Tadashi Yanai opened his first Uniqlo (shortened from “Unique Clothing Warehouse”) in Hiroshima in 1984 — building on a family apparel business that that existed since 1949:
Expanding steadily over the following decade, he launched strip-mall and suburban stand-alone stores throughout Japan and, finally, breached Tokyo city limits with a Harajuku flagship shop in 1998. Soon after, Uniqlo hit upon the product that would transform the retailer from a ho-hum chain store into a Japanese household name: A $20 fleece jacket, in a rainbow of colors, found the sweet spot of the recession-strapped Japanese middle class. No longer an expensive technical fabric meant for mountain climbing, fleece could be worn on the street or around the office. Uniqlo fleece became ubiquitous in Japan — in the year 2000 alone, it sold 26 million. It also gave Yanai a taste of what it’s like to leave your mark on an entire society.
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A brand like Zara attempts to chase trends, reacting nimbly season after season. When an unanticipated mini-fad for purple crocheted tops emerges, Zara will scramble to move a new item from the factory floor to store shelves in about two weeks. Uniqlo employs a nearly opposite supply-chain strategy: It places gargantuan orders up to a full year in advance, allowing it to negotiate rock-bottom costs for high-quality work. It then passes on those savings to its customers. Because it sells wardrobe essentials, it can count on fairly stable demand. “Our predictive planning is very accurate,” says Odake, “so we rarely do heavy markdowns. We don’t operate any outlets in Japan.”