Direct Line Blog

The 'Gap of Japan' opens NYC flagship

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The timing couldn't be more ironic.

Last night, I attended the launch party for Uniqlo's Fifth Avenue location in New York City, where the brand's new futuristic flagship store showed its shiny self off to an invitation-only cast of thousands amid sake ceremonies and platters of exotic hors d'oeuvres.

This morning, news broke that Gap — oft compared to Uniqlo for its emphasis on medium-price-point staples like jeans, sweaters and outerwear — will shut down more than one-fifth of its stores on these shores. At the same time, it will expand overseas, specifically in Japan and China, the company said.

According to The Wall Street Journal, Gap will reduce its number of North American outposts to 700 by the end of 2013, down 21% from 889 locations as of the end of June.

Once the world's largest specialty apparel chain in terms of revenue, Gap may be suffering the effects of a recession that exposed an oversaturated clothing retail market in the U.S.

Uniqlo — the “Gap of Japan,” as it's often been called — is targeting these same cash-strapped consumers in the U.S. Yet by all appearances, it seems to be thriving, expanding where Gap is retreating.

In addition to the Fifth Avenue location, which opened to the public at noon today, Uniqlo next week will open a another store in New York's Herald Square. While that will make for only three Uniqlo locations in the U.S. so far, the retailer aims for 200 stores and sales of $10 billion here by 2020.

How could such similar companies be experiencing such different realities? The still-shaky economy may be one culprit. Still, Gap has contributed to its own downfall, changing its popular logo and firing its design chief over lagging sales.

Perhaps Gap should pitch itself as the “Uniqlo of America"?

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