NEW YORK — Uniqlo is ripe for expansion.
With only 20 stores in the U.S., the Japanese retailer will nearly double its fleet in the fall when it launches 18 units in eight weeks. That’s a more aggressive schedule than last fall’s 10 store openings, Larry Meyer, chief executive officer of Uniqlo USA, told an audience at the Japan Society here Tuesday. Meyer’s speech was titled, “Spreading Japanese Fast Fashion to the World: Uniqlo’s International Growth Strategy,” but he spoke more about the U.S.
“There’s enormous opportunity,” he said. “Uniqlo is one of the fastest-growing retailers in the world and has been growing by double digits. We’re confident we can become dominant in the U.S.”
In order to become dominant, the American business will have to generate meaningful numbers, Meyer said, adding that the U.S. must contribute significantly to the company’s $11.6 billion in worldwide sales. Uniqlo, he pointed out, does $7 billion in its home market of Japan, which has a smaller population than the U.S. “We will become a multibillion-dollar company in the U.S.,” he predicted.
On Aug. 29, Uniqlo will unveil six stores, including a flagship in Boston, followed by units in Philadelphia and Southern California. “I like big cities with big tourists,” Meyer said, adding, “Chicago is a priority market.”
Asked if he believes in clustering stores in close proximity to one another, Meyer said, “I’m not there yet. In a sense, that’s the European model. We’re about expanding to both build our brick and mortar as well as expanding the brand presence. In New York, the question is ultimately, how close do you want the stores to be? What is the rent structure and can you afford cannibalization?”
The company paid a high price for its Fifth Avenue flagship here at 52nd Street. When Uniqlo in 2010 signed a 15-year lease for $300 million, it was a record for the priciest store lease. Today, Meyer said, the price looks cheap. “How economically successful can you be when rents are escalating?” he asked, suggesting “making the ground floor smaller and getting people to the upper levels.”
Staffing up the company has been a priority for Meyer, who joined Uniqlo in January 2013 as chief operating officer. He was elevated to ceo in December. “We hired a lot of people in the last year. We will now fill out [the ranks] below them. I want to stay away from looking at specialty retail. I want e-commerce people and big-box people, where the volumes tend to be higher. We built [a team] for the entire U.S. rollout of the first 100 stores.”
According to Meyer, the SoHo store does in the “multi tens of millions of dollars. The Fifth Avenue flagship has been a wonder to us. We’re on the road to profitability in the near term.”
As Uniqlo grows in America, its e-commerce business will grow as well, Meyer said. Right now, e-commerce is 10 percent to 15 percent of the U.S. business. Meyer believes e-commerce will get stronger now that Uniqlo USA has opened its own design studio and “there’s more design energy coming into the U.S. We’ve only been in e-commerce for one year. We know we can get more demand.”
Uniqlo is raising prices by 5 percent in Japan, which has historically been more promotional. “We’ll always have to have promotional items, but we’ll be more targeted than we’ve been,” Meyer said.