Uniqlo Sibling GU Opens First U.S. Store in SoHo
One of Japan’s largest retailers is testing the waters in the U.S. And if it works, shoppers can expect the company to follow in the footsteps of its sister brand, Uniqlo, and add its nameplate to big cities around the country.
GU, which has 450 stores, mainly in Japan, on Friday will open its first store outside of Asia in New York’s SoHo district. GU was established in 2006 and is the second-largest brand in the Fast Retailing Group’s portfolio after Uniqlo. The company, which had 250 billion yen, or $1.73 billion at current exchange, in sales in the last fiscal year, is eyeing 1 trillion yen in sales in the near future.
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The name GU, which is pronounced by the letters G and U, is similar to the Japanese word jiyu, which means free and unconfined.
The New York store is located at 579 Broadway between West Houston and Prince Streets and is 2,900 square feet. It is technically a pop-up — the company signed a one-year deal for the space — but if successful, it will look for a space triple the size for a permanent store, according to Osamu Yunoki, chief executive officer of GU Co. Ltd.
Yunoki, who traveled from Tokyo to New York for the opening, said the decision to come to the U.S. is the first step in a plan to globalize the GU brand. “We’ve been focused on Japan, mainland China and Hong Kong and we may go to Southeast Asia next, but we decided to accelerate the growth by coming to the center of the world.”
Although he’s still taking a wait-and-see attitude and views the SoHo store as a good test of the American market, Yunoki said his dream is to have the U.S. ultimately be larger than Japan. “We’re going to learn and study and then after a year, we will restart,” he said.
He said it’s also undecided how many stores the U.S. market can support, “but we’d like to open as many as Uniqlo,” he said. “It will be difficult to catch up, but the goal is to open GU stores side-by-side with Uniqlo flagships around the world.” Uniqlo operates 2,300 stores worldwide and 44 in the States.
He said the two concepts have “different positioning,” so opening next door wouldn’t be an issue. GU offers more trend-focused products that attract a younger customer and prices are lower. For example, in the SoHo store, bombers retail for $59.90, heavyweight or cropped sweaters for $29.90, pleated pants for $39.90, a heat-padded puffer for $59.90 and T-shirts for $14.90. The store also carries sneakers and other shoes as well as accessories like hats.
Among the most popular items in its home country are cropped cable turtlenecks for women, the heat-padded puffer made from recycled polyester, sweatshirts, a wide-legged women’s pant and a super-wide men’s cargo that has become popular with women.
Yunoki said the mix in the SoHo unit is “less than half of what we have in Japan” because of the smaller size of the store. Although there are a few dressier pieces such as blazers and pinstriped pants for women, the assortment has been “curated” to focus on what are expected to be the bestsellers here. “They’re easy to choose, combine and purchase, and they’re easy on the purse,” he said.
The assortment was brought directly from Japan so there are signs throughout the store warning customers that the sizes run small. Yunoki doesn’t expect that to be a problem and said the sizing can be adjusted in the future. But he’s willing to observe and absorb the results before making any other major moves.
The store will employ six osharista, or style advisers, who will work with customers to find the right products and suggestions free of charge. For the New York opening, it also tapped three TikTok creators — Isa Sung, Ella Mendelsohn and Davis Burleson — to select some of their favorite pieces from the collection. These are exhibited in the store.
“It is a great honor to be opening our first store in the United States,” he said. “New York is a place where people with diverse backgrounds come together from around the world, an exciting city where fashion, art, music and other varied cultural elements intersect. By opening a pop-up shop in the center of SoHo, we will be able to reach a wide range of customers, including New York residents as well as tourists, offering them products filled with the sense of trendiness exemplified in the GU brand message of ‘Your Freedom,’ and allowing them to enjoy outfits that freely express their individuality.”
According to Fast Retailing, for the first nine months of its fiscal year that ended in May, GU reported revenues of 190.5 billion yen, down 5.1 percent from the prior-year period with an operating profit of 17.8 billion yen, a 26.7 percent fall from the year before.
The parent company blamed the downward trend on “sluggish sales of spring items,” and production and distribution issues that caused the delivery of popular items to be delayed. “Colored slacks, light denim tuck-wide pants, sweatshirt-style T-shirts, etc., performed well, but we couldn’t introduce them in a timely manner, so overall sales failed to rise,” and markdowns had to be taken, the earnings report said.
Fast said that beginning in June, however, the delayed products began arriving in stores, so the outlook for the future is brighter.
“We were suffering from supply chain and COVID-19 issues,” Yunoki said. “Uniqlo offers more basics and they can carry over items to the next year. We cannot do that with trendy items so we had to offer a lot of discounts, but it’s better now.”
In addition to GU and Uniqlo, there are six other brands in the Fast Retailing Group: Theory, PlsT (Plus T), Comptoir des Cotonniers, Princesse tam.tam, J Brand and Helmut Lang. Overall, the corporation operates more than 3,500 stores around the world.
