Tadashi Yanai likes T-shirts. They're comfortable, anybody
can wear one and if you get a lot of people to buy them, you could become very
rich. Mr Yanai has been selling T-shirts for over 30 years and now has more
money than anybody in Japan. All because in the mid-1980s, the son of a suit
maker from Yamaguchi prefecture got tired of selling stuffy menswear and
created Unique Clothing Warehouse, better known as Uniqlo - the temple of
everyday clothing for everybody.
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The billionaire retail rebel
Jaime Ee
02 July 2016
Tadashi Yanai likes T-shirts. They're comfortable, anybody can wear one and if you get a lot of people to buy them, you could become very rich. Mr Yanai has been selling T-shirts for over 30 years and now has more money than anybody in Japan. All because in the mid-1980s, the son of a suit maker from Yamaguchi prefecture got tired of selling stuffy menswear and created Unique Clothing Warehouse, better known as Uniqlo - the temple of everyday clothing for everybody.
Mr Yanai is 67 now. A good age to be playing golf and counting his personal net worth, which Forbes estimates at around US$15 billion plus change. While other billionaires have seen a few zeroes lopped off their fortunes by the Brexit crisis, an extra US$500 million was reportedly added to Mr Yanai's pot.
Still, the only counting the founding chairman of Fast Retailing - the clothing group which owns Uniqlo - wants to do is the number of stores that he keeps opening around the world as part of a bigger plan for global domination. The latest tally: 846 in Japan; 449 in China; 388 in the rest of Asia including South Korea. Singapore alone has 24, including one that just opened in Tiong Bahru Plaza last week.
Uniqlo has had less luck in Europe and America, with just 44 in the US and 10 in the UK - the markets he really wants to crack. Which could be partly why he's boldly pledged to make Fast Retailing - which also owns brands such as Theory, J Brand, Gu and Comptoir des Cotonniers - the biggest apparel retailer in the world by 2020, with projected revenue of five trillion yen (S$65.6 billion). Which is triple the 1.68 billion yen it earned in its 2015 fiscal year.
It's hard to say if he thinks toppling the top three companies above him (Inditex, H&M and Gap) is achievable or if it's one of the many challenges he tosses at his legions of staff to keep them on their toes. For make no mistake - whimsical Disney T-shirts, Star Wars tie-ups, dazzling stores, cool designer collaborations and general Uniqlo enthusiasm aside - Mr Yanai is one tough taskmaster.
In Fast Retailing's vast headquarters on the 31st floor of Tokyo Midtown Tower, Mr Yanai cuts an imposing figure despite his compact structure. If Uniqlo exudes a relaxed lifestyle, there's little easy-going familiarity to be found between him and his staff, who seem to toggle between reverence and slight fear in his presence. Only his interpreter seems at ease with him, enjoying a rapport no doubt honed from years of simultaneously translating his words into English for the foreign media. He himself is adept at the language, but prefers to speak in Japanese to get his points across.
John Jay, the high profile creative director who worked on celebrated Nike campaigns before Mr Yanai wooed him over to Uniqlo in 2014, describes his boss as a rebel who doesn't follow the status quo. "He's not just different from other Japanese, he's different from everybody!"
For sure, Mr Yanai did not get to where he is today by following the footsteps of "salary men business leaders who are employees first and foremost who have climbed up the corporate ladder", he says. "Once their tenure is over, they're done."
Uniqlo, on the other hand, is Tadashi Yanai and vice versa - a business that he grew from scratch literally with his bare hands. As it grew, he took it through its different phases from a fast and cheap business model to what it is today, a technology-driven apparel company that creates Lifewear, or clothes to fit every aspect of one's lifestyle. The clarion call for the company is that it makes clothes for everybody, whatever their income bracket. And that it is nimble enough to respond to changing needs of the market.
"Going global was always our plan from the very start," says the straight-talking Mr Yanai. "We wanted to differentiate ourselves from Western brands. At the time, most Japanese people feared going abroad because it meant tapping into something they didn't know. But for me, I was just excited about the challenge."
Except that Uniqlo's first foray overseas turned out to be a horrible failure. The company opened 20 stores across Britain in 2001, only to shut them all down because nobody knew what this upstart Japanese clothier was all about.
Mr Yanai can laugh about it now, calling it "a devastating debut". But what went wrong?
"We made the mistake of hiring a local manager and empowering everything to his team. He came from a large company background and the first thing they built was a huge headquarters instead of spending on the stores. We built 21 stores in the two and a half years we were in London. We closed 16 stores. But of the five remaining, we grew the footprint to 10 stores and they are all highly profitable now."
Those stores are now managed by a team of locally hired managers and Japanese expatriates from the Tokyo head office and "they work hand in hand to create very good performing stores now".
The US market, however, is still a struggle. "We have over 40 stores now but stay tuned because we are introducing measures to totally revamp the business there."
Back in Asia, though, business is booming. "Partly because the countries are physically closer to Japan. There's cultural similarities because of Confucianism and also the body size is similar to Japanese. Caucasians are round like pillars. They have very thick arms, you know."
