Will Uniqlo’s New Sister Brand Succeed In The States?

Uniqlo owner, Fast Retailing, has just announced the opening of its sister brand, GU (pronounced – “gee you”) in the United States, planned for fall later this year. Opening on Broadway Street in New York with Forever21, Zara, and Mango as neighbors, the 2,900 square feet pop-up will feature a special line-up of trendy clothing and accessories for both men and women.

The brand was established in 2006 as a younger line of Uniqlo. Homonym for the Japanese word ‘freedom’, GU promotes expressing individuality through fashion. Today, it has 450 locations with the latest store opening in the US being the first outside of the Asia region. Sales of GU clothing and accessories brought ¥249 billion ($1.9 billion), 12% of Fast Retailing’s revenue in the last fiscal year.

In honoring its first launch, CEO of GU ​​Osamu Yunoki shared, “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.”.

The Right Market Fit

Compared to Uniqlo’s minimalist basics, the styles of GU are notably trendier with more prints, patterns, and styles and at a lower price point. Its prices range from ¥590 ($4) to ¥6,990 ($52), almost a third of Uniqlo’s prices. Styles are updated frequently in line with global fashion trends and are priced affordably.

Although 60% to 70% of GU customers have been women in their teenage years to early 30’s, the brand is now seen shifting towards a genderless and ageless concept with their ranges. Its design styles have now embraced unisex models in catering to the ‘gender fluid’ Gen Z crowd and their increasingly diverse lifestyle. The brand has also shifted its strategy to using a more diverse group of models in its advertisements, and encouraging men and women on the shopfloor to mix and match their own items to create their own unique styles.

Where its sister brand plays it safe with basics, GU’s apparel may lean more towards the conservative Japanese style, therefore the brand would have to make some tweaks with Western characteristics to make it more universally appealing to the market. GU has also established research centers in the fashion capitals of Tokyo and London, implementing its transformative Ariake Project to be able to understand what customers want and forecast demand in time. The pop-up will become a testing ground for the brand to trial its product assortment and to test market fit. GU will have to adapt its sizes and styles for the American consumer and its different ethnic groups in comparison to the petite Asians they usually serve.

In Fast Retailing’s attempt to crack the US market, the company aims to grow 200 stores within the next five years, ambitiously multiplying its store count from less than the current 100. However, Fast Retailing’s growth in Europe and America had been stagnant in the past due to its excessive expansion. But as consumers tighten their purse strings, GU’s low-cost fashion may fit into the budget of today’s SHEIN-loving customers. As the store awaits its opening, only time will tell on whether the discount brand will survive New York’s cutthroat fashion scene.