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Uniqlo to open first Canadian stores in 2016

A pedestrian strolls in front of renewed Japanese apparel chain Uniqlo in a Ginza shopping district in Tokyo, in this file photo.

Junji Kurokawa/AP

Just as U.S. discounter Target Corp. prepares to leave Canada, fast-growing Japanese cheap-chic fashion chain Uniqlo has announced it is setting up shop here.

Uniqlo will open its first two stores in Canada in 2016 in Toronto's Yorkdale Shopping Centre and the Toronto Eaton Centre, the retailer and malls announced Monday morning.

Since opening its first store in Japan in 1984, Uniqlo has grown to become a worldwide chain with more than 1,500 stores. Known for stylish and affordable designs, it is in 17 global markets with Canada being its 18th.

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"We embrace this milestone as an important step in the growth of our brand," said Larry Meyer, chief executive officer of Uniqlo USA and Canada.

The announcement of Uniqlo's foray into Canada, an open secret for months, comes just as discounter Target is shutting its 133 stores in Canada, a failed two-year expansion into this country. It suffered from coming into Canada too fast with too many stores all at once, as well as a poor supply chain and a perception that its prices are too high. Uniqlo will inevitably try to learn from Target's missteps.

Jeffrey Berkowitz, president of retail specialist Aurora Realty Consultants Inc., which advises Uniqlo on store locations in Canada, said the Japanese merchant is looking to enter Canada much differently than Target did in 2013. He said Uniqlo plans an initial slow entry into Canada to help understand the retail landscape.

"They're not looking at a mass approach," Mr. Berkowitz said. In the U.S., Uniqlo took the same approach, starting slowly and now ramping up more rapidly, he said.

Uniqlo's parent, Japanese clothing firm Fast Retailing Co. Ltd., is pushing quickly into new markets with a goal of becoming the biggest so-called fast fashion chain globally. Fast fashion retailer's take runway designs and copy them quickly for their own stores, at affordable prices.

Fast Retailing reported recently strong overseas sales at its flagship Uniqlo brand helping to boost quarterly profit more than its latest quarter.

Growth outside its home turf is key to Fast Retailing reaching its target of becoming the world's top apparel retailer ahead of Zara-owner Inditex SA, Hennes & Mauritz AB (H&M) and Gap Inc. in coming years.

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In September-November, the first quarter of the firm's fiscal year, overseas sales at its Uniqlo casual-wear chain jumped 47 per cent from a year earlier. That helped drive a 40-per-cent rise in operating profit to 91.4 billion yen ($763-million), beating the average estimate of 77.71 billion yen in a Thomson Reuters poll of four analysts.

The company left its operating profit outlook for the year through August unchanged at 180 billion yen, but suggested it may have grounds to lift that target in future after its quarterly results came in better than expected.

Overseas sales at Uniqlo, known for its HeatTech fabric technology and rainbow coloured-basics, were particularly strong in Asia, led by greater China and South Korea, Fast Retailing said. Still, the U.S. was a weak spot.

Uniqlo sales in Japan rose 12 per cent, with its HeatTech line, Ultra Light Down jackets and other winter items selling well.

Uniqlo Japan sales made up 48.5 per cent of Fast Retailing's overall sales during the quarter. That marks the first time they have accounted for under 50 per cent, as sales at Uniqlo overseas and other brands, including Theory, GU and Princesse tam.tam, accelerated.

With files from Globe wire services

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More


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