Uniqlo's Fast Fashion Comes Late to Australia

Uniqlo store in New York Photograph by Victor Blue/Bloomberg

Fast Retailing is finding its way down under.

The Tokyo company behind Uniqlo said today it will open its first store in Australia this spring, a massive four-story beachhead of cheap clothes in a Melbourne mall. Hennes & Mauritz will be opening its own Australian flagship at about the same time Fast Retailing is cutting the ribbon.

For Uniqlo, the latest expansion is another in a plan to become the biggest apparel retailer in the world. But it also shows that the company has a bit of a Godzilla problem: undeniable power matched by a pace that is, well, lumbering. Gap has been in Australia since 2010. Zara, an Inditex brand and the world’s largest apparel retailer, opened a store down under in mid-2011.

Australian retailers are already cutting prices to compete with the influx of international giants, suggesting that the first-mover advantage for international retail companies may already be gone.

From a population perspective, Australia isn’t incredibly attractive. It has about one-sixth as many people as Japan spread over an area 20 times larger. Those aren’t the kind of ratios that add up in the increasingly slim bricks-and-mortar retail game. But Australia is a relatively affluent place, with GDP per capita at $43,300 coming slightly behind that of the U.S. ($50,700) but well ahead of Japan’s ($36,900).

If Uniqlo is savvy, however, it won’t need to dot the Outback with sleek stores. The Melbourne flagship will act as a billboard—a kind of brand embassy—fueling website sales far and wide.

Meanwhile, Fast Retailing plods on. It plans to open 10 new U.S. stores this fall and its first German store in Berlin in the spring. Australia, the company says, will be its “first step into markets in the Southern Hemisphere.”

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