Gu: What you need to know about Uniqlo’s trendy sister brand as it plans to ‘go global’

Uniqlo stole the hearts of shoppers across the globe when its iconic round mini shoulder bag went viral on TikTok last year. But shoppers far and wide turn to the brand for a range of wardrobe essentials all year round.

Fast Retailing – Uniqlo’s parent company – has not seen sister brand Gu attract the same level of attention outside of Asia. But all that could be about to change. 

“Gu has the same potential as Uniqlo,” said Fast Retailing chief financial officer Takeshi Okazaki in an optimistic interview with Bloomberg. “We can generate as many Gu stores as there are Uniqlo ones.”

With a considerable increase in revenue and profit in financial year 2023, Gu’s revenue jumped 20% to reach ¥295.2bn (£1.47bn), while operating profit soared 56.8% to ¥26.1bn (£130m). 

According to the retailer’s website, Gu’s outlook for this year is to “go global”, after recently confirming plans to open its first store in New York City. The fashion giant is confident in its success outside of Japan.

Gu who? 

Having opened its first store in Japan in 2006, Gu is a fashion brand designed to offer “greater affordability” in the form of “elevated basics”, compared to the slightly higher price point of Uniqlo.

Gu found its name from the Japanese word ‘jiyu’, which translates to freedom or liberty. 

With a focus on its product development to stand out from the crowd, Gu is focused on understanding “mass-trend products”, which then develop into “global hit items”, in a similar way to other trend-led players such as Shein and Cider.

On a mission to gain the attention of trend-obsessed Gen Z shoppers, the younger demographic is certainly Gu’s target and it’s the preferences of these shoppers that will ultimately determine its success.

What and where does it sell? 

Gu’s headquarters are in Minato, Tokyo, and as of February 2024, it had a total store estate of 468. The majority of its stores are in Japan as well as other parts of Asia including China and South Korea.

But with four global flagships and 52 new store openings last year, it’s all go for Gu.

While it says that Japan still “harbours plenty of opportunity”, Gu has been trialling a pop-up format in New York since the end of 2022, which it says has been “bustling with customers”.

In a bid to experiment with its localisation and product mix, Gu is ready to launch permanently in the US and has plans for launching a store and online to US consumers this summer.

Known for its quality basics, customers can buy a pair of Gu’s signature jeans for ¥990, equivalent to less than £5. Keeping its broad appeal, Gu offers a range of products across womenswear and menswear in sizes XS to 3XL, as well as childrenswear and baby products. 

Rated ‘it’s a start’ on the sustainable and ethical fashion brand ratings platform Good On You, Gu is building a relatively reliable reputation when it comes to transparency across its policies and practices.

Reaping the rewards of Uniqlo’s solid reputation worldwide, the path is already laid out for Gu as it follows in the footsteps of its sister brand’s success to date.

Next steps

In a global fashion market that’s as competitive as ever, standing out from the crowd may prove hard for Gu. However, it is keeping up with its rivals such as Shein, Cider and Boohoo by offering rolling discounts and incentives to keep shoppers keen.

At the top of Gu’s website it says: “If you make a purchase during the sale period, you will receive a 1,000 yen coupon that can be used later.” And with a Disney collaboration also being advertised across its children’s section, Gu is certainly switched on when it comes to knowing what consumers are after. 

While Gu is yet to respond to questions regarding its potential in the UK and other markets, it would be fair to assume that this is one of the next steps of its “go global” strategy.

Leaning into Uniqlo’s multi-brand strategy, demonstrated by its in-store tie-up with fellow Fast Retailing brand Theory,  Gu could pop up in existing Uniqlo stores in the UK as a trial to keep costs down.

GlobalData apparel analyst Louise Déglise-Favre says making it crystal clear to consumers that Gu has a differentiated price point and proposition to Uniqlo will be essential in its success if that is its next move.

She says: “I don’t necessarily think it should expand to the UK because Uniqlo is doing so well it could cannibalise itself by releasing the trendier and more affordable version of the same brand. 

“I think they would need to make the marketing quite different and target a different, younger audience. They could go towards the customer of Bershka for example, rather than that of Zara that Uniqlo already competes with.”

While it is easy to assume the biggest threats to Gu remain the trend-led likes of Shein, Cider and Boohoo, Déglise-Favre says it is another fashion retailer that poses the biggest barrier to entry.

Highlighting Primark as a leader in the value fashion space, she adds that it will take a lot of convincing to encourage people to switch from a beloved brand to a new one they haven’t heard of before.

However, as Fast Retailing continues to go from strength to strength in the UK and across the world, the competition is unlikely to stop it in its tracks and Gu is certainly one to watch.