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Content - How Uniqlo wants to score with tennis champion Federer

  • July 13, 2018

How Uniqlo wants to score with tennis champion Federer

Tokyo (SCCIJ) – The Japanese textile giant Fast Retailing, the company behind the fashion brand "Uniqlo", has signed a sponsorship agreement with the Swiss tennis superstar Roger Federer. For the next decade, the Swiss athlete allegedly receives CHF 30 million annually for promoting Uniqlo. Federer is already wearing Uniqlo branded clothes at the current Wimbledon Grand Slam tournament. Marketing experts are convinced that this advertising deal will foster the worldwide expansion of the "Uniqlo" brand although the years the Swiss tennis champion will spend on the tennis court are already numbered.

Roger Federer in Uniqlo shirt

Growing strong since 1984

"Only growth justifies the existence of a company" – following its founder's mantra, Uniqlo has grown since 1984 into Japan's largest fashion brand and has become the world number three in its market behind textile retailer giant Inditex ("Zara") from Spain and H&M from Sweden.  

But the ambition of Uniqlo founder Tadashi Yanai is unbroken – despite the 69-year-old entrepreneur having long passed the retirement age and although he has been keeping the title of the wealthiest person in Japan for quite some years now. According to the Bloomberg Billionaire Index, his share holdings of the Uniqlo parent Fast Retailing are currently worth about 22 billion dollars.  

"Winning the gold medal"

Nonetheless, the Japanese company leader last fall reaffirmed his ambition "to win the gold medal" of the global textile industry in an interview with the Spanish newspaper "El Mundo". After all, we are already number one in Japan and Asia, Yanai emphasized. He expects Fast Retailing to catch up with world leader Inditex within three or four years.  

However, this seems as demanding as unrealistic. His specific target for Fast Retailing is to increase revenues by more than half from 1.86 trillion yen in 2017 to more than 3 trillion yen by 2020. Most recently, the 1,920 Uniqlo stores, more than half of them abroad, contributed more than four-fifths of the group's sales.

Uniqlo global flagship store in Berlin, Germany (click to enlarge)

Uniqlo global flagship store in Berlin, Germany (click to enlarge)

Expansion in Europe

This means that Uniqlo must generate the necessary increase of sales. One region for the expansion is Europe. Last fall, Uniqlo had ventured for the first time with a flagship store in Barcelona onto the Spanish home territory of world leader Inditex. The planned opening of the first Swedish branch in Stockholm in August can be understood as an attack signal to the other rival H&M.  

In the fall, Uniqlo will open a store in Amsterdam. Two more stores are soon to be realized in the West German cities of Cologne and Dusseldorf. Switzerland is not on the Uniqlo agenda, though, as a Fast Retailing spokesperson told the SCCIJ. Outside of Europe, Uniqlo is planning to enter the Philippines in the fall and India next year.  

Success formula "Slow Fashion"

No matter where the Japanese arrive, its rivals Zara and H&M are already there. But Yanai does not care because Uniqlo, the abbreviation of "unique clothing", sells "Slow Fashion" which are basic textiles from underwear over jeans to anorak at reasonable prices while its rival change their collection every three months. "The Uniqlo revolution is that the poor and the rich are wearing these clothes," says Japanese expert Kensuke Kojima, author of the book "Uniqlo Syndrome".  

At this point, the advertising contract with Roger Federer comes in. At first glance, the deal makes little sense, because Uniqlo has neither clothes nor shoes for athletes on offer, not to speak of tennis shoes and tennis wear. Nevertheless, the supposedly 300 million francs for the 37-year-old sports star should be well spent by Fast Retailing.  

"Match made in retail heaven"

This match was made in retail heaven, commented the financial service Bloomberg. Although Federer only has a few active years left on the tennis court, the Swiss, as one of the most famous and successful athletes in the world, should remain an influential brand ambassador even after his retirement from competitive tennis.  

In contrast to this, his sponsoring partner Nike for the last two decades, or any other sports equipment supplier, would benefit less from a retired Federer. But a brand like Uniqlo with rather average everyday textiles may be greatly upgraded and uplifted by a connection with such a famous, sympathetic and wealthy sports champion as Roger Federer. 

Brand value to increase

The less fashionable and rather regular image of Uniqlo is the downside of its business strategy to deliberately ignore current fashion trends and to focus on "basic wear" in order to limit the risk of sitting on the goods at the end of each season. Only some special collections are designed by a variety of renowned designers, including such well-known names as Jil Sander and Ines de la Fressange. Instead, Uniqlo spends an entire year on average for a single product, from the first draft to the finished piece, so it can stay in the program for a long time.  

But despite such efforts, its products are sold mainly via their low prices. This was revealed three years ago, when Uniqlo raised prices due to increased costs. After sales quickly fell, CEO Yanai soon reverted to the former price levels. But the sponsorship deal with Federer will probably increase global attractiveness and value of the brand Uniqlo and make it even possible to increase prices.    

 

Text: Martin Fritz for SCCIJ; Top photo: © Ella Ling/Uniqlo; Center photo: Fast Retailing        

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