Winners and Losers in U.S. Clothing Retail
Uniqlo tries to dominate the worldwide retail space.
Oct. 16, 2011 — -- 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.
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