But while China, Taiwan, Hong Kong and Singapore remain the bread and butter markets, having a global reach is still his biggest goal. And his greatest task at hand is to build up a generation of leaders in the company that will "keep growing based upon my philosophy as the foundation".
In that sense, while Mr Yanai wants to be the biggest in the world, he also wants to impart the same values of entrepreneurship that he built up in the course of his career.
One of those values is not to be afraid of failure, which is anathema to the Asian family. In fact, when Uniqlo missed its financial targets for the last financial year after years of rising growth, it was the financial analysts who were more worried about it than Mr Yanai.
"Being ashamed of failure is something I disagree with. If everyone is successful in the business, everybody will go into it. But a lot of people fail. And they tend to give up when they do. But never give up. You have to challenge yourself to do it again and again and you have to explore why you fail. You have to analyse what you have to do to be successful in the second attempt."
Mr Yanai knows first-hand how failure can make a person stronger.
"When I was fresh out of college, I joined another company rather than my father's. After a year, I came back. There were seven employees working for my father then. When I joined, six of them quit. They thought, the son of the CEO knows nothing about the business but he comes back to join the company and he is so arrogant. And I was very arrogant."
He ended up doing everything himself with just one part-timer and the one full-timer who remained. He was selling suits, laying out merchandise, negotiating loans with the banks and even cleaning the stores. "But I learned everything about the business. It was a devastating failure but on the flip side there was the opportunity to learn and absorb everything. Not everything I did worked but at the end of it, it was eye-opening."
He feels so strongly about failing that he even wrote a book about it, along with a guide book on being a business leader that he originally intended as a manual for his employees but is now sold in bookstores.
"Many businesses want stability over challenge. Even if you talk to university graduates, they all want to work for the big powerhouses, the large corporations because they are looking for stability, but I do not believe these large organisations are always safe."
In fact, he is pretty critical about the state of Japan. "The future looks very gloomy, I'm afraid. The government is only about spending money, not making it. The bureaucrats are only interested in getting more votes. That's very bad from my perspective. It's not about the current administration. Whichever party you look at, they are alike. I hate bureaucrats and politicians."
Except for the late Lee Kuan Yew, whom Mr Yanai professes a deep respect for. "I wish he was still alive and kind enough to come to Japan and rebuild it."
He feels a strong affinity with Singapore, seeing similarities between it and his company. "Singapore is a newly built country. It's not natural-born, in that sense. So is Fast Retailing. I come from Ube, a mining town in Yamaguchi, which had nothing to do with fashion. But I was very interested in young people's culture and fashion in Europe and the US. I wanted to do the same in Japan. Just like Lee Kuan Yew went to Oxford and wanted to modernise Singapore."
He remembers visiting Singapore more than 50 years ago, "when there were jungles and snake charmers, no hot water and bugs walking on the ceiling of my hotel room". Now, "it's a jaw-dropping modern metropolis".
He spent his life doing the same with Uniqlo, going from just selling fleece jackets to creating a culture through clothing. And infusing a philosophy in his company to continue to create the best quality at the lowest price.
Although he is the heart and soul of the company, he does not believe that he needs to find a successor like himself. "If I pick someone like myself, this company might fail in the next generation. I'm a dictator. I am the owner of this business. The president, chief executive officer, everything. My strength, whether you agree or not, is that I have the capability to look at myself objectively from a third-party perspective. Unless you can do that, you run the risk of failing in the business.
"But this is not the model that future leaders of the company should follow. So my task is to shape a model of team leadership and multiple leaders and empower young people - that's my vision."
Until then, this powerhouse of a leader shows no signs of slowing down despite being at it for some 44 years. "I'm still excited because we are doing something new all the time!"
Ultimately, he says, the difference between success and failure is that "people who passively wait for the future to come will fail". Successful people, on the other hand, "are orienting themselves for the future and and working on today's tasks as well as the future's tasks, today."
And that is where Uniqlo and Fast Retailing is. Global domination, here it comes.
TADASHI YANAI
Age: 67
Married with two children
Bachelor of Arts/Science in Economics and Politics, Waseda University
August 1972: Joined Fast Retailing Co, Ltd
September 1972: Director, Fast Retailing Co, LTD
August 1973: Senior Managing Director, Fast Retailing Co, Ltd
September 1984: President & CEO, Fast Retailing Co, Ltd
June 2001-present: External Director, Softbank Corp (currently Softbank Group Corp)
November 2002: Chairman and CEO, Fast Retailing Co, Ltd
September 2005-present: Chairman, President and CEO, Fast Retailing Co, Ltd
November 2005-present: Chairman, President and CEO, Uniqlo Co, Ltd
September 2008-present: Chairman, Gov Retailing Co, Ltd (currently Gu Co, Ltd)
June 2009-present: External Director, Nippon Venture Capital Co, Ltd
November 2011-present: Director, Link Theory Japan Co, Ltd
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