Why Urban Millennials Love Uniqlo
Will the rest of America learn to love it too?
Uniqlo was founded in 1984 in Hiroshima, Japan, as the Unique Clothing Warehouse—an ironic name for a manufacturer known for clothing that is in no way unique. A person can dress sock-to-cardigan in the company’s wares without announcing herself as a devotee of the brand. In an industry as label-oriented as fashion, such anonymity would seem to be a detriment to success. Today, however, Uniqlo has more than 2,000 stores in 15 countries. Its owner, Tadashi Yanai, is the richest person in Japan. Its parent company, Fast Retailing, is among the five largest clothing retailers in the world.
Only a small percentage of Uniqlo’s stores are located in the United States. But for a certain segment of American shoppers—young, urban, professional, practical—Uniqlo basics have become a cornerstone of the contemporary wardrobe. In America’s coastal cities, Uniqlo’s stores—on Newbury Street in Boston, in SoHo in New York, in San Francisco’s Union Square—are forever clotted with customers.
Part of the reason is cost: Because of its low prices—jeans retail for $40, a hoodie for $30, one of the brand’s signature down jackets for $70—Uniqlo is often compared to other big brands in the fast-fashion category, such as Zara and H&M. But the term fits those companies more snugly. Zara endeavors to reproduce the latest couture trends for the masses: Balenciaga recently made a platform sneaker that cost $795; a decent approximation of it can be found at Zara for $34.99. H&M is a one-stop shop for hyper-trendy items—velvet pants, a beaded sweater, a sequined halter dress—at prices that make them easily replaceable when they inevitably become passé.
Uniqlo isn’t in the business of chasing trends. Its staples—versatile black pants, reliable oxfords, crisp cotton socks—are available month after month, year after year. A more apt analogue would be the Gap. In its 1990s heyday, the Gap revolutionized American retailing by making basics cool. But the company eventually became a victim of its own success. “When [the Gap] tried to go from having a certain cachet to being in every single mall in every single town in America, the brand lost its edge,” Steve Rowen, a managing partner at Retail Systems Research, told me. Gap clothing became the uniform of suburban moms and dads. Despite the company’s efforts to make its khakis less baggy and its shirts slimmer, no one wants to fall into the Gap anymore—especially when you can get cheaper basics with cleaner lines at Uniqlo.
The question Uniqlo faces now is whether it can inherit the Gap’s empire without repeating its mistakes. To do so, it will have to convince shoppers across the country of a proposition that’s radical for the industry: Fashion can be affordable without being disposable.
Uniqlo has profited from changes in American society, some of which might seem at first glance to be unrelated to fashion. Millennial shoppers entered a job market with fewer jobs, while carrying more student debt, which limited how much money many of them could spend on clothes. (They also entered a workforce that was more amenable than ever to casual attire; where a suit was once called for, chinos and a button-down—or jeans and a hoodie—now suffice.) That austerity contributed to a cultural shift, in which conspicuously expensive clothing fell out of favor. “We went through a period where the logo was dying and nobody wanted to wear a big logo and advertise for the brand,” Jan Rogers Kniffen, a retail consultant, told me. “That’s the Uniqlo customer.”
These shifting mores created an opening in the American market, one that a company as rooted in Japan’s aesthetic history as Uniqlo could ably fill. “Clothing in the West, it’s associated with status, with rank,” Hirotaka Takeuchi, a professor at Harvard Business School who has studied the brand, told me. In Japan, clothing has traditionally been more standardized. Until the end of the 19th century, when Western influence became more prevalent, kimonos were commonly worn by Japanese people of varying ages and classes. The garment would differ depending on the wearer’s ability to afford fine fabric or embroidery, but compared with the West, where the wealthy telegraphed their status with elaborate styles of dress, such signaling was far more subtle. Takeuchi sees Uniqlo as bringing this old Japanese view of fashion to the U.S. market.
This isn’t to say that people who shop at Uniqlo don’t care about how they look. The company realized that its customers might not want to pay top dollar for pants, but they do want them to fit. A pair of Uniqlo slacks is never going to look like a $200 pair from a high-end competitor. But because Uniqlo offers free tailoring, the pants are probably not going to look like you got them for $40, either. The company may be sensitive to customers’ finances, but it’s alive to their aspirations as well. It offers blouses in silk and sweaters in cashmere. In recent years, Alexander Wang, Jun Takahashi, Tomas Maier, and Jil Sander have all partnered with the company on limited-edition designs, clearly hoping to meet their next generation of devotees where it shops now. For Uniqlo, the collaborations provide a frisson of high fashion, a suggestion that the leading lights of couture appreciate its cheap socks and T-shirts too.
