Building Uniqlo's global empire

On a sunny Wednesday afternoon, there is nervous energy in the air moments before Mr Tadashi Yanai, founder of Japanese clothing chain Uniqlo and the richest man in Japan, arrives in the room.

His staff are hovering and four of them pop by, separately, to check compulsively that all is well - telltale signs that he is viewed with a mix of admiration and trepidation.

When he enters with a purposeful stride, Mr Yanai, though no taller than 1.65m, cuts an imposing figure with his strong personality and a gaze that skews between what seems like stern concentration and confident charisma.

He is in Singapore ahead of his newest launch, Uniqlo's South-east Asian flagship in Orchard Central, which opened to the public last Friday.

"I see Singapore as the epicentre of South-east Asia," he says when asked why the island was chosen as the location for the new flagship. "It has a critical location in the south-west gateway - one that allows us access to not only the ASEAN markets, but also the Middle East and, later, Africa."

For the founding chairman of Fast Retailing - the umbrella company that owns Uniqlo - it is apparent that nothing other than world domination will do.

The brand already operates more than 3,000 stores globally, including 837 stores in Japan, 472 in China and 394 in Asia - but for the 67-year-old, retirement seems nowhere on the horizon.

Instead, what is on his mind is making Fast Retailing the biggest apparel retailer in the world and toppling the current three companies above him - Spanish multinational Inditex which owns Zara, Swedish global giant H&M and American clothing and accessories retailer Gap.

The task does not seem implausible, given how the company he started in the mid-1980s to provide casual clothes for the everyman has become synonymous with technology-driven innovation and highquality basics.

Still, his announcement last year that he wants to hit five trillion yen (S$66.3 million) in revenue by 2020 - more than triple the 1.43 trillion yen it earned by May this year - seems very ambitious, even by his high standards.

Mr Yanai though, seems not to heed detractors.

"The three companies above us grew, thanks to the opening up of the European Union. But right now, it is Asia's time," he says.

"This is the era of the Pan Pacific region - not just Asia but also India, New Zealand, Australia and upwards to countries like Mexico, Chile and Argentina. These are the countries that are up and rising and we believe we are in the right place at the right time to achieve our long-term goals."

No surprises then that for now, despite less success in international markets such as America and Europe, Uniqlo's focus is determinedly on Asia, which Mr Yanai considers the engine of growth for the business.

Though he would not give definitive numerical targets for the region, he said he hoped to triple the South-east Asian contribution to the business from about 10 per cent now to about 30 per cent in the next five years.

Read also: 6 things to look out for at Singapore's first Uniqlo flagship store

And despite the faltering retail climate in Singapore, his belief in the potential of this region is what has driven his decision to launch the three-storey, 2,700 sq m flagship here.

"Singapore is more than just an independent market - I see it as a platform to showcase Asia," Mr Yanai muses, when asked whether he is concerned that the new store will impact sales at the other 24 stores that already operate here.

"The number of tourists Singapore receives is the same size as its own population, so I don't see any negative impact. Having our flagship here makes sense for us - to showcase not only the brand, but also the local community as a whole."

Uniqlo's flagship store in Singapore has stuck to that collaborative manifesto, with everything from the hoarding design to the store's video content, in-store music and curated spaces on the third floor all co-created with local production houses, brands and musicians.

Gunning for the tourist dollar, the Singapore flagship is also the first in South-east Asia to have a dedicated UT (Uniqlo T-shirt) corner - offering not only classic collaborations with the likes of the Star Wars franchise and musician Pharrell Williams, but also a Disney tie-up exclusively for Singapore featuring Mickey Mouse and the Merlion.

For Mr Yanai, however, the next step for Uniqlo is to go beyond just providing basic, affordable clothing to becoming a global preferred retailer - a lofty goal for the Waseda University graduate who started his fashion business out of Ube, a small mining town in Japan's Yamaguchi prefecture.

The self-confessed idealist says: "Back when I started, I moved away from my father's suit business and went into casual clothing because I saw opportunity there. I had a picture up on my wall from 1940s America, where everyone was in suits, and realised how times had changed. Casual was the future."

Today, though, the opportunity he sees for Uniqlo is in the "democracy of clothing" - what he refers to as the chance to provide quality clothing in premium fabrics such as cashmere, silk and linen to the mass market.

And the strength of its products shows, given the top 10 products for the brand are similar in almost every market it operates in - particularly its globally successful functional innerwear Heattech and AIRism, which are designed to help keep wearers warm and cool respectively.

In an industry where retailers are out to sell the cheapest goods at the highest margins, the father of two sons, one of whom works at Uniqlo as well, is content to march to the beat of his own drum - placing his priority on quality, not price.

He says of the company's direction: "We want to sell good-quality clothes to everyone, not just a small percentage of wealthy people. But to stay competitive, you need to have scale. My aim is to provide luxury for all."

It is evident then that for this self-confessed "dictator" boss, the journey has been quite unlike the conventionally cautious Japanese experience.

"My father warned me never to become a salaryman," he says with a laugh. "Salarymen never take risks. They need permission from their boss for everything, including going to the toilet."

Instead, it seems he has gone in the opposite direction - constantly thinking out of the box and being fearless even in the face of daunting failures.

His false starts include Uniqlo's first international move into London in 2002, with 16 of the 21 stores it opened closing within two years.

Still, the pragmatic man - whose autobiography is titled One Win, Nine Losses - shows no sign of regret.

"The 10 stores we have in Britain are now some of our fastest growing, so compared with back then, we are very successful there now," he quips with a wide-toothed smile.

And for the billionaire, the journey in the retail business continues to be one of learning.

No matter that he has been at it for nearly 44 years, his daily schedule has barely changed - starting at 7am every weekday and ending at 4pm so he can spend time with his wife and play golf.

He is also dismissive about the airs that come with his status as the richest man in Japan.

"In my case, 55 per cent of my wealth will be taken by the country when I die. So I consider my status as a billionaire an illusion," he says with a laugh.

On the business front though, Fast Retailing is soaring from strength to strength - now a multi-brand international company. Besides Uniqlo, it owns the fashion labels Theory, GU, PLST, Helmut Lang, J Brand, Comptoir des Cotonniers and the lingerie company Princesse tam.tam. And Mr Yanai is open to adding to his portfolio.

"Each of these brands teaches me something new, whether it is about different styles of clothing or varied cultural contexts," he says as our meeting comes to a close.

"I want to keep learning so I can make Uniqlo better.

"Many businessmen fear the unknown, but not me. I embrace it. It is going after the unknown that continues to make this business an exciting one to be in."

avarma@sph.com.sg

This article was first published on September 08, 2016.
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