Uniqlo is planning to open a majority of its upcoming stores in India in a smaller format in the range of 10,000-15,000 sq ft – compared to most of its current store sizes in the range of 20,000-35,000 sq ft – and the world’s third largest fashion brand has pruned the size of a large store in New Delhi, according to three people familiar with the development.

Uniqlo has slashed the store size in Vegas Mall in Dwarka by almost half to about 10,500 sq ft and reduced it from earlier version spanning two floors to just one floor.

A Uniqlo spokesperson said the company has no plans to reduce the sizes of any other existing store in the National Capital Region (NCR) where the company has all of its six India outlets.

“Our goal to provide Uniqlo and its LifeWear offerings to our customers remains strong and we will keep exploring appropriate opportunities to expand Uniqlo’s footprint further,” the spokesperson said in an email response.

One of the sources said sales at some of the Uniqlo stores do not justify the large areas the stores occupy.

“So, they are adopting a hub-and-spoke strategy of one large flagship store in a city with others being smaller stores,” said a person familiar with the development, talking about Uniqlo’s expansion plans. Now Uniqlo plans to open most of its upcoming stores in the range of 10,000-15,000 sq ft barring some flagship stores, sources said.

“Uniqlo operates stores to service its customers. As such, we choose our store size and locations based on the prospective needs of customers in a given area,” a company spokesperson said in an email response. “Our aim is to continue working closely with our partners, including developers, to create longstanding and successful endeavours that benefit the communities we operate in.”

Harminder Sahni, founder of retail consultancy firm Wazir Advisors, said Uniqlo’s plans could also be prompted by an uptick in online sales that generally got a boost during the pandemic.

“Brands are realizing that they don’t need to invest too much into the stores as they can push their products more online,” he said. “Stores can basically attract the customers and wherever they are viable they will keep large stores.”

For the fiscal year ending March 2021, Uniqlo India reduced net losses to Rs 36 crore from Rs 64 crore from a year ago. In fiscal year 2021 Uniqlo India reported income of Rs 239 crore, up from Rs 129 crore in fiscal year 2020, according to Registrar of Companies (RoC) data accessed by business intelligence platform Tofler.

Uniqlo is among a host of global retailers including Gap, Forever 21 and Aeropostale, among various other brands, to opt for smaller outlets after initially opening larger stores in India amid unjustifiable sales to their sizes.

Uniqlo entered India in September 2019, barely months before the pandemic hit in early 2020 and the country went on a months-long lockdown to curb the spread of the virus. Since December 2020, the Tokyo-based retailer has not added any outlet in India.

Next, Uniqlo is planning to open an outlet in Chandigarh and is also scouting for space in Mumbai, according to various mall executives.

Uniqlo counts India as its best future market where the company is competing with rivals including Spain’s Zara and Stockholm-based H&M.

In an interview with ET in June 2019, Tadashi Yanai, founder and CEO of Fast Retailing, which owns Uniqlo, said the Japanese fashion brand expects India to outpace China and its home country to become its largest market even though he said it will take about a decade for the country to ripen as a large market and a sourcing base for Asia’s largest fashion retailer.


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