By 1998, Uniqlo had grown to include over 200 stores with their signature fleece jacket for $15 being one of their most sought-after products – though some felt its quality had suffered as it became widely associated with cheapness and poor craftsmanship.
Yanai created and runs Tokyo-listed clothing empire Fast Retailing, parent of Uniqlo. Additionally, Fast Retailing boasts Theory, Helmut Lang and J Brand brands as subsidiaries.
How Uniqlo became a fashion empire
Yanai took on his father’s chain of 22 men’s tailoring stores and transformed it into Uniqlo (Unique Clothing Warehouse). Soon thereafter he began offering store brand clothes, and quickly expanded. Yanai found inspiration in traveling around Europe and America where large casual apparel chains offered clothes at reasonable prices for everyday wear.
Yanai believed that building an empire should not compromise his morals; thus he adopted Peter Drucker’s management philosophy which emphasizes profits and morality as being inseparable. Additionally, he was impressed by American retailer GAP which had recently experienced rapid expansion with great customer reviews; so he followed their model by selling only their own-branded clothes while keeping costs to a minimum.
He approached Mickey Drexler, then-president of GAP and studied all he could about its retail operations and retail storefronts. He was especially drawn to GAP’s unique SPA manufacturer retailer model which vertically integrated product planning/design/production/distribution/marketing into one entity.
Replicating GAP’s model in Japan proved more complex. Although GAP enjoyed immense popularity among American customers, its store operation struggled due to a difficulty in finding appropriate sizes for Japanese shoppers and finding products in stock that suited their preferences.
Yanai soon began experimenting with innovative technologies that would enhance the retail experience, including creating an automated machine to inspect all products in stores and provide more accurate information to customers, thereby decreasing checkout time and increasing customer service; ultimately, this innovation allowed for more goods at reduced prices, leading to greater profit for his company.
Additionally, Yanai focused on cultivating a corporate culture characterized by teamwork and outstanding customer service, creating customer satisfaction surveys to assess where improvements could be made and achieving a 700 percent return on shareholder equity in 36 years as a reward for his efforts.
Today, Uniqlo is one of the world’s biggest fashion empires. Their innovative approach stays abreast of trends and technological developments to offer clothes that are both aesthetically pleasing and functional, perfect for anyone wanting to look and feel their best.
How Uniqlo innovated
In 1984, Yanai established the first branch of Unique Clothing Warehouse (later shortened to Uniqlo) in Hiroshima. Inspired by European and American casual clothing chains such as Benetton, Esprit, and Gap he had seen during his travels, Yanai had grand ambitions for Uniqlo – hoping that it could become a global brand while replicating their retail model into Japan.
At first, his goal was to offer simple casual clothing designs at reasonable prices. His company made its own private label products rather than importing ready-made fashion from abroad in order to cut out middlemen and keep its prices down; this enabled them to keep prices low but meant they lacked access to current trends; consequently they needed to constantly innovate in order to remain competitive.
Yanai’s most significant breakthrough came with fabrics. Her team developed proprietary technologies that enable fabrics to move and stretch in various ways, keeping clothes looking brand new for longer. Examples include HeatTech (a thermal lining designed to keep wearers warm without adding bulk), AIRism (a soft fabric that is both breathable and quick-drying), LifeWear (an amalgamation of casual and sportswear), and UV Cut (an ultraviolet blocking material which blocks 90% of ultraviolet rays from reaching skin) technology.
Yanai employs an approachable leadership style and has developed an environment fostering innovation and customer focus. Unusually for Japanese firms, he made the uncommon decision of communicating with employees in English – and has even created an open structure within Uniqlo which encourages employees to make suggestions – something which has enabled Uniqlo to become a global brand which adapts easily to various cultures and customer demands.
Uniqlo now holds revenue of $17 billion, placing them as the fourth-largest apparel retailer worldwide. Their parent company, Fast Retailing, also owns other clothing brands including Theory, Helmut Lang and J Brand – with Yanai’s ultimate aim being transforming his Tokyo-listed company into the world’s number one apparel retailer via massive expansion in America.
How Uniqlo became a global brand
Uniqlo’s success can be traced back to the principles instilled by Yanai when he opened his first store in 1984. Inspired by European and American brands that had seen significant success in Japan, he decided to vertically integrate his business by taking control of every stage from design, production and retail – cutting costs significantly and increasing profits exponentially.
Yanai has made innovation an essential aspect of Uniqlo’s success, instilling it into all employees. To remain relevant and stay competitive, Uniqlo regularly evaluates and updates its entire product line – adding materials, textures, cuts and colors as needed to stay current with trends while creating timeless basics that fit easily with each person’s individual style.
Uniqlo has long been at the forefront of using technology to enhance customer experiences. They use integrated circuits in stores to speed checkout times and quickly deliver popular items directly to customers. Furthermore, they invest heavily in training storefront employees so as to provide customers with a pleasant shopping experience.
Uniqlo has developed an appealing brand message that positions it as a modern Japanese company that encourages casual clothing styles, with this being reflected in how the business conducts itself and products such as its AIRism clothing being lightweight, breathable and affordable; which are qualities most consumers desire in summerwear fabrics.
Lastly, the company boasts a vibrant corporate culture that upholds its goals and values. Yanai is an active leader who fosters pride among his employees. Additionally, he encourages creativity and open communication throughout the organization – something rare among Japanese companies but has been integral to its global success.
How Uniqlo became profitable
By the early 2000s, Uniqlo had become a household name in Japan. Operating both physical stores and an online shop, this clothing retailer was exceeding profit goals thanks to their fleece jacket sales (reportedly 2 million units annually), earning them an excellent reputation for offering affordable yet functional apparel.
Uniqlo’s success can be largely attributed to innovation. Their latest fabrics such as Heattech and Airism were created with lifestyle in mind; from keeping wearers warm during winter weather conditions to helping prevent sweating or odour issues. Furthermore, Uniqlo draws its inspiration for new product designs from customer comments; their customer center receives approximately 70,000 comments annually which help guide product design decisions.
Uniqlo also conducts its research and development internally, enabling it to oversee every step of its business processes from design, materials procurement and production all the way through production and sales – something its competitors cannot match! This helps ensure its products remain high-quality.
Uniqlo continues to expand its global network, opening over 2,200 stores in 22 countries around the globe since 2014. Their international footprint has expanded exponentially and they are on track to becoming the global number one apparel brand by 2024.
Uniqlo will need to make an impactful statement about themselves in America to achieve this goal. A solid presence could enable the company to evolve from being just another value retailer into becoming a fashion brand with prestige.
Uniqlo’s success can be measured in part by its numerous accolades, which have seen the brand win Best Brand of the Year from Fast Retailing as well as Forbes recognizing them as world-leading innovators in 2018.
Uniqlo’s longevity is a tribute to its founder’s unfaltering determination, drive and grit – three characteristics which have seen him through numerous challenges like global recessions and initial store failure. Yet he never concedes defeat; rather he continues searching for solutions; this approach can be seen through Uniqlo’s 23 Management Principles that each employee adheres to including customer firstness, being disruptively self-reliant and giving back to society.
