Among the world’s biggest fast fashion retail brands like Zara, H&M, Gap and Forever21, there is a Japanese casual fashion wear contender, Uniqlo. Ask anyone on the planet about Uniqlo; most will respond with three aspects: quality, affordability and style, and that is the extent of Uniqlo’s success. Uniqlo’s store size, product range, presentation, quality and style of clothing at shockingly lower prices are thanks to Tadashi Yanai’s strategy, the brand’s founder who managed to pull it all off. The Japanese billionaire has also strongly established the brand’s name alongside sustainability in fashion and giving back to society through various initiatives. There is still more of that enthusiasm left in the Japanese billionaire who is leading Uniqlo to be the world’s largest fashion retailer.
Currently, Fast Retailing—the holding company that operates Uniqlo and eight other brands from Tadashi's father’s tailoring business delivered an operating profit of $2.54 billion for the year. Its share price soared by 31 percent this year which propelled Tadashi’s personal wealth to $ 36 billion this year.
Tadashi’s goal of making Uniqlo surpass global brands would mean tripling revenue to 10 trillion yen ($67 billion). This could be a cakewalk, considering Uniqlo's sustained global expansion and the advent of the Asian period. Besides, it is already on competitive grounds with these brands by managing to maintain an incredible growth rate.
To the Helping His Father in the Store Days
When the time was right, Tadashi's father handed over the reins of his network of 22 men's tailor shops, Ogori Shoji, in 1972 to young Tadashi. It wasn’t long before Tadashi became the president of the firm; he launched Unique Clothing Warehouse, a new store in Hiroshima that was eventually changed to Uniqlo. After looking at casual apparel chains like Benetton and Gap from his Europe and the US trip, Tadashi saw great potential for Japan's casual wear market. Thereon, he embarked on transforming the family's business strategy from suiting to casual clothing and to purchasing fashion products in bulk at a reduced cost.
Uplifted People’s Hesitancy to Buy from a Low-Priced Brand
One of the biggest hurdles Tadashi had to overcome was changing the views of customers who thought it was a cheap, low-quality clothing store meant only for the economically backward. To change that, Tadashi introduced the Global Quality Declaration in 2004, which stopped producing cheap, low-quality clothing. Since then, Uniqlo has never failed to grab the interest of customers with its premium fleece jackets. The perception of the brand immediately changed from being low-cost and low-quality to being reasonably priced and high-quality.
Tadashi's aim is to make Uniqlo the biggest mass apparel retailer globally, primarily through growth in the United States, China, and online. One can say that it is getting there as it has already achieved market share from the world's largest apparel retailer, H&M, whose 2019 sales were $24.3 billion. If successful, Uniqlo could overtake Inditex, the parent company of Zara, as the industry leader in clothing worldwide.
The Leader Behind His Team
Right from the very start, Tadashi’s core principles remain the same, which include hands-on leadership, employee empowerment, and doing good for the environment and people, even during low sales.
His leadership is famously known for the combination of purpose and profit and was recognized by the Time magazine's list of the 100 most important people in the world (2013) and Forbes' list of the 100 best entrepreneurial brains (2017).
Sustainability in Fashion
For four decades, Tadashi has been a prominent supporter of the slow fashion movement, creating timeless, durable designs. In addition to establishing the brand’s environmental policy the following year and launching an all-product recycling campaign in 2006, he created a technology that can cut the quantity of water needed in the jeans finishing process by up to 99 percent in Fast Retailing.
In giving back to society, Tadashi ensures that a percentage of the company's profits goes to individuals who are facing hardships. Additionally, Uniqlo collaborates with the UNHC for Refugees to provide millions of clothing items to refugees throughout the world.
Innovation in Fashion
One of the major innovations Tadashi brought to Uniqlo is the HeatTech, a fabric created in collaboration with the Japanese chemical company Toray Industries. This machine converts moisture into heat and has air spaces to trap and hold that heat. Thanks to the thin, convenient HeatTech fabric, the brand has been able to produce fashionable designs that stand out from the typical traditional woolen apparel market. With new fiber technology, HeatTech innovation is evolving over time, enabling the brand to create a variety of thermal clothing collections. While HeatTech sold 1.5 million units in 2003, nearly 130 million units spanning 250 goods were sold in 2012.
In addition to HeatTech, Tadashi also brought in innovations such as UV Cut (a material that blocks 90 percent of UV rays from reaching the wearer), LifeWear (a combination of casual and sportswear), and AIRism (a soft fabric with quick-drying inner fabric). The fact that these new textiles are all branded and protected by copyright makes it difficult for rivals to try and emulate this point of differentiation. According to Tadashi, who has been quoted, Apple is its main rival because of the latter's ambition to become the world's most inventive business.
Better Fail than Fade
With more than 3,500 Fast Retailing locations worldwide, including Uniqlo flagships in New York City's Fifth Avenue, Milan's Piazza Cordusio, and London's Covent Garden, Yanai turned his family's modest clothes business into a global phenomenon. Yet, it hasn’t been all smooth sailing for Uniqlo. Over the years, the brand saw drops in sales and had to close 16 of its 21 UK locations within two years of opening in 2001. The first three Uniqlo stores in the US debuted in New Jersey in 2005 but had to shut down the following year. Still, he continued to strive and change.
The reason is that Tadashi always believes it is better to fail than fade. Like many leaders, Tadashi also carries many learnings from past misfortunes. For instance, he still carries the memories of his time in Ube, which was a coal mining boomtown, until the pits closed and employment was relocated due to the energy shift. All the stores that catered to them closed as well. The lesson he learned at the time was that business plans have an expiration date and those that don't change will eventually die.
With its remarkable corporate culture, fearless and conservative leadership, and proven steady financial development over the previous 15 years, Tadashi Yanai is already pacing towards making Uniqlo, a Japanese fast-fashion retailer, achieve worldwide success.