Photographer: Shiho Fukada/Bloomberg

Near-Record Crowds Push Uniqlo Canada Sales Above Expectations

  • Toronto stores performing better than anticipated: Canada COO
  • Newer brands find opportunity amid gloom in Canada market

Sears Canada Inc.’s move to shutter its stores after 65 years in the country may be casting another pall across the world of bricks-and-mortar retail, but Asia’s largest clothing maker hasn’t noticed. Fast Retailing Co. says its Canadian Uniqlo stores are performing “way above expectations.”

More than 1,100 shoppers waited in a line that snaked across two floors in a suburban mall last week for Uniqlo’s opening in Vancouver, the Japanese retailer’s third location in Canada following two in Toronto last year. The first shopper staked her spot at 5:20 a.m. for the 10 a.m. opening. A similar launch in Toronto last year drew a crowd of 1,800.

The opening crowds are near records globally for the brand -- known for its minimalist, affordable basics like C$99.90 ($79.90) cashmere sweaters -- which now counts more locations overseas than in Japan, Yasu Hayashi, chief operating officer for Uniqlo Canada, said in an interview.

"We knew that if we did Toronto right, it would resonate with customers -- it’s a very multicultural, foreign brand-accepting city," Hayashi said. "But we didn’t expect the response to be this good. I can’t put a number to it, but it’s way above expectations." Fast Retailing, whose billionaire Chairman Tadashi Yanai has steered the company’s expansion overseas following an unsuccessful effort at home to raise prices, reports fiscal year results on Thursday. 

Latecomer Advantage

It bucks a gloomier trend in North America where retailers are closing stores amid the march to online shopping. Sears Canada filed on Tuesday to liquidate its remaining 150 stores with the loss of 12,000 jobs. Reitmans Canada Ltd. and Le Chateau, among Canada’s oldest apparel makers, have shut hundreds of locations in recent years. Target Corp. beat a retreat out of Canada in 2015 less than two years after entering, racking up billions in losses in the process.

Notwithstanding, newer entrants, including Uniqlo, are finding pockets of opportunity in Canada.

Canada Goose Holdings Inc., known for $900 jackets with fur-lined hoods that had long sold through wholesalers, is up 65 percent in New York since its initial public offering in March after opening its first two physical locations. Miniso, a lifestyle brand whose presence already stretches from Dubai to Jakarta, opened its first Canadian location in mid-April to find items like C$29.90 bluetooth speakers flying off the shelves. It plans 10 stores in the country by the end of the year and an eye-opening 500 "over the next few years," said Yi Ma, Miniso vice president of business development in Canada. Dollarama Inc. is growing faster than U.S. dollar-store chains, opening new locations and improving profit margins, helped in part by a less-saturated Canadian market.

Rent Discount

These stores may have a latecomer advantage. They’ve avoided over-expanding and can size their physical presence more judiciously, says Maureen Atkinson, a Toronto-based senior partner at global retail consultant J.C. Williams Group.

"It’s easier to perform well if you only have a few stores," she said. "They’re also certainly coming in at a time when they can make a better deal for real estate." Mall landlords in some cases would be offering incentives such as free rent, money to build out and signing bonuses, she said.

Sears Canada and Target have left holes in many of the country’s malls that landlords are eager to fill.

Uniqlo, for its part, has been peppered by requests to open from mall operators in other Canadian cities, including Montreal, Edmonton, Calgary and Ottawa, and may consider bringing in Fast Retailing’s other brands like GU, said Hayashi.

"We still think that the bricks-and-mortar stores are very important," Hayashi said. "However much you do on a smartphone, it’s a phone. In a store, you hear the music, feel the customer service, the way we fold -- the Japanese-ness cannot be displayed on a phone."

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