Fast Retailing Co LTD in Apparel and Footwear (World)

FAST RETAILING CO LTD IN APPAREL AND
FOOTWEAR (WORLD)
April 2015
SCOPE OF THE REPORT
Scope
All values expressed in this report are in US dollar terms, using a fixed
exchange rate (2014).
All forecast data are expressed in constant terms; inflationary effects are
discounted. Conversely, all historical data are expressed in current terms;
inflationary effects are taken into account.
Womenswear
US$662.1 billion
Menswear
US$439.9 billion
Footwear
US$360.9 billion
Apparel and Footwear

US$1,749.5 billion
Sportswear
US$269.2 billion
Childrenswear
US$160.0 billion
Apparel Accessories
US$71.3 billion
Hosiery
US$55.3 billion
Euromonitor International
APPAREL AND FOOTWEAR: FAST RETAILING CO LTD
Disclaimer
Much of the information in this
briefing is of a statistical nature and,
while every attempt has been made
to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
may not sum. Analyses found in the
briefings may not totally reflect the
companies opinions, reader
discretion is advised.
Fast Retailing Co Ltd is a

multibrand operator based in
Japan. It has ambitions to be the
leading global apparel retailer by
2020, and is rolling out new
stores at pace, both in Japan,
where its affordability chimes
with emerging trends for thrift,
and internationally, where the
high quality, low prices and
comparatively narrow offer are
proving popular. FRC is doing
especially well in China,
however, it needs to pick up the
pace of international expansion
if it aims to catch Inditex and
H&M.
PASSPORT 2
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORY
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
Key company facts

Japan-based Fast Retailing ranked eighth in the global apparel and
footwear market in 2014, with a share of 0.7%, up from 0.5% in 2009.
Although the company is expanding its global retail network at
speed, its focus remains comparatively narrow - 92% of 2014 sales
were generated in Asia Pacific, and 83% of total sales were
generated by its flagship brand Uniqlo. It also operates Japanese
brand GU and international brands Theory, Comptoir des Cotonniers,
Princesse tam.tam and J Brand.
Japan remains central to its operations, despite market maturity.
66% of total 2014 sales were generated in its domestic market,
where its strong value position has benefited from a growing trend for
price consciousness.
The company saw value sales improve by a CAGR of 14% over
2009-2014. Growth was driven by its offer, which consists of
relatively low-priced fast fashion using high-quality fabrics. The
success of this has underpinned rapid store expansion and
expansion into new markets. According to the company, its store
count (including franchises) was 2,753 in FY 2014, compared to
2,449 in FY 2013, a 12% leap in numbers, and it aims to reach 3,015
by the end of FY 2015. In 2014, it opened new stores in Germany
and Australia, will launch in Belgium in 2015 and Canada in 2016 and
aims to become the world's leading apparel retailer by 2020, via its
flagship brand Uniqlo, as well as select acquisitions.
Fast Retailing Co Ltd

Headquarters: Yamaguchi, Japan
Regional
involvement:
Australasia, Asia
Pacific, Western
Europe, North
America
Category
involvement:
Apparel
accessories,
childrenswear,
menswear,
womenswear,
hosiery
Global
apparel and
footwear
value share
2014:
0.7%
Global
apparel and
footwear
value growth:
18.4% (20132014)
13.8% CAGR
(2009-2014)
PASSPORT 4
Financial analysis
Fast Retailing Co Ltd: Net Revenue vs

Net Profit ( billion) 2009-2014
1,600
100
90
1,400
80
1,200
1,000
60
800
50
40
600
Net profit ( billion)
70
Net revenue ( billion)
Fast Retailing Co Ltd (FRC) reported exponential

growth in net revenues of 21% for the fiscal year
(FY) ending 31 August 2014, to 1,383 billion.
Growth was driven by strong demand for the
Uniqlo brands core items, including HEATTECH,
Ultra Light Down, AIRism, sweatshirts and
sweatpants and jeans, but the addition of 187 new
stores also helped fuel growth.
FRCs development in Greater China was
particularly eye-catching. Uniqlo sales hit 208
billion, an increase of 67%. Unsurprisingly, the
region is a key investment target, and FRC aims to
open 100 stores a year until it reaches 1,000
stores, with 3,000 stores the medium-term target.
Other international markets also performed well for
FRC, and it expects international sales to outgrow
Japan by the end of 2016. The US and Western
Europe, where affordable fast fashion thrives, are
targets.
Other parts of the portfolio also did well, with sales
at GU up by 29%, and Theory and Comptoir des
Cotonniers also adding value. J Brand, however,
continued to struggle.
30
400
20
200
10
0
2009
2010
2011
2012
Net Revenue
2013
2014
Net Profit
Source Fast Retailing Co Ltd 2014 Annual Report
PASSPORT 5
Latest financial data

Q1 2015: Three Months to November 2015
Net sales ( billion):
480
% y-o-y growth:
23.3
Store numbers:
2,866
% y-o-y growth:
12.0
Fast Retailing Co Ltd: Net Sales & Net

Profit Q1 2014/2015
80
70
500
60
400
50
300
40
30
200
20
100
10
Q1 2014
Net Revenues
Q1 2015
Net Profit
Net profit ( billion)
Net sales (( billion)
600
FRC continued to enjoy strong growth in the first

quarter of FY 2015, with sales growth of 23% to
reach 480 billion. Investment in new stores as well
as remodelling existing ones helped this. In Japan,
for example, Uniqlo saw a 7.5% rise in same store
sales, helped by a strategy of gradually increasing
the size of sales floors, by replacing smaller, less
efficient stores with large-scale outlets.
However, FRCs international business was the key
growth driver. Uniqlo International reported higher
than forecast gains in sales and profit, with sales of
168 billion (up 47.3% year on year) and operating
profit of 24.3 billion (up 57.2%). The division also
outstripped targets in local currency terms, with
Uniqlo Greater China and South Korea generating
especially strong growth.
Other brands performed more erratically. The lowprice GU label saw double-digit growth in sales and
profit, and the company added net new 24 stores in
the first quarter, boosting the total GU network to 300
stores. However, Theory, Comptoir des Cotonniers,
Princesse tam.tam and J Brand were less dynamic.
Source: Fast Retailing Co Ltd
PASSPORT 6
Uniqlo picks up pace of openings
Fast Retailing Co Ltd:

