Fast Retailing, the company behind the Uniqlo brand, is setting its sights on expanding the presence of its GU brand in the United States and Europe. While Uniqlo is already well-established globally, GU, with its slightly lower prices and focus on younger clientele, is aiming to carve out its own space in the international fashion market.
Chief Financial Officer Takeshi Okazaki believes that GU has the potential to be as successful as Uniqlo. The brand, pronounced as the letters G and U, resonates with the Japanese word “jiyū,” meaning “freedom.” Despite its popularity in Japan, GU is relatively unknown in other major markets. Fast Retailing’s founder, Tadashi Yanai, envisions the company becoming a true global player by doubling its annual profit to ¥5 trillion, with a significant contribution from GU.
To achieve this goal, Fast Retailing plans to leverage the synergy between GU and Uniqlo, using the success of Uniqlo to support the expansion of GU. The company aims to offer trendy and affordable fashion that appeals to a wide audience, while also catering to international preferences.
However, expanding GU overseas won’t be easy. Analysts point out that GU’s target market of those aged 10 to 30 limits its potential compared to Uniqlo, which caters to a broader age group. Additionally, established Western competitors like H&M, Zara, and Gap pose a challenge.
Despite these obstacles, Fast Retailing’s efforts to expand internationally are showing promising results. Sales in the U.S. and Europe have helped boost operating profit, and the company plans to accelerate the opening of new Uniqlo stores in these regions. Investors have responded positively to Fast Retailing’s international ambitions, with the company’s shares outperforming other clothing companies.
Looking ahead, Fast Retailing remains optimistic about its prospects in mainland China and is committed to investing in both Uniqlo and GU to create a large market for clothes made for all people.
(Source: Bloomberg | Japan Times | Fashion United)
