The hip clothing retailer hopes a new Manhattan flagship—and a fresh take on Japanese design for the masses—will lure U.S. shoppers
Plain sliding doors, neat minimalist shelves, and neutral-colored floor coverings—the design elements of Uniqlo's new global flagship store sound downright generic. But each detail in the Japanese casual-clothing retailer's 36,000-sq. ft. building, the largest single-brand store to open in Manhattan's SoHo shopping district, is actually a nod to the contemporary domestic and retail interiors of Tokyo or Osaka. The doors evoke paper shoji screens, the spare storage elements suggest those found in a typical Japanese home, and the plain, look-alike rugs are tatami mats.
Architect Masamichi Katayama designed the space, and describes the store's "Japanese-ness" as "seiriseiton." "This means 'simplicity' and 'orderliness,'" he explains via e-mail. "This was one of the key concepts for the design." Katayama heads the Tokyo firm Wonderwall and this wasn't his first New York retail project. He also created elements of SoHo's trend-setting Japanese boutique, A Bathing Ape.
Though compared to the street-chic offerings of A Bathing Ape, not to mention other well-known Japanese brands such as Sanrio's Hello Kitty toys or Issey Miyake's origami-esque Pleats Please clothes, Uniqlo's offerings have more in common with Gap's (GPS) pared-down, American-preppy aesthetic.
The parallel is evident in Uniqlo's new U.S. ad campaign, which kicked off Nov. 6. The ads feature stylish, straightforward portraits of Japanese and U.S. celebrities such as Iron Chef star and restaurateur Masuhara Morimoto and rock singer Kim Gordon wearing Uniqlo sweaters, a clear echo of Gap's current print campaigns with celebs such as director Steven Spielberg and actress Helen Mirren.
But the Gap parallel only goes so far. The subtle Japanese design elements and the recruitment of a trendy young architect reflect Uniqlo's new, overall branding strategy—one that balances a traditional Japanese identity with a hip international appeal. The clothing line's parent company, Japan's Fast Retailing, has high hopes for the New York flagship, which opened on Nov. 10 and is double the size of Uniqlo's Japanese flagship in Tokyo's Ginza shopping district.
Uniqlo is even debuting a bright, new logo specifically for the SoHo store that shows the brand's name written in English and Japanese Katakana. But by making a big design splash in SoHo, Uniqlo hopes to establish a distinctively "Japanese" identity for the company's moderately priced, basic clothing.
Hence the very un-Gap architectural centerpiece dreamed up by the company's creative director, Kashiwa Sato, and Katayama: A giant aquarium filled with rotating mannequins wearing Uniqlo clothing. It's meant to lure passersby from the street as well as convey a simultaneously whimsical and hip sense of Japanese pop culture. Think Blade Runner androids in a Spirited Away background.
"The image I had [of the Uniqlo brand] was the ultra-contemporary aspect of Japan rather than the traditional. I integrated some high-tech elements such as mannequins that spin around [in] the displays," writes Katayama via e-mail. The more than 30 TV monitors showing animations of the new Uniqlo logo and a mezzanine flanked by floor-to-ceiling displays of brightly hued cashmere sweaters reinforce the futuristic feeling.
The Uniqlo flagship isn't the brand's first retail store in the U.S.—or even SoHo. Last fall, Uniqlo opened three stores in New Jersey malls, catering to the Gap crowd. This was followed by two temporary retail stores in SoHo toward the end of 2005. Earlier this year, during Fashion Week, Uniqlo opened two "pop-up" stores inside renovated shipping containers around Manhattan.
Mass Market Slowdown
This fall, it added a small boutique at Rockefeller Center. While the approach seemed to be sending mixed brand messages, Nobuo Domae, chief executive of Uniqlo USA, says the stores were experiments to see what retail approaches would appeal most to American consumers. The conclusion? Focus on Manhattan—many styles flew off shelves at the temporary SoHo stores.
In Japan, Uniqlo—the name is a play on "unique clothes"—caters to a mass audience, offering underwear, khakis, sportswear, tote bags, and other essentials. Its customer base includes grandparents, teens, and young couples with toddlers. But about four years ago, sales started to drop and consumers complained that Uniqlo's offerings were too plain and low quality. (That Uniqlo's clothes were manufactured in rival China also didn't sit well with some customers.)
So in September, 2005, Tadashi Yanai, the founder of Fast Retailing, resumed the position of Uniqlo president that he had held until 2002. Yanai's goal is to ramp up Fast Retailing's annual sales to $10 billion by 2010, and to make Uniqlo the world's No. 1 casual clothing retailer. And the New York flagship is the company's new global face. "Japan is isolated," he says. "New York is easy to reach from anywhere."
Changing the Layout
Since Yanai took back the reins of Uniqlo, Fast Retailing's overall sales (which include other brands, although Uniqlo is the flagship product) have risen 17% (for the fiscal year through Aug. 31, 2006) to $3.8 billion. While it's hard to pinpoint exact reasons for the sales spike, such increased numbers suggest that Uniqlo's branding strategies are working in Japan.
Whether Uniqlo can double annual sales within four years depends on whether a U.S. audience responds to the new ads and store, opening up a larger market.
In a bid to appeal to the U.S. market, Uniqlo is expanding beyond the utilitarian, mix-and-match basics that shoppers saw first in the temporary stores. "Before, the store layout was like a clean department store, with distinct item areas, such as underwear, tops, and bottoms," says Domae. "Now we categorize via style, such as 'street fashion' and 'office looks.'"
Breaking with Uniqlo's marketing strategy in other countries, Domae has also begun emphasizing quality over low prices in the U.S. stores. Uniqlo's first mega-hit product, back in the late 1990s, was a $17 fleece jacket. In the U.S., it's pushing $60 cashmere sweaters instead.
Key to this strategy is Uniqlo's two-year-old New York design studio, which works with teams in Tokyo, Paris, and Milan to oversee the brand's design globally. Partnerships outside the company are important, too. For its Spring, 2007 "Designer Invitation Project," Uniqlo is joining with a handful of New York-based fashion-world darlings, such as Alice Roi and Philip Lim, to design limited-edition Uniqlo collections.
The move is right out of Target's (TGT) and H&M's successful design-for-all playbooks. The two companies, known for their affordable prices and super-trendy styles, regularly sell out items by recognized fashion designers such as Isaac Mizrahi (at Target) and Karl Lagerfeld (at H&M).
The U.S. playing field for stylish and affordable clothing is clearly crowded, though Uniqlo's chances may be improved by the fact that U.S. shoppers are spending more on casual clothing. Researcher NPD Group states that American women spent more than $10 billion on T-shirts in 2005, up 10% from 2004. Total U.S. apparel sales increased 4% in 2005, reaching $181 billion. But Uniqlo will have to distinguish the brand from its competitors.
Using its "Japaneseness" as a point of differentiation could work; U.S. audiences certainly responded well to international competitors H&M Hennes & Moritz (Sweden-based) and Zara (Spain-based, owned by Inditex), European clothing companies known for distinctively Continental-style tailoring and flair, rendered in more affordable fabrics. Both saw sales growth in 2005, while U.S.-based Gap saw sales drop.
Domae says he's aiming for $1 billion in sales by 2010 for Uniqlo USA alone. "This year, we have to do a lot of advertising. Next year, we'll have to be concerned with profits."