Market entry by year
2000-2001
2002-2005
2006-2010
2011-2014
Japan, highlighted in gold, saw the first Uniqlo store in 1984, although an earlier
iteration was opened in 1949. Following the opening of its London store in 2001,
FRC has accelerated its push into new markets, with Canada set for 2016. More
large markets in Western Europe are also mooted for entry.
PASSPORT 7
SWOT: Fast Retailing Co Ltd

STRENGTHS
WEAKNESSES
Uniqlo
Asian roots
FRCs core brand
The company is based
Uniqlo brings affordable, in Asia Pacific, which is
on-trend products to
set to see some of the
market using good
most dynamic growth
quality fabrics. The
over the forecast period.
success of the offer is
It has a solid presence
underpinning the
in China, the most
companys expansion
important of these
programme.
markets.
Japan
In 2014, 66% of FRCs
total sales were
generated in Japan.
Although the company is
prospering here, and is
also reducing its
dependence, growth
prospects are weak for
the total market.
OPPORTUNITIES
THREATS
China and the US

Sportswear advantage
FRC is looking at these Uniqlos use of tech-led,
two markets as their key innovative fabrics could
priorities. The fast
offer a competitive edge
fashion model is
in sportswear. Peers
underdeveloped in both, such as H&M are
and more retail
upping their offer of
expansion could deliver
these products, which
exponential sales
are forecast strong
growth.
growth in the US in
particular.
Fast fashion reputation

Competitors in Asia Pacific
Fast fashion has
China is by a distance
suffered from a number
the most attractive
of ethics issues - FRC
market for international
itself was compelled to
brand operators, and
cut worker hours at
giants such as Inditex
suppliers in China in
are upping their
2015 after media
investment to buy share.
investigation. This could FRCs strength there
hurt the brands.
may be threatened by
this.
Smaller brands
Of the companys five
brands, only Uniqlo and
GU can be described as
flourishing. The inability
of FRC to succeed with
US denim label J Brand
in particular may harm
plans for expansion in
that market.
PASSPORT 8
Strategic objectives and challenges

More store expansion
The other brands
FRCs key strategic objective is to increase store

numbers. It aims to add at least 200 Uniqlo stores
by the end of FY 2015. Most of these openings will
be in Greater China, although South Korea and the
US will also see solid expansion. Part of this
expansion will be the opening of flagship stores
that will boost brand visibility. GU is also set to see
expansion with 50 store openings planned for
Japan annually.
Uniqlo is the backbone of FRCs business, and the

low-price GU brand is set to see sustained
investment in Japan and launch in Western Europe
and the US. However, its other brands are
struggling, and could benefit from greater attention.
The company is aiming to increase label synergies,
but maintaining the multibrand approach may be a
challenge.
Improving online offer
New product categories
New physical stores are a priority, but e-commerce

is growing in importance for the market, especially
in China where FRC is investing heavily. The
companys digital business is limited, however, and
it appears reluctant to commit to the channel.
Physical stores offer heightened brand control and
allow the company stronger marketing
opportunities, but it may need to rethink this
position to remain competitive.
In 2014, key competitor H&M launched its Sports

range. This is a category that could do well for FRC
and Uniqlo, as there is high demand for activewear
(ie softer, less performance-aligned sportswear),
especially in the US where FRC aims to grow
share. Womens sports brands such as Lululemon
enjoyed exponential growth in the US through
2014, and Uniqlos use of top-end fabrics could
give it a competitive edge in these products.
PASSPORT 9
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
FRC positioned well ahead of global trends

FRCs rapid international expansion and strong consumer demand for its offering helped it outperform the
global market over the review period. The company has even achieved strong growth in Japan thanks to
rising consumer price sensitivity.
Fast Retailing Co Ltd: Competitive Performance by Value vs Global Apparel and
Footwear Market 2009-2014
Y-on-y growth
20%
15%
10%
5%
0%
2009-2010
2010-2011
2011-2012
Fast Retailing Co Ltd
2012-2013
2013-2014
Global Average
A: Overexposure to Japan, where
B: Recovery in Japan,
C: The company adds 100 new
overall weak market performance is

exacerbated by the March 2011
earthquake, sees FRCs growth dip
to match the global market.
However, slowdown in its lead
market is offset by ongoing retail
expansion for Uniqlo in Asia Pacific.
market entry into Thailand

and the Philippines, as well
as the acquisition of J Brand
help drive sales, but the key
factor driving 2012 growth is
the opening of an additional
70 outlets in China.
outlets in China, roughly a third of

its total openings for the year.
International sales are driving
strong growth, although
consumer demand for the
companys offer continues to
underpin growth.
PASSPORT 11
International expansion will drive share for FRC
5-year
trend
2010
2011
2012
2013
2014
Apparel and Footwear: Top 10 Global Companies by

Value Share and Ranking 2010-2014
2014
%
share
Nike Inc
2.5
adidas Group
1.7
Inditex, Industria
de Diseo Textil
SA
1.2
H&M Hennes &

Mauritz AB
1.2
Gap Inc, The
0.9
VF Corp
0.9
PVH Corp
10 7
0.8
Fast Retailing Co
Ltd
0.7
C&A Mode AG
0.6
Hanesbrands Inc
11 12 12 11 10
0.5
Company
Ranking and share in the global apparel and

footwear market were static in 2014, with
sportswear giants Nike and adidas maintaining
leadership with strong footwear sales, product
development and very solid brand support.
The scale of the market means that rapid share
gain is typically driven by acquisition. In 2010,
PVH Corp acquired Tommy Hilfiger, and saw
rapid market gains, and again in 2012, after the
acquisition of Warnaco.
FRC maintained its eighth ranking across the
period, although it actually grew share marginally.
This underlines the growing concentration of the
global market by high visibility brand operators.
The company was able to do this, despite

generating most of its sales in a single region,
Asia Pacific. It therefore has significant room to
grow internationally, and is pushing into North
America and Western Europe. In the long term, it
may be better positioned for growth than its
peers. FRC aims to become the leading global
apparel and footwear retailer by 2020.
PASSPORT 12
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
MARKET ASSESSMENT
Womenswear main growth engine for FRC going forward

