UNIQLO Plans To Add Thousands Of Overseas Stores To Brand GU

For Uniqlo

Price rises hit hard, as Asia's largest

retail

Uniqlo UNIQLO has no room for improvement in price positioning. On the contrary, downlink seems to be an inevitable trend.

It is reported that the Fast Retailing Co. Ltd. (9983.T) fast marketing group plans to pave the way for the group's cheap brand GU GU (Japanese name jee-you, free meaning, excellent Chinese name), and plans to open 1000 stores overseas over the next 10 years. At present, there are only about 10 overseas outlets of the brand.

Tadashi Yanai Ryui Masa said that the expansion of GU will still start in Asia, where Uniqlo UNIQLO has been successful and has become "Asia first".

At the beginning of April this year, Fast Retailing Co. Ltd. fast marketing group released interim results, the group's interim operating profit fell by 33.8% year-on-year, and net profit fell by 55.1% compared to the same period last year. The group's urgent reduction of its annual profit forecast to five years ago lowers the market.

In addition to the economic downturn in Japan and the macroeconomic factors of China's economic downturn, the price rise of Uniqlo UNIQLO in the past two years has also had a rather negative effect.

According to the data, due to the increase in pricing, the Uniqlo price per unit price in the first half of fiscal year was 4.7%, while the number of customers decreased by 6.3%, resulting in a 1.9% decline in the same store sales.

Under the pressure of the same store sales decline, Tadashi Yanai Ryui Masa finally compromised, and lowered the price for Uniqlo UNIQLO, but Tadashi Yanai Ryui Masa's Japan's richest holder was accompanied by the decline of the group's share price, which was stolen by SoftBank Corp. (9984:Tokyo) Softbank group's Masayoshi Son Sun Zhengyi.

In fact, in the face of the shrinking of the global women's wear market and the competition of the e-commerce industry, fast fashion brands including H&M, Gap, Uniqlo and so on have begun to rely on the promotion war to compete for the market in recent years. This not only weakens the profitability of the brand, but may further cause the inventory risk.

Last week, analysts had predicted that the H&M parent company might have the risk of stock write downs, while the Uniqlo stores in the United States last year, together with the J Brand brand, had generated 16 billion 100 million yen, or about $134 million 400 thousand.

After the price cut, the performance of Uniqlo UNIQLO is still repeated. The brand Japanese market in August dropped 1% in the same store, while in July it increased by 18.1%. On the contrary, the GU brand was excellent, steady and rapid growth, and the same store sales increased double digits in the first half of the year.

In the three quarter of May 31st, in the 2016 fiscal year ending May 31st, GU operates 351 stores, and is the second largest brand of the Retailing Co. Ltd. fast marketing group, but only about 10% of the group's revenue.

As of the 2015 fiscal year of August 31, 2015, GU business profit recorded a 1.7 fold increase, helping the Fast Retailing Co. Ltd. XXX group to turn a profit out of the global brand business except Uniqlo UNIQLO.

The group's global brand business also includes Theory, COMPTOIR DES COTONNIERS, PRINCESSE TAM.TAM, J Brand, and all four brands are basically at a loss.

The cheap GU positioning brand that was born in 2008 is only half the price of Uniqlo UNIQLO. At present, besides the Japanese local market, it is only available in the two main markets of mainland China and Taiwan.

GU entered China's mainland market in 2013, and settled down in Huaihailu Road, Shanghai, in September 30th with the flagship store of Uniqlo UNIQLO. The store is also the first overseas point of GU. However, three years after entering China, GU has only 4 in the mainland market, and there is no independent e-commerce website. In August 2015 only third square platform stores were opened in Tmall.com Tmall.

On the contrary, GU Taiwan market has expanded rapidly to 7 stores and opened an independent e-commerce website. In autumn 2014, GU settled in Taiwan.

It also shows that the development of GU in mainland China does not seem to be as smooth as expected by the group.

In September 2016, when GU's first large shop in mainland China, the Zhongshan Park dragon dream store opened, G.U. Co., Ltd. CEO Osamu Yunoki Yunoki, and teak treatment also did not make specific plans for the future of the mainland market. It only indicated that it would focus on the establishment of more shops in the Shanghai area on the basis of stabilizing the business of dragon dream shop.

At present, all four stores in mainland China are located in Shanghai, but Osamu Yunoki teak said that they are waiting to see other cities, except for specific cities.

In the increasingly fierce competition among peers and the downturn in the market economy of Uniqlo and UNIQLO, Japan's Fast Retailing Co. Ltd. group has to face a slowdown. The expansion of GU is perhaps the most important strategy for the Japanese group.

As we all know, Ryui Masahito, founder of Uniqlo UNIQLO Tadashi Yanai, looks directly at Gap Inc. GAPP's chief executive Millard Mickey Drexler as its spiritual mentor, while GU founded by Millard Drexle is very similar to the Old Navy brand founded during the period of the GU group.

Although the Gap Inc. Cape group's performance decline has been fired in the late period, the old navy of Old Navy can be said to be the biggest legacy left by Millard Drexle for the Gap Inc. Cape group.

In the past five years of Gap Inc. Cape group's naming brand, only Old Navy Old Navy has been struggling to support it, and the old navy of Old Navy has already surpassed Gap to become the largest brand of the largest clothing group in the United States.

Uniqlo UNIQLO has pformed from a middle-aged sweater brand to a fast fashion brand. It is learning Gap cover Pu under the leadership of Millard Drexle. GU can undoubtedly be regarded as the old Old Navy brand of Fast Retailing Co. Ltd. fast marketing group.

In the two expansion of the Uniqlo market, UNIQLO, the United States may abandon the plan and concentrate more on GU, which is the real trick of the Fast Retailing Co. Ltd. XXX group to realize its world's largest fashion group.