QC Will Be The Next Gap?

Although Uniqlo UNIQLO is still the largest apparel retailer in Asia, Fast Retailing Co. Ltd. (9983.T) (6288.HK) fast marketing group is definitely a pillar brand. However, whether it is Japan, the largest overseas market, China and the high hopes of the United States market, Uniqlo Uniqlo has encountered different resistance. On the contrary, the smaller group and cheaper price GU brand has a good momentum of development. At Uniqlo Uniqlo GU will probably become a more important growth point for the Japanese retail giants if the expansion prospects are uncertain.

After successively settling in the mainland and Taiwan market, GU will enter two major stores in Hongkong, another important market in the Greater China region in spring next year. They will choose two department stores in Tongluowan Royal fort and beautiful China shopping mall in Tsim Sha Tsui. However, G.U. Co., Ltd. Osamu chief executive Osamu Yunoki teak said that there was no specific plan for opening third stores in Hongkong, nor did it specify the specific pricing of GU in Hongkong. He also pointed out that the brand of his helm will become another pillar of the group in the future. The target of 10 years is 100 million yen income, and the brand's income in the 2016 fiscal year ending August 2016 is 1878 yen billion yen, and the annual rise of 32.7% is the best performing brand of the group, and its operating profit has soared 34.8% to 22 billion 200 million yen.

In addition to the clear objectives of the 2 stores in Hongkong, Yuzuki Ji also said that in the next three years, GU will add 50 stores to the international market, while the Japanese domestic market will increase by 40-50 GU stores annually.

In the 2016 fiscal year, GU brand increased 31 stores to 350 throughout the year, including 11 stores outside Japan, all concentrated in Greater China, of which 4 were all located in Shanghai, and 7 were located in Taiwan market. The Japanese name is jee-you, the Chinese name is very excellent, and the GU with freedom will be Fast Retailing Co. Ltd. Fast Marketing Group The role of the future important growth point is also confirmed by Ryui Masa, the founder, chairman and CEO of Tadashi Yanai. At the end of last month, Ryui Masa, who fell to Japan's richest because of the poor performance of Uniqlo UNIQLO, said that the group plans to expand its cheap brand, and plans to open 1000 stores in the next 10 years, and the expansion of GU will still start in Asia, where Uniqlo UNIQLO has been successful and is among the "Asia first".

In the face of the global economic downturn, consumer spending in clothing categories and the fierce competition in the market, Uniqlo Uniqlo, which is difficult to play a role in the European and American markets, is currently relying mainly on the two major markets of Japan and the Great China to expand and grow. Among them, the Chinese market is the most important growth market for QQ and even the whole group.

However, the situation in the Chinese market is becoming more and more complicated. Uniqlo, Q, UNIQLO recorded a negative growth in the same store sales in the first quarter of 8-10 fiscal year in 2015, benefiting from the recovery in the second half of the fiscal year. The Uniqlo UNIQLO's annual revenue in China increased to 9.3% from 3328 to HK $100 billion in total revenue in the year of 2016. If we take the new store's contribution aside and focus on the most important indicator of retail sales, we will see that the sales of the same store in the 2016 fiscal year of No Agency, which is only 1%, is much lower than that of competitors' H&M, Zara and a slightly higher brand performance in China through the brand MUJI and Muji. In the first half of August 31, 2016, the sales increased by 30.1% to 26 billion 432 million yen in the Chinese market in the first half of fiscal year, compared with the growth rate of 5.1%.

Fast Retailing Co. Ltd. fast marketing group has not disclosed the same store sales situation in mainland China.

As we all know, Ryui Masahito, founder of Uniqlo UNIQLO, looks directly at the CEO of Millard Inc. Drexler, who is the chief executive of the Gap Inc. Cape group, and is the spiritual mentor of GU. 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 transformed 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 no doubt be regarded as the old Old Navy brand of Fast Retailing Co. Ltd. fast marketing group.

As group Gap Inc. Cape group The significance of the first big brand, the old navy of Old Navy, is self-evident. At the beginning of this month, the Gap Inc. Cape group released its sales data in September. Due to the obvious improvement of the Old Navy brand of Old Navy, the share price of Gap Inc. (NYSE:GPS) soared up to 17.1% at the beginning of October 7th September.

Ryui Masa previously called Fast Retailing Co. Ltd. XXX group's sales target of 500 billion US dollars in 2020. If there is no major merger, it will not be one of Ryui Masa's many "fantasies". As he has shouted out, the US market will sell for 20 billion US dollars in 2020.

In the 2016 fiscal year, the Fast Retailing Co. Ltd. group sold 1 trillion and 786 billion 473 million yen, or about 17 billion 100 million dollars.

In the 2016 group growth of 6%, even if the rate of growth can be maintained in the next four years, the Fast Retailing Co. Ltd. group will earn about 22550 billion yuan in 2020, and the company has reported in the 2016 fiscal year that the group's revenue growth in the current 2017 fiscal year will further slow down to 3.6%.

According to the current growth rate of GU, the expansion target and the income target of 1 trillion yen, the Fast Retailing Co. Ltd. XXX group's future brand structure may be exactly the same as that of the Gap Inc. group. GU will catch up with Uniqlo UNIQLO step by step and become the largest brand in Japan.

But the Old Navy, which was born in 1994 and the global economic pattern experienced by GU in 2008, is just the opposite, and the consumption environment is also quite different. Therefore, GU needs to face more difficulties when it replicating the brilliance of Old Navy. However, like Old Navy, cheap is still one of the signs of successful retail brand in any era.

In addition, Old Navy ranks among the first brands of Gap Inc. cover group, and it does not depend on the recession of Gap. So will similar things happen in the Fast Retailing Co. Ltd. fast marketing group? Can Uniqlo UNIQLO not only support the Japanese group's goal of achieving US $50 billion in 2020, but on the contrary, in 2020, there will be a full-scale recession of the Uniqlo and UNIQLO, which is obviously not a small probability event.