Azrieli Group Ltd. (TASE: AZRG) is attempting to bring Japanese casual fashion retail brand Uniqlo, a favorite of Israelis traveling overseas, to one of its main shopping malls in Israel, sources inform "Globes."
Azrieli CEO Arnon Toren and others in the company recently met with representatives of Uniqlo, a subsidiary of the Fast Retailing corporation. As far as is known, the feasibility of having Azrieli bring the Japanese brand to Israel by either holding the Uniqlo Israel franchise itself or as a supplier of real estate to the Japanese network is being considered. It is believed that Uniqlo prefers working directly, rather than through a franchise.
Azrieli said today in response, "Azrieli Group is frequently contacted by leading retail concerns around the world interested in the Israeli market. The group does not report its business measures or meetings with various parties to the media."
Azrieli said recently in response to a previous report that it was "diversifying the mix and expanding the range of stores in its malls, including through the entry of international chains" and that it was "considering business opportunities in these areas from time to time, among other things in view of queries received from a selection of leading international brands."
Huge demand
The direct effort by Azrieli Malls is being made as a result of momentous changes taking place in the retail and commercial real estate market in Israel. "Globes" recently reported that after many years of progress in Azrieli's malls in leasing space to local and foreign chains and working with the fashion chains themselves and with local franchise holders of international brands, Azrieli has begun to consider the option of independently importing fashion brands. The contacts with Uniqlo are apparently part of this effort.
If Uniqlo does enter Israel, it is likely to be a very important step, because the brand is especially popular among Israelis, with a high level of awareness in the Israeli market, even though the brand has no local stores. The brand's jackets are identified with former generals and army officers in combat on the battlefield as a kind of field uniform.
Uniqlo was brought to Israel last year through parallel imports. Terminal X, an ecommerce website controlled by the Fox group, announced the sale of Uniqlo products when the website went on the air. The products sold out rapidly. When it was launched, Shufersal's American Outlets ecommerce website announced the Uniqlo's product could be purchased on the website. Demand for Uniqlo's products when the brand is launched in Israel is therefore likely to be huge.
Business futurist Adi Yoffe says that Israelis are very fond of the Japanese brand because "Uniqlo is a brand associated with real innovation. This company is known for its technology for producing thin and warm jackets. It is not a mere fashion item; it is connected to values of innovation and progress."
Stylish spaces
Uniqlo's branches overseas feature large and carefully styled spaces covering several floors with a special design. The company has a unique inventory policy at its branches, and even special training for folding its clothes.
Uniqlo was founded in Yamaguchi in Japan in 1949 as a textile manufacturer. The company controls the chain from production to distribution, marketing, and retails sales. Its shares are listed on the Tokyo and Hong Kong Stock Exchanges at a market cap of over $50 billion.
Uniqlo opened its first store outside Japan in 2001. The Uniqlo chain is the group's main branch, and accounts for the lion's share of its global sales. The company's sales outside Japan outstripped its sales in Japan in 2018 for the first time. Uniqlo wants to become the world's best-selling fashion, a title that currently belongs to the group that operates the Zara chain.
Uniqlo's parent company is projected to report a sales turnover of over $20 billion in 2019. The company has extensive activity in its home country of Japan, China, Hong Kong, Taiwan, South Korea, and other countries in Southeast Asia and Oceania, and is also planning to increase its business in India. Uniqlo also has stores in Europe and North America, and is entering new countries.
Japanese retail chains Daiso Japan and Miniso, which sell mainly home products and accessories, opened stores in Israel in the past year. If and when Uniqlo comes to Israel, it will be the most significant entry of a Japanese chain into the local market, and is likely to arouse a storm, as have other international giants who came to Israel, among them Spanish fashion chain Zara, Swedish furniture chain Ikea, and Swedish fashion chain H&M.
Published by Globes, Israel business news - en.globes.co.il - on March 28, 2019
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