Winners and Losers in U.S. Clothing Retail

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Maybe things are looking up for U.S. retailers after all, or at least some of them.

September's retail sales, announced Friday, were better than expected, and some retailers, including apparel company Uniqlo, have aggressive plans for expansion by both quantity of stores and store size.

Uniqlo opened its second store in the United States on Friday -- a whopping 89,000-square-foot, three-story flagship with cathedral ceilings and revolving mannequin displays on storied Fifth Avenue in New York City.

The opening ceremony was complete with a ribbon-cutting ceremony featuring New York City Mayor Michael Bloomberg and actress Susan Sarandon, who is starring in ads for the company. Advertisements also feature Darren Criss of the TV show "Glee" and David Karp, founder of blog site Tumblr, along with several other celebrities diverse in age, ethnicity and background.

Its first store, which opened in New York City's bustling and trendy shopping district, SoHo, in 2006, is more than 35,000 square feet in size.

The chairman of the company, which originates from Japan, hopes Uniqlo will be the No. 1 retailer in the country, with a store in every major U.S. city, and have $50 billion in sales worldwide by 2020.

Uniqlo currently is the fourth-largest retailer in the world with $10 billion in sales, according to Chief Operating Officer Yasunobu Kyogoku. And $10 billion of that future $50 billion is expected to come from the United States.

"That is our dream and our long-term goal," Kyogoku told ABC News.

After opening Uniqlo's third U.S. store, in its 64,000-square-foot glory, in Manhattan's Herald Square on Oct. 21, Kyogoku said Uniqlo is hoping to expand further in New York City and its outlying areas, Los Angeles, San Francisco, Chicago and all major metropolitan areas. The stores at Herald Square and Fifth Avenue will be its two largest stores in the world. Uniqlo's Harbourland store in Kobe, Japan is the company's largest store outside the U.S. at 42,300 square-feet, according to a company spokesperson.

Though Uniqlo is opening stores, many other retailers across the country have been closing underperforming stores.

Uniqlo, too, has closed some U.S. locations. In 2005, the chain opened smaller stores in New Jersey shopping malls but closed them soon afterwards, before opening its SoHo store in 2006.

"They did not perform very well, so we decided to close them down and shift our strategy," Kyogoku said. "We went after the jugular by doing a flagship store location back then in what was an up-and-coming area, SoHo."

The grand scale of Uniqlo's stores are in contrast to the clothing they carry: simple, with solid colors and a lack of logos and frill.

The Uniqlo philosophy, according to Kyogoku, is: Uniqlo for all.

"We don't target 18-year-olds or people who have a particular lifestyle. No matter what your taste or demographic, we do believe we have great articles of clothing at Uniqlo," he said.

He said the company does not put its logo on its clothing because he believes the "customer is the brand," because he wants customers "to dress they way they wish to dress and look [how] they wish to look."

When asked if Uniqlo's expansion plans could be too ambitious, Kyogoku said the company is "very disciplined" and is taking its time analyzing the "best" retail space in the country.

The company's expansion in the U.S. is relatively slow compared to its footprint in Asia. The company has more than 1,000 stores in about a dozen countries, with almost 800 stores in Japan.

Before Uniqlo, Jennifer Black, CEO of the independent research firm, Jennifer Black and Associates, said the American shopping experience has evolved into a visual spectacle, citing Abercrombie & Fitch stores as an example.

"When you walk into Abercrombie, it's retail theater," she said. "The stage is set."

Black said most national U.S. retailers "do a pretty darn good job of communicating their message, whether it be through windows, advertising."

On the other hand, she said, retailers have been closing stores and downsizing because "we have been so over-stored."

"Most of these retailers overbuilt, and they built so many stores such that they even cannibalized one another with their own shops," she said.

During the second quarter of 2011, more than 500 retail and restaurant establishments were announced to be closing, compared to about 1,600 in the same quarter of 2010, according to a joint report from the International Council of Shopping Centers (ICSC) and PNC Real Estate Research. The number of store-closing announcements in the second quarter declined by 66.2 percent compared to the quarter last year.

The stores that closed in the 2011 quarter represented approximately 6 million square feet, which accounted for 0.04 percent of the total inventory of retail space within the country, a 33 percent decrease from the second quarter of 2010.

On Thursday, Gap Inc., which owns Banana Republic and Old Navy, said it plans a 20 percent reduction in North American Gap stores by 2013 but will expand its Gap Outlet stores.

There were 1,091 Gap stores and 22 franchise stores in North America as of July 30. But by the end of 2013, the company hopes to have 700 Gap speciality stores and 250 outlet stores.

As of July 30, Gap Inc. had 3,248 company-operated or franchised stores across 34 countries.

Emily Russel, a spokeswoman for the Gap, said, "There are plenty of Gap stores across America and in Canada."

She said the company will continue to serve customers through its online channels, which are experiencing growth.

Black said Gap's online business is a significant growth vehicle for the company. The online division is expected to reach $1.5 billion in revenue by the end of 2011, and is on track to reach $2 billion in revenue and operating income of $500 million by the end of 2014.

"It's really about productivity per square foot," she said. "Many of these retailers are moving to a smaller box model and, obviously, you have to have the right merchandise. If you don't have the right merchandise, forget it."

Malachy Kavanagh, senior staff vice president of communications and external relations for the ICSC, said downsizing is evident across merchandise categories, as evident by Best Buy's experimentation with kiosks.

Bookseller Borders has declared bankruptcy while Barnes & Noble has shuttered several flagship stores -- even in populous New York City.

"The days of big stores are over, in my opinion, and we'll see this trend for quite a few years to come," Black said.