Gap vs UNIQLO - Japan's Version of "American Casual" Gives Insight To One Reason Why Gap Gains Because of UNIQLO and Not Rebekka Bay

I remember when I was General Manager of a fashion trends intelligence service where both Gap and Fast Retailing were clients and I had a first-hand observation of how Gap merchandisers in Japan see UNIQLO and vice versa.

The former claimed that the "disadvantage of UNIQLO is that one cannot create a total look with just UNIQLO, whereas Gap is about pulling together looks."

That was before Patrick Robinson came and left, and during a time when Gap was beginning to let go of prime real estate or shrink their floor space in prime real estate in Japan. It was also a time when it was obvious to those outside Gap that missing out on the skinny jeans boom really hurt, and their long lead times barely put Gap in the running for the second or third pairs of skinny jeans that a trend-conscious girl would buy. It was also a time when UNIQLO started appearing on the top of the "my favourite brands" list compiled by Japan's largest fashion industry daily, the Senken Shimbun, by asking fashion school students the question.

Fast forward six, seven years, and how ironic that Gap gains not because of creations by Rebekka Bay, but because of UNIQLO...

Personally, I had always been very surprised by how Gap chose to come to Japan with Gap first, and not Banana Republic when the latter's printed pocket T's were a much coveted item as "souvenirs from the U.S.," and their stretch cotton slim fit shirts were items to die for.

When Banana Republic finally landed here, and big banner ads popped up at Roppongi Hills, I felt it was too little, too late.

But then, the Japanese public is rather harsh on one of its favourite fashion statements, "the American casual style," because we have redefined the Japanese version of "American casual" to the point where true blue American casual brands really struggle.

J.Crew entered Japan in partnership with _the_ textile shosha (general trading company), ITOCHU, and even after securing a flagship store in the highly visible and heavy foot traffic locale of Harajuku, has had to retreat. Of course with 20-20 hindsight, it is easy to say that they had carefully taken every step in the wrong direction from their choice of partner to their merchandising and pricing.

Had they listened a bit to Yanai, Chairman of Fast Retailing, or even to another management guru, the founder of Kyocera, Kazuo Inamori, they would have taken to heart the importance of pricing as a "management issue" and not gone so off target.

And now that J.Crew is only available through online shopping and direct shipping from the U.S., it is a "hip" brand loved by fashionistas here...

Perhaps one of Gap's blind spots here is that their competition is not really the other American casual brands like American Apparel, who, by the way, is doing quite well, or even the fast fashion houses like Forever 21, who seems to be doing much better than the post-hype H&M.

And UNQLO was really only a part of the problem. While they refused to recognize UNIQLO as a competitor, they did see that if a consumer bout a pair of jeans at UNIQLO, they may be less likely to pick up a pair at Gap, too.

But the other part is that Gap's staples - the jeans, T's, and basic knits - are also the bread and butter in terms of profits for Japan's biggest names in select shops - BEAMS, United Arrows, Journal Standard, and so on. The private label basic T's by BEAMS and United Arrows that are purchased to go with the more designed imported items leave no room or need for a trip to Gap for the consumer.

The other iconic piece - the Gap white shirt, that is so touted by American fashionistas as a staple in their wardrobe, just doesn't have as big a place in the heart of their Japanese counterparts. I believe part of that is because of the "Y shirt" which is the uniform of the white collared workers here and whose word origin is said to be the "white shirt," is a formal item that people generally wish to move away from in their casual wardrobes. But when people need to do smart casual, men go for the Paul Smith or N.Hollywood versions that have a bit more "flair." As for women, those who choose shirts over blouses tend to shop at Margaret Howell or domestic brands.

So what is my personal take on what Gap can possibly do to gain in their own right (and not because FR may want to buy them)?

For Japan, I would comb through the entire range and look at (a) what the real profit generators are and (b) what are the popular pieces and if anything sits in both (a) and (b), do more of them. If there are (b) items that are not (a), then find out what are the attributes that make the times (b) and try to increase profitability. Yes, it is basic merchandising 101, but is it really being done?

Another thing is to harness the power of social marketing and create a hash tag like #gapfan if it is not yet there, and get fans to speak up about what their favorite pieces of the brand are, and so on. Run a contest - let the winner have the chance to win a Gap wardrobe or get featured in campaign or something. Let the social networking universe speak to the brand and for the brand. LINE is something they probably should try to harness here in that manner.

Yes, UNIQLO is doing a lot of that and more with UNIQLOOKS and the UNIQLO app and tie-up with SPUR and SPUR Online, but Gap should come up with their own version. Maybe they should also take a page out of Doc Marten's book and look into their tie-up with There are plenty of fashion snap sites here that they can run "spot the Gap" contests on...

Gap Gains on CNBC Report Speculating Fast Retailing Interest - Bloomberg