Fast Retailing Eyes Global Expansion

Fast Retailing, home of the Uniqlo brand, wants to ramp up the presence of its other fashion label GU in the United States and Europe, as Asia’s largest apparel maker accelerates efforts to become a global retailer with $68 billion in annual sales.

"GU has the same potential as Uniqlo,” Chief Financial Officer Takeshi Okazaki said in an interview. "We can generate as many GU stores as there are Uniqlo ones.”

The brand, pronounced as the letters G and U, sounds similar to the word jiyū, or "freedom,” in Japanese. While GU, with slightly lower prices than Uniqlo and clothes aimed at younger clientele, has a solid presence in Japan, it’s less known in other major markets. Building its presence abroad is part of Fast Retailing founder Tadashi Yanai’s push to "become a true global player,” by first doubling annual profit to $34 billion within a few years.

That’s set to include about $4.7 billion from GU, Okazaki said. The brand has already made an initial foray into North America, opening its first pop-up store in New York City’s SoHo district in 2022.

Western competitors who are already well-established, such as H&M, Zara and Gap, also present an obstacle. Hennes & Mauritz already has more than 2,500 stores across the Nordics and Europe and more than 700 in North and South America through its various brands.

So far, efforts to expand outside Japan and Asia are paying off, with sales in the U.S. and Europe helping to deliver stronger-than-projected operating profit in the first fiscal quarter, which ended in November. Fast Retailing is planning on accelerating the openings of new Uniqlo stores to 20 in North America and 10 in Europe each year, according to its fiscal year-end report.

So far, the overseas push has delighted investors, with the shares outperforming 10 other clothing companies worldwide with a market value of more than $10 billion over the past year, according to compiled data.