Sep 18, 2014
Uniqlo expects profit at US stores in 'couple of years'
Sep 18, 2014
Japanese fashion retailer Uniqlo aims to turn a profit at its small but expanding U.S. network of stores within the next couple of years, the company's top U.S. executive, Larry Meyer, said.
Well known in its home country for its inexpensive but trendy down jackets, jeans and undergarments, Uniqlo - short for "Unique Clothing" - is a relative newcomer in the United States.
It opened its first flagship store in New York City's chic Soho neighborhood in 2006. With the addition this week of a new location in Wayne, New Jersey, the company - owned by the world's fourth-largest fashion retailer, Fast Retailing Co - now operates 26 U.S. stores.
And the company plans to boost that number by 50 percent to 39 outlets by mid-November, Meyer, chief executive officer of Uniqlo USA, told Reuters.
Still, Uniqlo's ambitious roll-out plan has yet to earn a profit in the U.S., at least in part because of high opening costs.
"We are investing in building our brand and building stores, that includes building a workforce that is capable of handling the road we are putting in place," Meyer said.
He was optimistic that the U.S. operation was "on the way to getting (profitable) within the next couple of years."
Fast Retailing has provided few details on this topic, and has said for the past few years merely that the U.S. business would emerge from the red "soon."
The retailer plans to have 200 Uniqlo stores in the United States by 2020, part of a broader push to become the world's top fashion retailer. Its competitors include Spain's Inditex, which owns the Zara chain, Sweden's Hennes & Mauritz, known as H&M, and Gap Stores Inc..
Fast Retailing's website said there were more than 1,400 Uniqlo locations worldwide, including more than 850 in Japan and more than 300 in China.
After mid-November, when the company will have 39 outlets in the U.S., the chain intends to open 10 to 15 locations a year, Meyer said.
"We will be building revenue consistent with what 200 stores would generate," Meyer said.
He said that some new stores will have the bigger flagship format and that e-commerce would make a contribution.
Building U.S. brand awareness was a big challenge, Meyer said, and sizing was another sticky issue.
Uniqlo has had to adjust its sizing by “scaling up” to fit the U.S. market, meaning a “medium” jacket in a Tokyo store may be a “small” in New York. The company is still looking into all sizing technology, he said.
In the short term, Uniqlo plans to open additional locations in Boston and Los Angeles next spring, and its first Chicago store next fall.
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