Quality isn’t an attribute typically associated with fast fashion, but Uniqlo has also managed to build a reputation for durability. Takeuchi told me the brand that reminds him most of the relative newcomer—Uniqlo opened its first U.S. stores in 2005—is an old American one: L.L.Bean. The association might seem odd, given the venerable Maine retailer’s tradition of outfitting its customers in boxy flannels and duck boots. But in terms of philosophy, if not aesthetic, Takeuchi thinks the comparison is apt. The proposition L.L.Bean has always made to its customers is that they are investing in items that will be with them for a lifetime. Uniqlo can’t promise anything approaching that longevity, but in an era of disposable fashion, a Uniqlo garment, made from hearty materials and cut in a timeless style, can feel like an investment piece. “In a sense, it’s L.L.Bean in modern times,” Takeuchi said.
Like a mountain outfitter, Uniqlo touts the use of a number of signature technologies in its clothing. Puffer coats are insulated with “ultra-light down,” a down fill that purportedly makes jackets less bulky and easier to pack, without sacrificing warmth. HEATTECH, marketed as an innovative insulating system, and AIRism, which is promoted as moisture-wicking, are woven into a variety of Uniqlo staples—socks, underwear, camisoles, leggings, pants—supposedly making them more comfortable and resilient than competitors’ products. Not built for decades of wear on the rocky coast of Maine, perhaps, but more than up to the challenge of a few seasons of service in the cubicle.
In Asia, Uniqlo is everywhere. More than 800 of the brand’s stores are in Japan—where Uniqlo, by its own estimates, accounts for about 6.5 percent of the total apparel market. Much of the brand’s international growth in recent years has come from other countries in the region, including mainland China, Hong Kong, Taiwan, and South Korea.
To achieve the kind of dominance in the U.S. that the company enjoys closer to home, Uniqlo will need to grow significantly. A few years ago, Yanai aimed to generate $10 billion in sales from 200 stores in the U.S. by 2020; the company currently operates its 50 or so U.S. stores at a loss. “Compared to H&M or Zara, they have been struggling a little bit in the U.S. market,” says Won-Yong Oh, a professor at the University of Nevada who studies retail companies. “They have less brand awareness.” Many Americans have never heard of Uniqlo, or don’t know how to pronounce it. (It’s you-nee-klo.)
That could be an opportunity to make a good first impression. But as Uniqlo learned when it arrived on American shores, first impressions can be hard to manage. The three original U.S. stores were in New Jersey malls, where the company soon encountered several hurdles, including fit. (American customers, on average, are taller and fleshier than Japanese shoppers.) It closed the stores within a year.
Uniqlo has continued to struggle in suburban markets. Rowen, of Retail Systems Research, said he thinks the company should hew closely to cities, where it has found its greatest success, because that’s where its core customers are. This would also help it avoid the fate of the Gap, which traded its sense of self for growth.
The Gap isn’t the only Uniqlo competitor that has faced challenges in recent years. J.Crew has seen sliding sales as customers complain about strange aesthetic choices and high prices for middling quality; Old Navy (which is owned by the same parent company as the Gap) has strong sales, but its clothes are dogged by a reputation for frumpiness and flimsiness. Uniqlo doesn’t have upwardly mobile city dwellers entirely to itself, however. Madewell and Everlane both offer a relaxed yet refined look, though at a slightly higher price point. For those with a bit more to spend, Fast Retailing’s own luxury brand, Theory, offers simple, well-cut items that call less attention to themselves than do clothes from similarly situated brands.
Given Fast Retailing’s size and international strength, it can afford to not rush things with Uniqlo. “They can do whatever they want,” Kniffen said. “They’re a big, healthy company.” Despite the underwhelming performance of Uniqlo’s American stores thus far, the company’s operating income outside of Japan grew by more than 62 percent year-over-year in 2018, while revenue grew slightly more than 25 percent. From its urban outposts, Uniqlo can slowly upend American ideas about the interplay between quality, style, and status—one basic button-down at a time.
This article appears in the April 2019 print edition with the headline “Underemployment Chic.”