55% of FRCs 2014 sales were generated by womenswear, up from 50% in 2009. It is the largest part of
the global market, and is therefore a key development target - it is set to generate 30% of total absolute
value growth through 2019, and the scale alone offers opportunity. Growing levels of disposable income will
support growth over the forecast period, especially in FRCs key target market, China.
Womenswear is led by fast fashion specialists Inditex and H&M, who track fashion trends more actively
than FRC - Uniqlo's focus is on basics. However, it has been improving the fashion credibility of its
womenswear offer, for example collaborating with fashion designer Ines de la Fressange in 2014, and
introducing premium fabrics such as cashmere and silk into its mix.
Other smaller categories also hold potential. Sportswear, in which it held a negligible share in 2014, is set
to be a dynamic area of the market through 2019. Peers including H&M are pushing into sports-inspired
apparel, and Fast Retailings advanced fabric innovation could give it a strong competitive advantage here.
Fast Retailing Co Ltd: Apparel and Footwear Presence 2014 and Growth Prospects
2014-2019 by Category
CAGR 2014-2019
4%
Childrenswear
Apparel
accessories
3%
Menswear
Womenswear
2%
1%
Hosiery
0%
-
100
200
300
400
Market size 2014 (US$ billion)
500
600
700
Note: Bubble size shows company share of category in 2014, range displayed: 0.2-1.1%
PASSPORT 14
MARKET ASSESSMENT
FRC should look at new markets if serious about ambition

FRC holds visible share in just one of the 10 apparel and footwear markets forecast to see strongest
growth in absolute terms through 2019, although it is investing heavily in the US, will enter Canada in 2016
and is looking at India. However, it holds greater market share than either H&M or Inditex in China, the
market that matters most. China is forecast a CAGR of 7% through 2019 compared to 1% for the US;
nonetheless, both are primary development targets for the company.
This is a very solid position to be in; however, if FRC is serious about its plan to be the leading apparel and
footwear retailer by 2020, it needs to broaden its global footprint. H&M and Inditex, with whom FRC is in
direct competition, have wider global footprints and are meeting demand for fast fashion while it lasts.
The company has already indicated that it is looking at key markets in Western Europe, where
consumption levels are high, the economy is showing good signs of recovery and the retail/regulatory
environment is straightforward. Saudi Arabia and the United Arab Emirates are becoming retail hubs for
many travellers, and would be obvious and easy targets for FRC.
US$ billion
100
7%
6%
5%
4%
3%
2%
1%
0%
80
60
40
20
0
China
India
US
Mexico
Absolute Value Growth (US$ billion) 2014/2019
UAE
Saudi Arabia Argentina
% CAGR 2014-2019
Spain
Canada
CAGR 2014-2019 &

company share 2014
Fast Retailing Co Ltd in Global Apparel and Footwear: Share in 10 Largest Forecast
Absolute Value Growth Markets and Forecast CAGR 2014-2019
Turkey
Fast Retailing Co Ltd % Company Share 2014
PASSPORT 15
MARKET ASSESSMENT
FRC has solid base to push into new regions

Despite FRCs aggressive store expansion strategy, its visible global presence in 2014 was limited to Asia
Pacific and Western Europe. The latter is forecast zero growth through 2019, although FRC perceives solid
opportunity within the region, opening in Germany in 2014, and planning for Belgium in 2015.
The company also opened in Australia in 2014, and with the rate of store expansion planned for North
America (including Canadian market entry in 2016), it should begin to see wider share visibility. However,
this is still a narrow footprint for an ambitious company. Fortunately, it is secure in Asia Pacific.
This region offers most opportunity, and FRC is set to open more stores in established markets in FY 2015,
including 100 in Greater China, 30 in South Korea and 45 in Southeast Asia and Oceania. China alone is
set to generate 48% of absolute value growth in apparel and footwear through 2019. Although the market is
becoming more crowded, it is evolving rapidly and still offers massive opportunity.
Fast Retailing Co Ltd: Apparel and Footwear Presence 2014 and Growth Prospects
2014-2019 by Region
CAGR 2014-2019
6%
5%
Asia Pacific
4%
3%
2%
1%
Western Europe
0%
-1%
0
100
200
300
400
500
600
700
Market size 2014 (US$ billion)

Note: Bubble size shows company share of region of 2014, range displayed: 0.1-2.0%
PASSPORT 16
MARKET ASSESSMENT
Weak global presence needs addressing
PASSPORT 17
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
Japan not so weak, but international development still key
Fast Retailing Co Limited: New Store

Openings, Japan vs Rest of World
2009-2014
300
250
Net new store numbers
Japan remains FRCs principal market, generating

66% of 2014 values. In theory, this is a problem the Japanese apparel and footwear market is
forecast zero growth through 2019. However,
FRCs value offer, strengthened by its commitment
to the low-price GU label, is proving resilient with
same-store sales growth at Uniqlo Japan of 2% in
FY 2014, and the company continues to open new
stores. Per capita spend on apparel and footwear
in 2014 was US$651, compared to US$239 in
China, its main development market.
Despite this solid domestic performance, there are
far more dynamic markets elsewhere. International
expansion is logical, and is a plank of geographic
strategy. Between 2009 and 2014, FRC added 568
international stores to its network compared to 223
in Japan.
Asia Pacific is the primary goal, but other
international markets are also targets. The
company is looking to expand its lower-priced
fashion brand GU to Europe and the US, where it
already has Uniqlo stores, following openings in
Hong Kong and South Korea in 2014, and opened
Uniqlo in Australia and Germany in 2014.
200
150
100
50
-50
-100
-150
2009-2010
2010-2011 2011-2012
Japan
2012-2013 2013-2014
Rest of World
PASSPORT 19
Asia Pacific dynamism key opportunity

Asia Pacific generated 90% of FRCs total absolute value growth between 2009 and 2014, and remains it
primary development focus. This is because of the scale and dynamism of the region - it is the worlds
largest regional market and is set to generate 69% of total global value sales through 2019.
Per capita disposable incomes are set to see a CAGR of 7% in Asia Pacific, compared to less than 1% in
Western Europe. This will help drive growth for FRC in the region. At the same time, regional markets
remain price sensitive, and Uniqlos comparative value for money will also help - in Japan, for example,
where market development over the review period was almost flat, the company achieved a CAGR of 8%
between 2009 and 2014 thanks to growing value demand from consumers.
China, however, holds the greatest opportunity, thanks to its scale and forecast absolute value growth,
which dwarf the rest of the region. It was FRCs second largest market in terms of outlet numbers in 2014,
and will see ongoing investment over the forecast period.
100,000
8%
7%
6%
5%
4%
3%
2%
1%
0%
80,000
60,000
40,000
20,000
0
China
India
Hong Kong, Indonesia

