As president of Japanese company Fast Retailing, the parent company of Uniqlo, Tadashi Yanai is the richest man in Japan. After record sales in 2008, he is taking his low-cost chain to Paris and Singapore and hunting for big game in the US.
Tadashi Yanai is the founder of the casual clothing chain Uniqlo, chairman of its parent company Fast Retailing and the richest man in Japan, with an estimated net worth of €4.8bn. Yanai opened the first Uniqlo store in Hiroshima in 1984; today Uniqlo has 765 stores around the world. Its emphasis on high-quality, low-cost basics, combined with strong advertising, has struck a chord with consumers and the company posted record sales in 2008.
Since its first overseas opening in London in 2001, Uniqlo has upped the pace of expansion, opening more London stores, a flagship in New York and, later this year, in Paris. A move into China, South Korea and Hong Kong is well underway and the first store in Southeast Asia will open in Singapore this month. Fast Retailing has also bought up several retailers, including French fashion company Comptoir des Cotonniers. Rumours continue to swirl about the company’s next big purchase.
Monocle: How is Uniqlo doing so well in spite of the bad economic climate?
Tadashi Yanai: The newspapers are reporting that Japan’s economy has contracted by 12.7 per cent, but in the midst of the bad times our company is doing well. We’re just going about our normal business, doing what we have to do as a company, whether it’s in Japan or London. We follow this principle all over the world.
M: Do you have different products and strategies for different markets?
TY: No, we have a policy of global merchandising and global marketing. We call it “Global One”. The shops on Oxford Street in London, Fifth Avenue in Manhattan and Ginza in Tokyo are basically the same. Rather than trying to be like a British company when we open in London, I think it’s better for us to operate as we would in Japan and bring our own way of doing things. We first went to London in 2001, but it’s only in the last year that we’ve seen that this [global] strategy is the right direction.
M: Do Japanese brands have an extra appeal for consumers?
TY: Being Japanese isn’t enough in itself – making good products is more important. Japanese cars and electrical goods are rated highly in the world because they’re good, not just because they’re Japanese. They’re well-made and long-lasting. It’s rooted in certain Japanese qualities – seriousness, cleanliness, an enjoyment in providing service and politeness.
M: Is Japan still the heart of the company?
TY: Yes, without a heart and soul, a brand cannot be understood. We try to incorporate Japanese attention to detail into our products. Japan used to be the strongest exporter of textiles until 30 or 40 years ago and it is still the best in terms of textile technology. So, we use Japanese technology combined with China’s huge production power and Chinese machinery.
In Europe, people have a misapprehension about production in China – they imagine it involves bad working conditions. But in our factories, there are 20,000 to 30,000 workers and the best machinery available. We believe we can make the best products in the world there. Companies of our size normally have about 1,000 factories. We only deal with about 100 factories [60 in China] and work closely with them.
M: The denim that you’ve launched at the new Uniqlo concession in Selfridges in London is making a virtue of jeans “made in Japan”. Is that a new direction for Uniqlo or are you still making jeans in China?
TY: We do both. Our denim fabrics are made in Japan by Kaihara, probably the best mill in the world, and some of the sewing is done in China. These new products that we are selling in the UK and Japan are made entirely in Japan. We did it because the jeans processing technique in Japan is still the best in the world.
M: Does this mean you’ll be expanding jeans production in Japan?
TY: Unfortunately, the structure of industry has changed in Japan. There isn’t the capacity to do all the sewing we need.
M: As you expand globally, will you be regionalising production?
TY: I don’t think it’s efficient to produce things in the Caribbean or Mexico just because you are in the US. If we are doing business in Europe, apart from China, I think Bangladesh will be the best place to make our products.
M: Part of the rapid growth of Fast Retailing has been achieved by buying other companies – what are your criteria for buy-outs?
TY: The focal point is Uniqlo and making it a global business. From there, we’ve bought Theory, Comptoir des Cotonniers and [underwear company] Princesse tam.tam. We are based in Japan and Asia, Theory is based in the US, and Comptoir des Cotonniers and Princesse tam.tam are both in France. So although they have different price ranges from us, if we all cooperate together, each brand can develop globally. We would like to buy other companies, but they have to have the potential for global development.
M: What’s the strategy in the US – will you open Uniqlo flagship stores like the one in New York in other big cities such as Chicago and LA and expand from there?
TY: We could, but the US is so big that there is no use in putting one store here and another there. So it comes back to the M&A story again. We want to purchase a company about the same size as us and use it as a platform to bring Uniqlo to all parts of the US.
M: Which region do you view as a good market for the future?
TY: For us it’s Asia. We are focusing on countries such as China and South Korea and we are opening our first store in Singapore this spring. However, in order for us to become a global brand, we have to have a presence in Europe and the US.
M: Which retailers do you admire?
TY: I think Wal-Mart is one of the best retailers in the world. It is bashed by the media, but Wal-Mart is part of the infrastructure and people can’t live without it. I like its “customer first” style. That’s why it grew so much and is still growing. I used to like Home Depot too.
M: Which small retailers do you admire?
TY: I like the Porter bags I see in this magazine. I wish there was an equivalent of Porter in clothing. I haven’t found it yet.
M: Do you have any advice for struggling retailers?
TY: I might look successful but I’ve had many failures. People take failure too seriously. You have to be positive and believe you will find success next time.
1949: Born in Yamaguchi, Japan
1971: Graduates from Waseda University, Tokyo with a BA in political science and economics
1972: Joins the family firm Ogori Shoji Co in Yamaguchi
1973: Appointed senior managing director
1984: Becomes president and CEO. Opens first Uniqlo (Unique Clothing Warehouse) store in Hiroshima
1991: Changes the company name to Fast Retailing Co Ltd
2001: Opens first overseas store, in London
2002: Steps down as president and becomes chairman and CEO
2005: Reassumes role of president, chairman and CEO