Life And Death Of UNIQLO

When you have made the judgement of failure, can you get away in time? Now that we know that this attempt will bring losses, it is the best decision to stop this loss in time.

Twenty years ago, I announced to the staff of the company headquarters gathered here: "the company name is changed from" small county business "to" FAST RETAILING (fast Marketing) ". UNIQLO officially expands the national chain industry, opening 30 stores a year, reaching 100 in three years, and achieving the target of listing as soon as possible.

In retrospect, when the goal failed, the company might go bankrupt, but that would be an excellent opportunity for expansion.

Expansion impulse

After the listing on the Hiroshima stock exchange in December 1994, the impulse to expand is even more urgent. In order to enhance product design and information collection, we set up a 100% subsidiary company in New York, USA: impression New York company.

The company intends to create such a way. Production chain Mode: in New York, we collect fashion information and plan products, and design the new products from Osaka commodity design office and the company headquarters of Yamaguchi, and then entrust China and other overseas manufacturers for processing and production. But in the early autumn of 1995, the products made by the New York subsidiary were put into the market on the whole, but they suffered the tragedy of annihilated troops. The reason for the analysis was that there was no good communication between the New York, Osaka and the Yamaguchi headquarters. So in November 1996, the company set up a commodity design office in Tokyo. In this way, we have scattered the work of commodity planning in four parts: New York, Tokyo, Osaka and Yamaguchi. But in practical operation, it is more difficult to exchange and share information smoothly in four places. I realize that this kind of organizational structure is not feasible. We must establish an integrated mechanism for R & D in Tokyo. Thus, the New York subsidiary, founded 3 and a half years ago, announced its dissolution.

Then, in October 1996, we bought a 85% stake in a children's clothing company in Tokyo and received it under the command of "UNIQLO". However, because the profit and loss structure of the company has not been improved very well, there has been a continuous loss. Finally, we shut down all the shops of the company. From this failure, we realized that the operation of UNIQLO's own products under others' brand is not feasible.

Because UNIQLO is doing casual wear, which is similar to sportswear, can we put those sportswear that is usually worn as a casual wear to sell? So we opened a new format shop called SPOQLO.

After a year or so of preparation, in October 1997, "SPOQLO" and "FAMIQLO" launched nine stores. But when "SPOQLO" was opened to 17, and "FAMIQLO" opened to 18, we had to close the shop. The main reason is, on the one hand, this kind of format. Shop On the other hand, in order to give priority to ensuring the type and quantity of goods in these stores, sometimes it is necessary to mobilize UNIQLO products, but the stores of UNIQLO are out of stock and broken. From the standpoint of the customer, it can be bought in a UNIQLO shop, and now it will be inconvenient to run three.

Conservative obsession

The real success of UNIQLO started with the sale of thin sweaters. In 1998, we introduced the thin sweater, which made the former people as a mountaineering garment or a special costume of interest and hobby, using the price that anyone could buy, making it a popular commodity, and a rapid upsurge. {page_break}

But in three consecutive years Thin sweater In the good selling market, the sale of other products has also been benefited by the multiplying effect. Some of them have had the wrong idea that business is very simple, so long as goods can be replenishment in time, they can be sold without calling, as if the store has become an automatic vending machine. As a result, people who are keen on empty talk have emerged, and some people who have come from big enterprises should have begun to work with everything from the beginning to the beginning, but they have brought some inertia practices of the original big enterprises and do not think of new challenges.

At the same time, in the production link, because supply exceeds demand, there is always need for additional production. In the sales link, even if the shop becomes a vending machine, it no longer needs brains to sell well. Under such circumstances, as a business operator, we must ponder. All this is just due to the popularity of the thin sweater, and can not be intoxicated. We must correct the course of the ship as soon as possible.

With the curtain down of the thin sweater, the company entered a period of stagnation. Sales of stores also began to decline sharply, with a negative year-on-year growth. It can also be said that the success of the thin sweater has brought "illusion" and has led to the next round of new developments.

To break this situation, I decided to open stores in London and China.

International Hom

So we soon set up a subsidiary in London, England.

Now, when I reflect on this period of time, I feel myself in a crazy bubble. Because of the success in China, it is easy to think that we can go abroad to develop. We think it is wrong to take Japan's success overseas.

It was officially opened in London in September of 2001, that is, it took nearly a year after the establishment of the legal person. It opened 4 stores in London, and then expanded to 21 stores in the UK, but it has been losing money.

Originally, I always thought that overseas legal entities would be difficult to carry out if they did not use the local people. So the acquaintance introduced a locals, who came from the old department store in England, Martha, which was said to be excellent. And this is the beginning of failure.

From our point of view, the team he formed is very conservative, that is, the class of the management team, the class of middle management, the class of shop keeper and the class of shop assistants. As a result, the Minister of this department established their own small world within their jurisdiction and guarded the small world. This is a far cry from UNIQLO culture, which has been twisted together with equal status.

However, my instructions to the British subsidiary are "50 shops in three years" and "three years of turning losses into profits". Such a request is in itself problematic. Because we need to open 50 stores at the end of 2004, as a result, we set up shop in order to open up shop, completely ignoring the others and going directly to the number of shops, and blindly expanding.

The high rent, plus the personnel costs that need to be put into the shop, there is no "efficiency" and "effect" judgement in the installation works, information system, training and training, etc., anyway, the investment of 50 shops is the first thing to do, so the whole army is destroyed.

For this reason, we began to compress the scale, and all the stores outside the London circle were completely closed. In the city of London, or out of town, far away from the suburbs, all the bad ones are closed. As a result, all 5 stores except the downtown and the suburbs can be turned off.

After such a big failure, UNIQLO's opening shop in Shanghai can't be as aggressive as in London, but it will take one step at a time, open a shop and make a profit.

I experienced the life of "nine defeats and one win", and UNIQLO did the business of losing and fighting repeatedly. Therefore, starting a business does not require any special qualification, but comes out step by step from failure. The key question is whether you can get away in time when you have made the judgement of "failure". Now that we know that this attempt will bring losses, it is the best decision to stop this loss in time.