China
Absolute Value Growth (US$ million) 2014/2019
Thailand
Malaysia
% CAGR 2014-2019
Philippines South Korea Vietnam
CAGR 2014-2019 &

company share 2014
Absolute value growth (

US$ million) 2014/2019
Asia Pacific: Forecast 10 Strongest Absolute Value Growth Markets 2014/2019, %

CAGR 2014-2018 and Fast Retailing Co Ltd Company Share 2014
Taiwan
Fast Retailing Co Ltd % Company Share 2014
PASSPORT 20
Japan sales model change to drive growth
Outlet numbers
Average store size (sq m)
FRC led the Japanese apparel and footwear market in 2014 with a 10% share, up from 7% in 2009. Longterm economic stagnation in Japan and lower disposable incomes among the young have led to structural
(as opposed to cyclical) demand for thrift among consumers. Uniqlo, and its lower-priced sister brand GU,
have profited from this.
Despite this apparent obstacle to value development, the market retains potential, with a sophisticated
consumer base that responds well to retail innovation. A major part of its strategy has been to revamp its
distribution and launch innovative retail formats.
Uniqlo still remains relatively underpenetrated in major cities, as its roots are in smaller suburban stores.
This is in contrast to its large international stores, which are in prime locations, and it is now emulating this
strategy in Japan. In 2014, it opened global hotspot stores in Ikebukuro and Okachimachi, two thriving
Tokyo commercial districts on a par with Shinjuku.
Fast Retailing Co Ltd: Average Store Size
These very large stores are on a par with the
and Outlet Numbers in Japan 2009-2014
companys scrap and build strategy for Japan
750
1,800
of replacing standard 800 sq m stores with
1,600
700
large-scale stores of 1,600 sq m or more. In
1,400
650
1,200
part, this allows a fuller range of product,
600
1,000
although Uniqlo stores typically offer a limited
800
550
range of products in a massive selection of
600
500
colours. More important is the heightened
400
visibility of the brand via these urban flagship
450
200
stores and the enhanced consumer experience.
400
0
2009
2010
2011
2012
2013
2014
FRC believes this has driven growth, and will
Average Store Selling Space (sq m)
Outlets
seek opportunities to develop more sites.
PASSPORT 21
Identifying opportunity difficult in slow Japanese market
Fast Retailing Co Ltd: Japan, Apparel

and Footwear Presence 2014 and
Growth Prospects 2014-2019 by
Category
2%
Hosiery
CAGR 2014-2019
FRC has very strong positions in Japan, leading

the key menswear and womenswear markets with
15% shares in 2014. These categories, however,
are forecast zero growth through 2019, as
consumer confidence remains weak.
This has driven the companys focus on shaking
up its retail offer with store enlargement, as well as
finding ways to improve its value proposition. The
latter is underpinning its proposed expansion of the
low-price GU label by 50 stores a year in Japan.
The company also has a surprisingly narrow range
of product on offer. In 2014, 56% of values were
generated by womenswear and 38% by menswear,
with childrenswear, accessories and hosiery
making up the rest of the offer. It exited footwear in
2011, and has no sportswear offer.
Both of these categories use comparatively high
levels of technological innovation, and would
appear to be a solid fit for FRC, with its reputation
for tech-led fabric use. In the global market they
are set to see strong growth, especially in FRCs
target US market. Widening its range could help
with market-specific strategies as it grows.
1%
Menswear
Womenswear
0%
Childrenswear
-1%
Apparel accessories
-2%
-
10,000
20,000
30,000
Market size 2014 (US$ million)
40,000
Note: Bubble size shows company share of category in 2014, range

displayed: 1.4-15.2%
However, the company remains focused on what it

does best. It aims to build sales in Japan in 2015
with the development of more womens, childrens
and baby wear.
PASSPORT 22
Two-pronged defence of womenswear hegemony in Japan

FRC increased its share of the Japanese
womenswear market from 8% to 15% between
2009 and 2014. However, international fast fashion
brands including H&M and Zara are beginning to
make inroads into the market, and their affordable,
on-trend fashion, which is regularly updated and
typically offers a far broader product choice, is
emerging as a threat.
However, it may need to take these competitors on

more directly. Its GU label is already more trendorientated, with a kawaii (cute) Japanese style that
sets it apart from its competitors. Its low prices also
give a competitive edge. There were 277 GU
outlets in Japan by the end of 2014, and the
company wants to take this to 500. This twin-brand
strategy allows the company to compete at both
ends of the market, and react effectively to the
encroachment of international competitors. In the
long term, this model could suit its global markets.
12%
11%
10%
9%
8%
Value share
FRC is investing in improving its range of

womenswear for both Uniqlo and GU, focusing on
high-quality, affordable basics as opposed to
pursuing short-lived runway trends.
Japan: Uniqlo, GU, Zara, Gap and H&M

Brand Value Shares in Womens
Clothing 2009-2014
7%
6%
5%
4%
3%
2%
1%
0%
2009
2010
Uniqlo
GU
2011
Zara
2012
Gap
2013
2014
H&M
PASSPORT 23
Uniqlo vs Selected International

Brands: Sales per Outlet in China 2014
7
6
5
4
3
2
1
400
350
300
250
200
150
100
50
0
Number of outlets
China is FRCs second largest market after Japan,

generating 15% of 2014 values, up from 5% in 2009.
China, which is set to generate 48% of absolute value
growth in apparel and footwear through 2018, is its
main development target and it will open more stores
there in 2015 than in any other global market. It also
launched the GU label there in 2013 (and in Taiwan in
2014).
Sales per outlet (US$ million)
China development target, but offer may need shake up
0
The Uniqlo brand ranked fifth in apparel and footwear in
Zara
Gap
H&M
Uniqlo
China in 2014, higher than Zara and H&M. Of the
Sales per Outlet 2014 (US$ million)
Number of Outlets 2014
international brands in the market, only sportswear
giants Nike and adidas were higher. Seven of the top 10 However, in terms of sales per outlet, Uniqlo is
brands in China in 2014 were local, but there is growing
the weakest of the four key fast fashion brands.
demand for international brands, driven by consumer
This is partly because of its outlets - unlike
aspiration.
Japan, there has been little emphasis on large
outlets - buy may also be connected to its offer.
This trend is an opportunity for international brands
Uniqlos more functional alignment is less
such as Uniqlo. FRC also enjoys significant
attractive to Chinese female consumers, who
geographical advantages in logistical terms; much of
prefer more traditionally feminine design.
Zaras offer, for example, has to be shipped from Spain.
Inditex and H&M's catwalk tracking expertise is
The competitive environment is intensifying - Gap
likely to gain more traction in womenswear, and
added 30 new stores to its Chinese network in 2014,
FRC needs to develop alternative positions to
and H&M added 76 in FY 2014 - but FRC is committed
keep up.
to accelerated store openings to respond to this.
PASSPORT 24
China online a quandary for FRC

