Uniqlo’s sister brand GU turns its attention to the U.S. with a new app, website & store
Nearly two years after it opened its first U.S. pop-up, Uniqlo’s sister brand GU is making an even bigger commitment to the North American market.
On Thursday, the company opened its first permanent store outside of Asia in New York City’s Soho neighborhood. It also launched its first e-commerce website and app in the U.S. With these new digital offerings, GU is making its products available to U.S. shoppers nationwide for the first time. More broadly, the moves are key to GU’s plan to become a more internationally recognized apparel brand.
Shoppers today want to comb the internet for product reviews but also come into stores to try on items, GU executives said. “For customers, it’s seamless, the store and the e-commerce [experience],” Osamu Yunoki, CEO of GU, told Modern Retail in an interview at the New York City store. When GU ran a pop-up in New York City from October 2022 to July 2024, customers kept asking when they could get items online, Yunoki shared. The new rollout is GU’s answer to that request.
GU — whose name is close in pronunciation to the Japanese word jiyu, meaning “freedom” — launched in 2006. It is a smaller business than its sister brand, Uniqlo, but contributes sizable sales to its parent company, Fast Retailing. For the three months from March to May 2024, GU’s revenue jumped 5.4% year over year to ¥86.8 billion ($610 million). GU also reported ¥44.7 billion ($310 million) in gross profit. For that same period, Fast Retailing reported ¥767.5 billion ($5.37 billion) in revenue.
In its most recent financial results, GU said it was “starting to see nascent opportunities for global expansion.” GU previously had plans to expand into Southeast Asia, but the pandemic’s impact on sales drove it to refocus on Western markets, Yunoki previously told Nikkei Asia. Until running its temporary store in New York City, GU solely operated stores in Japan, China, Hong Kong and Taiwan. GU had 476 locations worldwide as of May 2024. GU’s U.S. store remains the brand’s only location outside of Asia.
GU’s permanent New York store is two stories tall but also smaller than its other stores worldwide. The top floor primarily houses women’s clothes and basics, while the bottom floor primarily houses men’s clothes and women’s accessories. The new store also has some products exclusive to the U.S., including four colors of sweatpants and select products from GU’s collaboration with the fashion brand Undercover.
When creating merchandise for the U.S., GU tweaked certain styles of clothing and accessories to be more in line with American shoppers’ interests, Yunoki said. “Japanese style is more of a sweet, feminine design. It’s not preferred too much [in the U.S.],” he explained. GU also updated products’ proportions to fit the average U.S. silhouette. The sleeves on shirts and jackets, for example, are longer on U.S. SKUs. Clothes also have a different hip-to-waist ratio.
All styles, though, follow GU’s global “mini edit max” philosophy, which relies on having a streamlined collection of versatile, mix-and-match items. “Low-price fashion brands, in general, try to offer as much variety as possible, but we go the opposite way,” Yunoki said.
GU is part of a crowded landscape that includes H&M, Zara and Forever 21, as well as digital giants like Shein and Temu. Coming to the U.S. makes sense for the brand, given consumers’ preferences for affordable fashion, but “it’s not a move without challenges,” Manola Soler, senior director in the Consumer and Retail Group of global services firm Alvarez & Marsal, told Modern Retail. “And not every fast-fashion retailer is thriving in the U.S.” In January, Authentic Brands Group’s CEO said buying Forever 21 in 2020 was “probably the biggest mistake [he] made.” Forever 21 paid less than 27% of its bills on time between September and December 2023, according to Creditsafe data supplied to Modern Retail.
One way GU might try to up its profile in the U.S. is through its association with Uniqlo, which has more than 50 stores in the country. Unlike Uniqlo, GU is more focused on fashion trends inspired by TikTok and other social media. GU offers products like a cargo maxi skirt and a two-piece sweater that can be worn in multiple ways. Uniqlo, meanwhile, stresses basics like sweatshirts, T-shirts and pants.
“The value proposition [with Uniqlo and GU] doesn’t overlap as much,” Soler said. In that way, gaining brand awareness for GU in the U.S. could be “a little bit of an uphill battle,” she explained. “On the flip side, I think there will be much less cannibalization [with Uniqlo].”
Growing market share in the U.S. — and apparel in particular — is challenging but also requires a “crawl, walk, run approach,” said Anshuman Jaiswal, vp of growth strategy & operations at Nextuple, an omnichannel order management advisory and software firm. GU is “starting in a ‘big bang’ fashion,” he told Modern Retail. “They have to move fast but also recognize that it’s not a sprint.”
To that end, GU hopes to open more stores within the U.S., Yunoki said. But it’s also looking to take things slow. “We’ll focus on New York first,” he explained. “Then, if we are successful, we’ll go out to other cities.” The same goes for other parts of North America, he said. “[It depends on] if we are successful here in the U.S.”