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Fast Retailing Co.’s Tadashi Yanai, who establish his father’s tailor shop into Asia's largest clothing retailer and along the way became Japan’s wealthiest man, is marching up his push into the U.S. market.
The Japanese owner of Uniqlo is in discussions about a possible acquisition of J.Crew Group Inc., the U.S. retailer possessed by TPG Capital and Leonard Green & Partners LP, two people with knowledge of the matter stated last February 28. The transaction may be worth at as much as $5 billion, one of the people said earlier last week.
Yanai, 65, has stated that he wants to turn Fast Retailing into the world’s largest clothing retailer, a target made all the more challenging by Japan’s decreasing population. To reach that goal, he’s trying to establish the low-priced casual wear firm into new markets, hiring executives from global retailers and weighing acquisitions to bolster overseas sales and complete with Zara owner Hennes & Mauritz AB. Inditex SA.
“Uniqlo has expanded overseas by opening stores and acquiring and absorbing businesses that have designing power and brand image,” said Mikihiko Yamato, deputy head of research at JI Asia in Tokyo. “Having J. Crew would help as it’s the brand people know and that can attract a lot more customers than doing it alone.”
The firm based in Yamaguchi aims on increasing overseas Uniqlo sales to higher than domestic revenue by the year ending in August 2016. Its goal is to quadruple receipts to achieve 5 trillion yen ($49 billion) by 2020 with a fifth coming from the U.S., Chief Financial Officer Takeshi Okazaki said in Hong Kong last week.
English, M&A
J. Crew’s negotiations with Fast Retailing are at an early stage and other possible bidders have also expressed an interest in the firm, a person with idea of the matter said. Buyout fund Advent International Corp. is also interested in J. Crew, two other people said. The U.S. retailer is measuring an initial public offering later this year, people familiar with the situation said earlier last week.
Aldo Liguori, a Fast Retailing spokesman, declined to comment regarding the deal. The stock sagged down as much as 1.4 percent to 34,550 yen in Tokyo, headed for the weakest mark since February 20. It relinquished 0.6 percent while the benchmark Nikkei 225 Stock Average decreased with 2.2 percent as of 10:51 a.m. local time.
As part of Yanai’s plan to develop Fast Retailing into a global firm, his firm utilizes English as an official language and employs international staff. Its several acquisitions involve the Theory brand sold in department stores including Nordstrom Inc. and Bloomingdale’s Inc.
Roadside Roots
The firm traces its roots to a roadside menswear shop that Yanai’s father started more than 60 years in the past in the city of Ube in Yamaguchi Prefecture, based near the western tip of the country’s main island of Honshu.
The son of a tailor and a housewife in southern Japan during the U.S. postwar occupation, Yanai started his career merchandising kitchenware and men’s clothing at a Jusco supermarket in 1971. After a year, he quit and joined his father’s business.
By 1991, he changed the name of his father’s firm Ogori Shoji to Fast Retailing, showing the apparel chain’s expansion technique. It soon became the fastest-growing retailer in Japan and later made Yanai Japan’s wealthiest person with a net worth of $17.6 billion today, according to the Bloomberg Billionaires Index.
Yanai is no stranger to tough decision-making. His book “Throw Away Your Success in a Day,” published in 2009, cites his move into vegetable stores in Japan in 2002 and losing money until he pulled the plug two years later. He expanded Uniqlo overseas in 2001, first to the U.K., and to stem losses ended up closing 16 of 21 stores about two years after opening them.