China offers potentially explosive online apparel and
footwear sales. Apparel and footwear internet retailing
sales are set to outperform store-based specialists
through 2019, driven by booming digital access, and
the many consumers unable to reach physical stores.
30%
80
25%
70
60
20%
50
15%
40
30
CAGR 2014-2019
Fast Retailing sells via Tmall, the Chinese B2C

market site. This is not necessarily unambitious, as
Tmall is the go-to site for most Chinese online
consumers. Most brand operators have found online
development costs in China are far higher than
expected, and FRCs caution may be justified.
Nonetheless, it is imperative that the company does
not lose the initiative in this market, given that
competitors such as Inditex are investing heavily in
the channel. Development will be a challenge, but
perhaps better sooner rather than later.
90
US$ billion
FRC has always been cautious about online sales,

however, with its CEO stating that Many people
expectonline retailing to expand, and physical store
networks to shrink, but I dont agree. In Japan, less
than 4% of Uniqlos 2014 sales were generated
online, compared to an average 11% for the total
apparel and footwear market.
China: Apparel and Footwear Sales

Store-Based vs Online 2014-2019
10%
20
5%
10
0
0%
Specialist Retailers

Internet Retailing

% CAGR 2014-2019
PASSPORT 25
Rumours of massive Indian investment
Forecast per Capita

Disposable Income (US$)
2014-19, China, India, Delhi
and Mumbai
7,000
Per capita disposable income (US$)
Indias booming middle class, rapid urbanisation and appetite for

Western brands offer solid opportunity to Fast Retailing. The
Indian retail market is liberalising, following the relaxation of
Indian foreign direct investment (FDI) regulations. Significantly,
the company operates nine Uniqlo outlets in Bangladesh via
franchise, a similar market to India.
The company has indicated plans to open up to 1,000 stores in
India in the long term, with the largest-single measure of FDI in
the retail sector into the countrys history. FRCs biggest
challenge will be making the brand chime with local consumer
preferences. Although international brands are valued in India,
Japanese design is not as popular as American or European
styles, and Uniqlos emphasis on function may be less attractive.
Nonetheless, FRC appears committed, and is likely to follow its
international development strategy of larger stores in key Indian
cities with higher levels of disposable income.
This, incidentally, may lead to a hiccup for the company. Largeformat stores are not only relatively uncommon in India, but also
in strong demand from competitors including Zara and H&M.
The potential of the market can be seen by Inditexs success with
Zara in India. Average store sales in 2014 were US$3.7 million,
the second highest in the total apparel and footwear market after
super premium label Burberry. This underlines demand for
stylish, new international brands from urban Indian consumers.
6,000
5,000
4,000
3,000
2,000
1,000
0
2014
2015
China
Delhi
2016
2017
2018
2019
India
Mumbai
Above - although forecast growth in disposable income

in India overall lags behind China, in the large cities that
Uniqlo will initially be looking at, income size and
forecast growth are comparable.
PASSPORT 26
Uniqlo ramps up US activity

FRC aims to grow meaningful share in the US, a market set to generate 8% of total absolute value growth
through 2019. Although the company has yet to establish a visible market share, it had 39 Uniqlo stores
there at the end of FY 2014, and aims to add 20 to 30 new stores annually over the short term, eventually
accelerating to 100 stores per year. FRC has installed a predominantly American management team with
extensive market knowledge to establish the Uniqlo brand. It aims to become the leading apparel brand in
the US and to generate US$10 billion annual sales in this market within 20 years.
This seems wildly ambitious, but of all the international markets the company is looking at, the US may be
the best fit. Fast fashion is underdeveloped, and peers such as Inditex and H&M are making significant
gains. Uniqlos simplicity, emphasis on functionality as well as femininity and use of cutting-edge, goodquality fabrics make it a good fit with young US consumers, and its affordability is important in a market
where price consciousness lingers.
Success in the US is important to FRCs plans to become the world's top apparel and footwear retailer, not
only because of its size and wealth, but also because of the markets status as a global trendsetter. High
brand visibility in the US will translate into high global brand visibility among aspirational young consumers.
Uniqlo will appeal to teenagers and young adults, although there is no shortage of domestic competitors
including Gap, Abercrombie & Fitch and Forever 21 as well as H&M and Inditex. However, FRC is looking
at a multibrand strategy to address a wider section of the consumer base where possible. It acquired New
York-based Theory in 2010 and a majority stake in super premium denim label J Brand in November 2012.
In March 2014, it pulled out of an attempt to buy the preppy J.Crew brand. J Brand has yet to perform,
and the company is struggling to gain momentum with a multibrand strategy. However, in summer 2014, it
indicated that it aims to bring GU to the US. This is potentially a far better fit for the US, as the low price and
kawaii (cute) position of the brand should play very well with young American consumers. Rather than
buying share, the company may do better to use what it has already.
PASSPORT 27
Fast fashion gap opens opportunity for FRC in the US

For a trend-defining market, the US has been relatively slow on the uptake of fast fashion. Fast fashion
brands H&M and Zara are doing exceptionally well as a result, and have shaken up the teen/young adult
apparel segment, with established players such as Aropostale and Abercrombie & Fitch feeling the
pressure. The Gap Inc, with its Old Navy and Gap brands, has responded to this by announcing a 5-year
plan to build a more responsive supply chain, but still lags behind these new players.
Fast fashion could have been designed for the US, where consumer expectations are often far higher in
terms of product availability, consumer gratification and pricing. FRCs core Uniqlo brand (and GU, if/when
the company decides to bring it to market) should do well, although the competitive environment is
intensifying. The presence of more premium brands such as Marc Jacobs in the top 10 also suggests
recovery in consumer confidence, which could help FRC turn around the fortunes of the J Brand label.
2,500
50%
2,000
40%
1,500
30%
1,000
20%
500
10%
CAGR 2009-2014
Absolute value growth

