Uniqlo Opens in SoHo

Fast Retailing Co. Ltd. (Yamaguchi, Japan), owner of the 720-unit Uniqlo chain, is opening its New York flagship today in SoHo.

The trendy low-price retailer, which is promising New York shoppers high-quality cashmere sweaters for $99 or less, will be the largest single-brand fashion store in the retail-saturated Manhattan neighborhood, suggesting it has aggressive plans for the rest of the United States.

Tadashi Yanai, who founded Uniqlo with a single store in Hiroshima in 1984, predicted the chain's sales in the United States would reach $30 million by 2007 – a figure that includes revenue from the SoHo store and temporary outlets built around the region over the last two years. He said he expects Uniqlo to become profitable in the United States in its second year.

The 36,000-square-foot store has soaring architecture and a raw, warehouse-like space. In place of main-floor cosmetics counters, the entrance is dominated by an interior glass display filled with revolving mannequins and clean, linear displays of nearly 8000 cashmere sweaters, folded in repeating floor-to-ceiling grids.

“If I opened a very small store, no one would ever pay attention,” Yanai said. “We want to sell basics to everyone, so to make people notice us we have to open in a big way, to make people recognize who we are.”

Last September, the company began opening stores in New Jersey and a temporary location on Greene Street in Manhattan to introduce its designs during the holiday shopping season.

“We tried to imitate the Japanese model as much as possible,” said Nobuo Domae, ceo of Uniqlo USA. “And that was not very good. We used metal shelving that was very efficient and functional, but we didn't know that was only used for discounters. People might have thought our product was like Wal-Mart.”

That may explain why the company has opened such a lavish store in SoHo. Yanai said Uniqlo's splashy entrance into the United States – subway ads, taxi tops and temporary stores that have become ubiquitous in Manhattan in the last year – was conceived to make people take seriously a retailer that has most often been described as the Gap of Japan. However, it still trails Gap in volume. Uniqlo's projected sales, by 2010, of $9 billion would be three times the $3.3 billion it recorded in 2005. But Gap has sales of $16 billion.

Some of that growth, though, may come from acquisitions. As part of its battle plan, the company has told Wall Street analysts it is eager to make an acquisition outside of Japan, and has $4 billion to spend.

Uniqlo has often been compared to other “cheap chic” retailers from around the world, like Zara from Spain and H&M from Sweden. However, Yanai insisted those two chains “copy fashions from the runway and get it out into the stores as soon as possible. That is not what we do.” The typical American consumer does not need or want runway fashions, he said. “They might find it difficult to wear.”