Fast Retailing’s consolidated sales revenue for the August 2018 period exceeded 2 trillion yen. UNIQLO, its main force, has seen its sales overseas exceed those within Japan. CEO Tadashi Yanai explains, “Our success depends on the same items sold in all the countries we operate in throughout the world. We have secured a position as a global brand. Our next target is 3 trillion yen, and our target after that will be 10 trillion yen.” We asked Yanai what measures will be taken and how the company will transform itself to achieve further growth targets.

For the last 30 years, Fast Retailing achieved major growth and transformed from a specialty store for regional areas to a leading global retailer

The company has completely reinvented itself numerous times. It would not have been able to achieve further growth without changing into a different company at each new stage, from being a local chain to a nationwide chain, a chain in Asia and then becoming a global chain. At the same time, it continuously considered what products were necessary to garner support around the world. The answer was our “LifeWear” concept.

It offered good quality and designs at affordable prices, with clothing sold as accessories that could be used to suit any style of the wearer for their purposes and fashion sense. It enhanced its quality and designs to be able to compete on the world stage with the same products in all locations.

Now UNIQLO has become a brand with global recognition for its clothes that can be worn by anyone, from fans of luxury brands to people with no interest in fashion, and from affluent people to the not-so-affluent.

Yanai obj ects to the notion that the Japanese market for fashion has shrunk in the last 30 years

I don’t believe the Japanese market for fashion has shrunk. In the mid ‘90s, the scale of Japan’s clothing market exceeded that of the United States. It was an odd situation if you compare the population sizes. In addition, at the time clothing was being sold that wouldn’t usually be sold at such prices at Japanese department stores, and consumers thought that clothing from mass retailers that was cheap was therefore not fashionable.

We discovered those needs and grew by creating a new market. Although the sales of certain fashion brands and business categories have probably decreased, it’s not that UNIQLO won a zero-sum game and snatched away their shares.

Consumers are free to use the money in their wallets for whatever they want. They support the companies that create appealing products. Companies that don’t enhance the value of their clothing don’t survive. I think that Japan’s Heisei period that started in 1989 was a turning point to such an era.

Competitor companies are appearing in fields besides fashion. That’s why we need further growth.

When our sales revenue exceeds 1 trillion yen, our next target will be 3 trillion yen. After that will be 10 trillion yen. We always aim to triple our current figure and think about what would be best to do.

In the past retailers from the fashion industry like Inditex and H&M were our competitors, but it’s now an age where we need to recognise Nike, Adidas, Amazon, and Alibaba as our competitors too. We won’t win by thinking according to conventional standards for growth.

What is needed to stand shoulder to shoulder with sports brands and ecommerce retail sites that are a growing presence amidst globalisation and digitalisation?

In my company’s case, we are striving to master LifeWear – the ultimate everyday clothing that is “made for all.” Serving all people is our raison d’être and mission.

We need to become a retailer that produces information and offers products and services that meet the needs of the people who wear our clothing, not the convenience of the sellers. We must become a company where everything from planning to production to sales is done based on the voices of our customers.

UNIQLO’s LifeWear concept of selling the ultimate everyday clothing is actually something anyone can do

Clothing that can match clothing from any other brand can be made in all price ranges. We can do with any brand of Fast Retailing, including Gu, PLST, Theory, Comptoir des Cotonniers, Princesse tam.tam, and J Brand.

Other companies can probably have products with the concept of LifeWear. But the prerequisite would be that the entire company would have to work in that direction. It would not be possible to implement unless all the managers and all the employees believed in it. It would be impossible unless the top management staked their life on it and changed the company so all the employees could do their jobs in the same direction.

Other companies can also have a completely way of thinking unlike the position of my company. I think it would be possible for a niche brand from Japan unlike any other to expand globally. Managers should think carefully and discover what about their company would have the strength to gain popular all over the world.

I think the development of digitalisation is a chance for the creation of new business

Right now, the top 10 companies for market capitalisation are mostly digital companies. Going forward I think that all industries will become service industries and information industries. In the super-information age, using information has become the basis of company management and people’s lifestyles. It’s necessary to do business in line with the conditions of this age.

The internet itself is now just infrastructure. The biggest earner in the 19th century gold rush wasn’t people swarming for gold, but Levi’s, which sold those people the clothing they needed. If we think about the same phenomenon occurring from that time, it’s not as simple to think about how to achieve growth using the internet.

What is needed in this new age is not just changing companies but also changing the way people work

Even if I’m not around, what’s needed for future growth is for each employee to think about his or her job and all the jobs while working, and to function with team management. Not just managers but all employees, including at stores, factories, merchandising, and marketing, should work as teams. It’s also important for them to connect with customers.

If they connect with customers, global intelligence will come into the picture. To leverage this, we won’t be able to do our jobs unless it’s in teams. The company’s Global One and Zenin Keiei principles mean that each employee is independent and creates his or her own work, to have leaders at every level, and to work in teams. Unless we change to such a working style, this will be an age when we can no longer achieve growth.