(US$ million) 2009/2014
US: 10 Most Dynamic Apparel Brands in % CAGR and Absolute Value Growth Terms
2009-2014
0%
Lululemon AG Adriano
Athletica Goldschmied
Michael
Kors
Under
Armour
Soma
Intimates
H&M
The North
Face
White
House/
Black
Market
% CAGR 2009-2014
Forever 21
Marc
Jacobs
PASSPORT 28
FRC sees hope in Western Europe

Western Europe, where the company generated 5% of 2014 apparel and footwear revenues, is set to
shrink through 2019, with total absolute value decline of US$7 billion. Clearly, market conditions are not
ideal, but the company believes its affordable fast fashion model holds potential. FRC, which is present in
the region with Uniqlo and Comptoir des Cotonniers, achieved a CAGR of 13% over 2009-2014 (albeit from
a low base), when the total market saw zero growth. The forecast decline in market value suggests ongoing
consumer price sensitivity, and Uniqlos value offer means it is well positioned to enjoy sustained sales in
what remains a wealthy and acquisitive consumer base, despite the effects of the sovereign debt crisis.
The company still has a relatively narrow regional footprint, fully present in only the UK and France in 2014,
although it launched in Germany in 2014 and is set to enter Belgium in 2015. It is focusing on large stores
in key cities, and targeting what it calls major markets. Spain, set to be the best-performing market in
absolute value terms, and Turkey, with its large, young population, are the obvious development targets.
3%
2%
1%
-2
0%
-4
-1%
-6
-2%
-8
-3%
-10
-4%
% CAGR
Absolute value growth

(US$ billion) 2014/2019
Key Western Europe Apparel and Footwear Markets, Forecast Growth 2014-2019 and
% Company Share 2014
% CAGR 2014-2019
PASSPORT 29
J Brand acquisition adds dimension to FRCs denim portfolio
40
3%
30
2%
20
1%
10
0
CAGR 2014-2019
Value sales (US$ billion)
Global Jeans Market by Price Platform

2014-2019
0%
Economy
Jeans
Standard
Jeans
Premium
Jeans
Market Size 2014 (US$ billion)
Super
Premium
Jeans
% CAGR 2014-2019
Fast Retailing Co Ltd: Jeans Presence

by Brand 2014
Value sales (US$ million)
Fast Retailings acquisition of an 80% stake in US

super premium denim brand J Brand in December
2012 has been problematic. The brand, sold via
more than 2,000 outlets in the US, combines a
fashion-forward approach with a tailored line.
The deal strengthened FRCs position in the US
where Uniqlo is still weak, but the super premium
brand has proved problematic and made losses in
2014. In the US, where 69% of J Brand sales were
generated, these products are forecast a CAGR of
less than 2%, and the market is crowded.
However, the acquisition should generate crossbrand synergies. While Uniqlo will use J Brands
denim expertise to enhance its position in the
economy and standard jeans segments, J Brand
will be able to capitalise on FRCs retail know-how.
More importantly, FRC is looking to push the
brand globally. Other regions hold much stronger
prospects for super premium, notably Africa and
the Middle East, where Gulf State consumers will
drive a CAGR of 6% through 2019. Carefully
selecting markets should turn the acquisition into a
valuable asset in the long term.
600
500
400
300
200
100
0
Economy
Jeans
Standard
Jeans
Uniqlo
GU
Premium
Jeans
Super
Premium
Jeans
J Brand
PASSPORT 30
Sportswear trend could help FRC grow US share

Sportswear trends in developed markets, notably the companys target US, offer FRC promise. Globally,
sportswear is set to generate a CAGR of 3% through 2019 compared to less than 2% for the total apparel
and footwear market, with 26% of total absolute value growth to come from the US.
CAGR 2014-2019
US$ million
Part of this growth will be from high-ticket performance products, notably footwear, produced by traditional
sportswear players such as Nike. However, there has been a spike in womens activewear over the review
period, and Lululemon Athletica Inc, a yoga-inspired sportswear company aimed mainly at women, was the
best-performing US apparel and footwear brand between 2009 and 2014.
Uniqlo is well positioned to develop sportswear
US Sports Apparel by Type: Absolute
with a combination of functionality and design. It
Value Growth and % CAGR 2014-2019
has a long history of advanced fabric development,
12,000
5%
notably its sweat-absorbent and quick-drying DRY10,000
EX material. Its brand ambassador Novak Djokovic
4%
offers further strengthening of this trend. Uniqlos
8,000
main product development strategy aims to sell
3%
into the growing convergence between sportswear
6,000
and casualwear and is called LifeWear. These
2%
4,000
products cannot really be defined as sportswear,
1%
and are used more for everyday wear. However,
2,000
the high level of function that FRC uses in its fabric
0
0%
choices and design expertise could give it a solid
Performance
Outdoor
Sports-Inspired
base from which to roll out an explicitly sportaligned range, separate from LifeWear. There is
% CAGR 2014-2019
massive potential in this area.
PASSPORT 31
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
BRAND STRATEGY
Multibrand strategy led by Uniqlo

FRCs brand portfolio is dominated by Uniqlo, which generated 83% of its
total apparel and footwear sales in 2014, and is its best known brand
globally. In addition, it operates five other brands. GU, its second brand,
worth 12% of 2014 values, is a low-priced label focused on Japan, but one
that the company is setting up for international expansion.
J Brand, acquired by the company in 2012, is a US-based super premium
denim label. FRC opened its first directly-run J Brand store in Japan, in
Osakas prominent Hankyu Umeda department store, in October 2013. The
brand has a cult following (as well as a limited retail presence) in Western
Europe, and is also set for a stronger international presence.
Comptoir des Cotonniers, acquired in 2005, is a France-based women's
fashion brand known for its quality fabrics and sharp silhouettes. It offers
French-style and high-quality fashion at affordable prices. The company
has expanded across France, other European markets, Japan and other
Asian markets and the US. Princesse tam.tam, acquired in 2006, is another
French brand and offers corsetry, homewear, swimwear and sportswear. It
is also mainly based in France via a mix of directly-operated and franchise
stores, although products are also offered in over 1,000 other stores in 48
countries. Finally, Link Theory Japan, which owns luxury labels Theory,
Helmut Lang and PLST, was acquired in 2009.
This multi-branding allows FRC to enter new markets with a specific
tailored approach, reflecting demographics and incomes and lets it reach a
much wider consumer base.
PASSPORT 33
BRAND STRATEGY
Uniqlo success dwarfs other brands

