, the company's chief financial officer, stated that certain stores in mainland China have experienced low monthly sales due to changes in the market and customers' lifestyles.

"We are currently placing a strong emphasis on the quality of new store openings," the Uniqlo spokesperson said, reaffirming the company's commitment to providing a high-quality customer experience. In mainland China, store closings exceeded openings in the first half of the fiscal year ending in August.

Kawahara stated that Fast Retailing is pursuing "all-round diplomacy," irrespective of the region, with a sales objective of 10 trillion yen. "It is trying to shift to a more efficient business model while consumption is weak in China."