Tadashi Yanai, Retail Warrior

It is a busy Tokyo Saturday, September 1999, as the escalator rises to a floor of high fashion at Barney’s, carrying a young fashionable couple and their conversation is overheard: “ Have you seen the Uniqlo TV commercial? Uniqlo is so cool.”

That was a seminal moment, the beginning of a retail revolution in Tokyo, one that reverberates today from Harajuku of Tokyo to SoHo of New York to Oxford Street of London. This former suburban discount apparel shop suddenly burst onto the fashion scene as a new alternative to the elitism of cool with a message of a casual democratic style fit for all Japanese.

A chain of casual apparel stores with headquarters then in Yamaguchi Prefecture, about 650 miles to the west of Tokyo; Uniqlo was anything but “cool”. Its first store in Tokyo had just opened in Harajuku and suddenly after the commercials launched, Uniqlo sales people faced a long line of customers each day queing in front of the store before it opened. As it can only happen in Tokyo, the lines of people kept growing throughout the week.  A series of 30 second commercials by Wieden + Kennedy Tokyo, featured a wide array of Japanese, who talk about their personal lives, became an overnight sensation. The commercials each ended with a 1900 yen (approximiately $19 ) high quality fleece top available in 24 colors made exclusively by Uniqlo. It was the casual top that changed an entire industry.

The man responsible was Tadashi Yanai, the son of the founder, Hitoshi Yanai, who started the parent company in 1949, the year he was born. The retail business began originally as a menswear store, selling ready-made clothes including suits.  As a young man, Yanai would visit Barney’s N.Y. at its original location, downtown on West 17th Street and the similarities between the two companies as mens shops brought him to study the New York shop before it bcame an icon of high style. “At the time, they were simply a menswear store - they weren’t a full-specialty store yet at the time. So they were selling brands like Polo and Izod, and it was a great learning experience.” These trips to New York and Barneys gave Yanai the opportunity to study how they marketed and expanded their men’s products from suits to sportswear and later evolve into a full-fledged women’s specialty fashion store.

Japan is not known for its rebels, it is a society which has prospered by social and economic balance, preventing differences between people in a homogenous culture. The society does not naturally celebrate or nurture rebels...especially in business. Yanai, however, has a natural skill in walking the tightrope of chance. He is willing to take risks, big risks and he has the self-confidence to survive most failures. Uniqlo had failed once in London after its first big boom in Japan, yet Uniqlo relaunches in the city with two new shops on Oxford Street designed by Masamichi Katayama of Tokyo.

“I think I am a risk taker because business is all about risk taking. The greater the risk, the greater the possibility for profits.” said Yanai. When I asked him to give me an example of how he was a rebel, he referred his willingness to take a big gamble. Yanai responded, “ From fall/winter of 1991 to spring/summer of 1992...just one short year, I opened 33 new Uniqlo stores in Japan. From September 1991 to August of 1994, we had added 100 new stores.  Just 3 years earlier, we had only 22 stores in total.”

In 2007, at a dinner in his home, Yanai whispers a secret to me, “We are making a bid for Barneys.” When asked about the significance of Barneys, Yanai responded, “ Barneys is the symbol of New York. It is a gateway for fashion brands coming in from around the world into the U.S. market.” Ultimately, Isithmar, the investment firm from Dubai won the bidding war, after Yanai decided the price for Barneys had reached too high. But it served notice to the world that despite the recent extraordinary launch of the Uniqlo store in SoHo of New York, this man’s dreams were only just beginning. Both Wall Street and the fashion industry had thought the deal with Isithmar was virtually finished when Yanai suddenly dared to challenge the bid. The dreams of a true rebel can change the world but courage will always make the difference.

Tadashi Yanai is a very modest man, a leader in a country that is in dire need of visionaries with a sense of self-confidence and fearlessness. He is on the January 2008 cover of GQ Japan as one of the “Men of the Year.” He is chosen not simply because he is the top apparel retailer in Japan but for his willingness to put himself on the line. Yanai clearly has bigger goals in mind. The richness and comforts of Japan has created an aura of complacency, lacking the proactive spirit or ability to dream for the future. Yanai has created an organization that is not afraid to act boldly even if they may fail. His global aspirations and willingness to compete against the giants of his industry make him more than a merchant of apparel but one of ideas.

Kashiwa Sato, the influential designer who also has served as consulting Creative Director for the Uniqlo global branding projects, says of him,” ...at a time when people fear change, Yanai-san is definitely a rebel. For the new generation, seeking a new way and new values, I think he is truly a pioneer.”

Yanai is not afraid to announce his goals, they make him even more determined. What sets Yanai apart from many other Japanese CEO’s is his clarity and directness. He knows what he wants and dares to share his personal dreams.

“I want to be number one in the world...to be bigger than the Gap.” This was a quote of his from an interview I did with him several years back. I asked him if the quote was indeed correct and still relevant. With his boyish smile, he acknowledged this personal challenge to himself and his organization. (He repeated it in the recent GQ article) “ Yes, I think it is only part of our human nature that we want to be the best in something or another. We are a manufacturing company and when it comes to being number one, it is still the Gap or H&M. If we say we are fine being third after the Gap and H&M, people would be content. So we have to try to be number one.” “But becoming number one doesn’t mean we have to do the same thing as Gap or H&M is doing. I think it has to be something different and to become number one by having a different position.”

”I think we learned about our position in the U.S. marketplace more through the new SoHo flagship store. We need to continue with the idea that Japanese products equate to good product quality. I don’t think we have any tradition in fashion so we have to compete in the area of quality.” When I asked him about his vision for the future, he replied, “Right now, Uniqlo is brand that represents Japan. In 10 to 15 years, I do think it would be nice if we were a brand that represents Asia and be more of a global brand.”

Some critics might say it is easier for a founder’s son and current CEO to be the risk taker in Japan. However, true to his spirit, Yanai challenges everyone that works with him to use their intuition and intelligence. “My recommendation to every member of our company is take your risks after deep thinking.” Conversely, he doesn’t have much faith in the political process and the ability of Japan’s politicians to take similar risks.

“Unfortunately, Japanese people depend on politicians to make changes and we expect them to do something about everything. But, I think we must change the world without the politicians. We must do it as individuals and private companies.”

Yanai is a very global minded person. His thoughts for Uniqlo often reflect his wish for his beloved country. “I’d like to see Japan more open and become a freer country. We must accept foreign culture and foreigners from the core. We still have a close-minded culture.”

Yanai has made a career of being a rebel and his willingness to go against conventional wisdom in his culture is a hallmark of the man. But a true leader will naturally be rebellious. In so many ways, he is younger than his staff, at least in spirit and competitive streak. “In terms of youth culture, I think we are leading the world, but in terms of the country as a whole, it seems like it is getting older and weaker.”

“Young people are too comfortable, They think it is not cool to take on challenges or to fight for something. I think the younger generation is forgetting that it is good to fight and to challenge yourself.”

Tadashi Yanai...a rebel with a cause and a dreamer by example.