FRC reports its business in three divisions:
Uniqlo Japan; Uniqlo International; and Global
Brands, which consists of the rest of the
portfolio, even those parts that trade in Japan.
In its bid to become a dominant force in the

global apparel market, Fast Retailing has opted
for an acquisition-led strategy to increase
market share. It made Link Theory Japan, which
owns luxury labels Theory, Helmut Lang and
PLST, a fully-owned subsidiary in March 2009.
CDC was bought in 2005 and PTT was acquired
in 2006. Most recently, the company acquired
an 80% stake in J Brand in November 2012 and
it is still looking to add to the portfolio.
100%
90%
80%
70%
Value share
The surge in store numbers for Uniqlo,

especially the drive into China, has meant that
the company has generated even more of its
sales from this brand over the review period;
however, this is not an indication of weakness,
as sales from its combined other brands grew
by a total absolute value of US$466 million
between 2009 and 2014.
Share of Fast Retailing Co Ltds Sales

from Uniqlo vs Other Brands 2009-2014
60%
50%
40%
30%
20%
10%
0%
2009
2010
Uniqlo
2011
2012
2013
2014
Other Brands
PASSPORT 34
BRAND STRATEGY
Other brands offer opportunity, but Uniqlo is king

Fast Retailing's presence is entirely focused on Asia
Pacific, North America and Western Europe. Uniqlo is
its only brand that has significant global presence and
brand recognition, with most of the other chains
operating predominantly in their country of origin. Fast
Retailing has a long way to go to catch up with Inditex,
whose other fasciae such as Pull&Bear and Bershka
have hundreds of stores worldwide.
Fast Retailing Co Ltd: Net Sales by

Division ( billion)
FY 2013/FY 2014
2014
The companys past acquisitions have been focused

on niche, premium brands. In terms of increasing
penetration in mass segments, the company has
expressed its intent to grow GU. In 2013, it opened its
first GU store outside Japan, in Shanghai, and has
indicated that it aims to push the brand into Europe
and possibly North America. GU would pose a credible
threat to fast fashion brands such as H&M and Forever
21, especially at the younger end of the consumer
base.
Fast Retailing could also consider a European or
American mass-market brand as its next acquisition
target, following its decision to step away from the
J.Crew purchase in 2014.
2013
Uniqlo Japan
Uniqlo International
Global Brands
Source: Fast Retailing Co Ltd
PASSPORT 35
BRAND STRATEGY
Uniqlos narrow focus benefits consumer

Despite the growing scale of Uniqlos stores, a
figure that will rise as it carries on with its scrap
and build store development strategy and rolls out
more flagships, the actual offer in-store is typically
fairly limited and reflects the brands higher quality
position.
Uniqlo has 16 takumi, or textile masters, on its staff
who specialise in areas such as dyeing or sewing.
A typical order will be around a million units of
denim, fleece or cashmere, and FRC strengthens
its buying power for the brand by offering a smaller
selection of fabrics across a limited selection of
styles than other retailers.
However, it offers them in a massive range of
colours; for example, there are up to 80 colours of
its signature polo shirt available. Not all of these
sell, but the wide spectrum fills the space in-store.
Uniqlo has markedly fewer styles than brands such
as Topshop or Zara. This underpins the better
quality of the fabrics, as it can consolidate the
fabric buys as much as possible.
Above - t-shirt display in Uniqlo store.
This narrow focus not only improves buying

power and allow the company to pass on savings
to consumers, but also means that product
development benefits from a heightened focus
that few other brands enjoy. The brand risks
monotony, but the quality and value of the offer
means that consumers are happy to return again
and again.
PASSPORT 36
BRAND STRATEGY
Uniqlo LifeWear looks to straddle two horses

FRCs Uniqlo brand has a strong technical
position. This, rather than focusing purely on shortlived fashion trends, gives it a strong point of
differentiation in a very competitive market, which
has allowed it to expand international sales rapidly.
Uniqlo aims to bring high-quality, functional
products to the mass market and in 2013
remodelled its Made For All Line into LifeWear.
This is a group of products that the company
describes as high-quality, fashionable basic wear,
including the Uniqlo fleece, functional HEATTECH
and AIRism innerwear, Ultra Light Down, and
cashmere sweaters.
LifeWear is positioned in the emerging
convergence between casualwear and sportswear,
although inclining much more to the former.
Nonetheless, this is why FRC has signed tennis
and golf champions Novak Djokovic and Adam
Scott as global brand ambassadors for the Uniqlo
brand. This creates a certain amount of
development pressure, but places the brand ahead
of peers who are all developing softer, less
performance-aligned sportswear lines.
Above - Novak Djokovic for Uniqlo
The company offers a limited amount of

performance wear - notably Djokovics own line of
tennis gear - but the style and development
position of LifeWear is far more fluid.
This fluidity will be used by the company to tailor
its offer to individual markets; for example, it is
arranging its LifeWear range in Western Europe to
suit local customer needs, and the company claims
this has helped to boost the brands popularity.
PASSPORT 37
BRAND STRATEGY
GU set for expansion

GU generated sales of 108 billion in FY2014, a
y-o-y increase of 28%. FRC is positioning the
brand for international expansion, and as a more
direct competitor to fast fashion brands such as
H&M.
The brand's low-priced positioning (typically, items
sell for around half the cost of Uniqlo) helped it
generate a CAGR of 33% through 2014. Even so,
the company claims that an over-emphasis on
fashion for younger customers dampened sales in
FY 2014.
As with Uniqlo, new outlets and a flagship strategy
have helped drive growth - sales leapt following
the opening of two flagship stores in 2011, and a
third in 2012 in the upmarket Ginza shopping
district. It aims to roll out 50 stores in Japan a year
until it hits 500; in 2014, the total stood at 277.
Its core demographic is younger consumers with
lower levels of disposable income. Although
pricing is significantly different from Uniqlo's, there
is still room for further differentiation by focusing
on low- priced, trend-led clothing, making it a
credible contender in the fast fashion segment.
This makes it a strong contender for international

development. It opened stores in Shanghai and
Taiwan in 2014, aims to open more stores in Hong
Kong, South Korea and other Southeast Asian
markets in 2015, and ultimately expand into
Europe and the US. FRC believes that its
Japanese design aesthetic gives it strong
competitive differentiation in the global market,
and its low prices will also sharpen its competitive
edge.
PASSPORT 38
BRAND STRATEGY
Online strategy still lacks drive
Online sales of apparel and footwear generated

