Tadashi Yanai, the founder and owner of Uniqlo, is the richest man in Japan, worth over $9 billion. He has spoken openly about his ambition to surpass Spain’s Inditex, which owns Zara, as the world’s largest clothing retailer. To that end, Yanai is currently building a Uniqlo University in Tokyo, where he hopes to train 1,500 new store managers a year, who will fan out across the globe. He has discussed expanding by merger, and nearly succeeded in buying Barneys in 2007. Last year, he talked about buying the Gap.
Yanai was in town recently to accept the International Retailer of the Year award from the National Retail Federation, which was holding its annual convention at the Javits Center. He was much in demand that day, mostly from the Japanese press. “He is like Warren Buffett in Japan,” says Shin Odake, Uniqlo USA’s COO. “He is on television all the time.”
While teams of Japanese cameramen waited, Yanai met with me in a windowless press room. He wore thick glasses and had shaved his graying hair close, and he couldn’t have been more than five-foot-five. Speaking with a translator, he promised more U.S. stores “as soon as possible,” in San Francisco and L.A., and again in New York. When I asked Yanai about his aim to overtake Zara, which grossed about $11 billion in sales last year, he nodded and said, “Yes. By 2020, we’d like to be making $50 billion in sales, $10 billion in operating profit.”
Though announcing domination plans is commonplace for “visionary” CEOs, industry watchers aren’t particularly skeptical.
“Yeah,” says equity analyst Dairo Murata, who is based in Japan and follows the retail industry for the bank Credit Suisse. “It’s realistic. We’re in the Uniqlo era.”
Uniqlo is a company that prescribes, records, and analyzes every activity undertaken by every employee, from Ahmed’s folding technique to the way advisers return charge cards to customers (Japanese style, with two hands and full eye contact). To some extent, management science is an element of all international companies, but Uniqlo’s obsession is more like a turbocharged version of kaizen, the Japanese concept that translates roughly as the continuous search for perfection. (Kaizen is often invoked in business schools when describing Toyota, though less so recently.) Uniqlo has a relatively flat power structure and encourages employees to suggest ideas for improving productivity. Experimentation, however, must go through the proper channels. There is a poster in every Uniqlo manager’s office outlining the “Ten Accountabilities.” No. 8 reads, “As a store manager, always follow company direction. Do not work in your own way.”
Each morning at nine o’clock, employees at the Soho store practice working the Uniqlo Way, doing what they call “The Behaviors,” or the ways in which they are taught to interact with shoppers. General manager Kristi Brink oversees the meetings. Before arriving at Uniqlo, Brink had managed at Home Depot and the Sports Authority. “All companies have rules and guidebooks,” she says. “But Uniqlo is on another level entirely. There’s just a sense of urgency about everything in this place.”
This morning, 30 “advisers” (as Uniqlo calls its employees who help customers) stand at the bottom of the stairs leading to the lower floor, with notebooks open and pens poised. Each is instructed to carry a notebook at all times, and to write down everything any manager tells them. A manager named Jose Campos begins the meeting by riling the crowd up with challenges, exhorting them to keep the New York Uniqlo store No. 1 in the company (“Paris, No. 2, is moving up, getting close!”); to move as many units per transaction as possible (“If it’s raining, offer them an umbrella”); and to keep “shrinkage,” or theft, to a minimum, by making sure customers know they are present.
Within the company, Uniqlo is unusually transparent, informing every employee exactly how much business the store does on any given day, and in each department, down to the number of jeans sold. A four-foot-long chart of sales figures is posted in the employee break room. Campos announces that yesterday, sales were up 70 percent over what they were last year on that same day. (Uniqlo wouldn’t share sales figures, but a good day can easily top $200,000.)
“Okay,” says Campos, “let’s turn to our partners and go through the six standard phrases.”
Every day, at every Uniqlo worldwide, customer advisers repeat what are known as “the six standard phrases,” which they are expected to use while on the floor. The advisers pair off, and repeat after Campos:
“Hello, my name is Uniqlo, how are you today?”
“Did you find everything you were looking for?”
“Let me know if you need anything. My name is Uniqlo.”