Fast Retailing, Uniqlo’s parent company, aims to expand the presence of its sister brand GU in the United States and Europe to become a global retailer with annual sales of 10 trillion yen ($66.3 billion).
As Asia’s largest clothing manufacturer, Fast Retailing believes it is possible that GU can achieve the same success as Uniqlo. “We can open as many GU stores as Uniqlo,” Takeshi Okazaki, chief financial officer at Fast Retailing, said in an interview with Bloomberg.
GU, pronounced like the letters G and U, is slightly cheaper than Uniqlo and is aimed at younger consumers. Although the brand currently has a strong presence in Japan, it is even less well known in other countries.
“GU has the same potential as Uniqlo”.
Fast Retailing is looking to strengthen its international presence as part of founder Tadashi Yanai’s ambitions to transform the company into a global powerhouse. Yanai’s strategy is to increase annual profits to 5 trillion yen in the coming years, with GU contributing about 700 billion yen, Okazaki said in an interview.
GU has already made its first foray into North America, opening its first pop-up store in New York City’s SoHo district in 2022. “We want to make GU a store full of trendy products that are easily affordable and make people feel like they want to enjoy fashion,” Okazaki said. “To achieve this goal, we cannot just stay in Japan.”
Recognizing the potential of developing overseas markets, Okazaki noted that GU benefits from a strategic synergy with Uniqlo, which will simplify the process of establishing new GU stores. By leveraging Fast Retailing’s existing collaboration with Uniqlo and catering to international preferences without having to expand the brand’s product range, Okazaki said it should be easier to grow in new markets.
“If this had been 10 years ago we wouldn’t have been able to do this, but people’s data and clothing trends are shared internationally. Sometimes we need to add certain things, but overall we control the total number of products and make them globally usable.”
Fast Retailing’s expansion outside Japan and Asia is proving successful, as shown by higher-than-expected operating profits in the United States and Europe for the fiscal first quarter ended November.
Fast Retailing plans to accelerate Uniqlo’s international growth and open 20 stores in North America and 10 in Europe annually, according to the company’s annual report.
While international sales accounted for more than half of Uniqlo’s revenue in its last fiscal year, GU thrived primarily in Japan. However, despite its domestic success, GU’s annual sales only reached 295 billion yen, in stark contrast to the 2.33 trillion yen generated by Uniqlo from its extensive network of over 2,400 stores worldwide.
Still, Fast Retailing is poised to accelerate GU’s growth. “We intend to aggressively make the necessary investments to grow GU over the next few years,” Okazaki concluded. “I see that Uniqlo and GU together will create a large market for clothing for all people in the future.”
This translated post previously appeared on FashionUnited.com