10% of total global retail in 2014, and this share will
accelerate. Absolute value sales growth was led by
China and the US, and Uniqlo is present online in
both (as well as Taiwan and South Korea), but its
online offer in both markets is under-resourced,
and really requires more investment.
Most Dynamic Apparel and Footwear

Markets 2014/2019 and % Sales via
Internet 2014
90,000
25%
80,000
20%
70,000
60,000
15%
50,000
40,000
10%
30,000
20,000
5%
10,000
0
0%
Apparel value sales through internet retailing 2014
This is well below the market pattern - 11% of

apparel and footwear sales were sold online in
2014 in Japan, and this market is FRCs best. The
company is reluctant to expand online as it
believes its physical stores cement consumer
relationships, but improving online sales may be
key to growing share in international markets,
especially the US.
With Uniqlos launch in Germany, and growing

presence in the UK and France, FRC should
consider launching e-commerce platforms in these
markets as well.
Absolute value growth (US$ million) 2009/2014
Fast Retailing began selling its products online in

2000 in Japan. The online store started out with
significantly fewer products than its physical
outlets, and its online business struggled to attract
consumers. It has improved its offer, but according
to company data, only 3.6% of Uniqlos sales in
Japan (its principal online market) came from the
online channel in FY 2013.

% Total Market Generated by Internet Retailing 2014
Note: Columns highlighted yellow show markets where Fast
PASSPORT 39
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
OPERATIONS
China still key, but FRC looks to shift production

SPA business model keeps costs low
Fast Retailing seeks cheaper manufacturing

base in Asia Pacific
FRC manages the entire supply chain process

from design through to sale through the SPA
(Specialty store retailer of Private label Apparel)
business model. This enables the company to
react swiftly to changes in product demand,
minimising inventory costs and maintaining strong
margins despite low retail prices.
Fast Retailing has 70 partner factories globally,

although most products are manufactured in China.
The company aims to reduce its reliance on China
as manufacturing costs rise there, and in 2014
indicated that it was looking to scale up its sourcing
from India.
Products are conceived a year prior to launch in

R&D centres in Tokyo and New York. As Uniqlo is
not reliant on prevailing fashion trends, the
company is able to strike low-cost, high-volume
deals with material manufacturers.
In 2010, FRC extended its strategic partnership

with Toray Industries through to 2015. Toray is
Japan's biggest fibre producer and has developed
Uniqlo's innovative fabrics such as HEATTECH
and Silky Dry.
In 2008, FRC created a joint venture company,

CPAT Private, in Bangladesh, to manufacture
clothing for Uniqlo. The company aims to source
one third of its products from outside China and
has outlined plans to increase its manufacturing
base in Thailand, Vietnam and Bangladesh in
particular.
However, Fast Retailing may struggle to make the
cost savings that it expects from cheaper Asian
manufacturing countries as several countries in the
region such as Bangladesh and Vietnam have
experienced recent increases in garment worker
wages in response to strikes that have caused
severe supply chain disruptions.
PASSPORT 41
MARKET ASSESSMENT
OPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
RECOMMENDATIONS
Rapid international growth, supported by functionality and price (1)

Looking to new international markets
Although the North American apparel and footwear
market is not especially dynamic, the scale and
influence of the market still hold considerable
opportunity. FRCs launch of online sales should
be backed by faster retail expansion to consolidate
brand awareness. At the same time, the company
needs to push into dynamic growth markets in
Eastern Europe and Latin America, where its
international rivals already have a healthy lead.
Enlarging GU
Despite owning a multibrand portfolio, Fast
Retailings other brands remain niche. The
company must actively pursue retail expansion of
these brands, through the launch of stand-alone
stores, for them to become stronger sales
generators. GU in particular offers significant
potential to be grown in Asian markets, as well as
Western Europe and the US where price
sensitivity, especially among younger consumers,
remains acute.
Sportswear offers window

While Uniqlo's technologically-advanced fabrics
already give the brand a competitive edge, it
should seek to further this by strengthening its
position in categories where such functional
innovation is particularly valued. There is a strong
opportunity for Uniqlo to produce high-quality
functional sportswear at affordable prices,
especially the US, where soft sports brands such
as Lululemon and Gaps Athleta have seen
explosive growth.
Bring online up to speed

Uniqlo needs to up its online game in international
markets to match the rapid pace of its store
expansion, especially if it aims to be the worlds
leading apparel and footwear player. Uniqlo should
also consider innovative ways to engage
consumers online, reflective of its approach to
clothing.
PASSPORT 43
RECOMMENDATIONS
Rapid international growth, supported by functionality and price (2)

Accelerating international growth
FRC has stated that it aims to be the largest
apparel and footwear retailer in the world by 2020.
It has some way to go, and in 2014 generated 92%
of total sales in Asia Pacific. If it is serious in its
ambition, it needs to pick up the pace of global
expansion and broaden its global footprint.
Western Europe, India, China and North America
are all development targets, but Mexico and the
Gulf States are just two potential markets that
could serve FRCs ambition.
GU a genuine contender
Uniqlo is the companys core business; however,
its sister brand GU offers strong potential in Japan
and internationally. It is lower priced, positioned for
younger consumers and its product development
model is closer to conventional fast fashion than
Uniqlo, which typically takes a year to bring
products to market and claims to eschew catwalk
trends. GU could do well in all the markets Uniqlo
is in, and offers direct competition to the likes of
H&M.
Sportswear-specific products
Uniqlo's LifeWear line straddles casualwear and
sportswear, but the company could do well with a
more explicitly sports-aligned offer. It is well known
for its use of technologically-advanced fabrics,
which give the brand a competitive edge. If Uniqlo
can produce high-quality functional sportswear at
affordable prices, its push into the US, where soft
sports brands such as Lululemon and Gaps
Athleta have seen explosive growth, could be
made easier.
Digital strategy needs clarity

FRCs focus on the physical store as a way of
cementing consumer relationships is a solid
strategy. However, its reluctance to push online
sales seems perverse; in the UK, for example,
online sales generated 19% of total apparel and
footwear sales in 2014, and pure play internet
retailers such as Asos are making huge gains.
FRC needs to find a way of combining its ecommerce and physical stores to remain
competitive.
PASSPORT 44
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PASSPORT 45

Fast Retailing Co LTD in Apparel and Footwear (World)

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SCOPE OF THE REPORT

Apparel and Footwear

APPAREL AND FOOTWEAR: FAST RETAILING CO LTD

Fast Retailing Co Ltd is a

Key company facts