Uniqlo by the numbers

August 2010 was another difficult month for Uniqlo. With same-store-sales decreasing 9.3% due to weather and the sluggish economy, they have experienced six months of declining sales this year. Overall Uniqlo opened one new store and closed two existing stores bringing their total number of stores in Japan to 788 (as of August 2010). Besides a decrease in same-store-sales in August, Uniqlo also experienced a 0.4% decrease in the number of customers as well as a 9% decrease in sales per customer. Overall, not one of Uniqlo’s strongest months especially when they experienced an increase in same-store-sales of 5.6% in August 2009 with only 750 stores.

Sales at Fast Retailing’s Uniqlo have been on decline most of 2010, with reasons varying from the weather to the still slow economy. While these reasons are true Uniqlo has also made a few mistakes, namely, oversaturating the retail market by opening too many retail stores (788 as of August 2010), building up excess inventory, which then results in discounting already inexpensive merchandise – lowering the brand's image of quality=affordability meet to one of a discount clothier i.e., if you want that 1,050 yen t-shirt just wait a few weeks and you can buy it for 750 yen. Most recently Uniqlo will begin offering premium jeans for 9,999 yen, a sharp departure from their strongly built brand image of quality=affordability.

Solution (simply put) stop opening new stores, close down non-performing stores, get rid of excess inventory through an actual outlet (no need to make all 788 stores outlets) and choose a category quality=affordability of premium - it is fine to have both just not under the same brand, that’s why there are diffusion lines i.e., G.U..

Let’s hope when the September numbers for Uniqlo are released next week they will report positive same-store-sales and we can look forward to positive signs of improvement.

Data Fast Retailing Co., Ltd.