It is often said that global fame can only be achieved by first being king in one's own land. Uniqlo is no exception. The brand first established overwhelming dominance in the Japanese market before approaching China – the heart of its production hub – its second-largest market. Following a period of weakness in the Chinese market at the start of the decade, the group has successfully regained momentum through a triumphant international offensive.
Fast Retailing is expected to overtake H&M in terms of revenue during FY 2025/2026, with turnover projected at approximately €20bn, or JPY 3,800bn. This is still half the size of Inditex, which recently published its annual results. However, while the Spanish group has been particularly adept with its strategy, targeting "aspirational" consumers – middle-income clients attracted by luxury codes – Uniqlo's current positioning appears more advantageous. Indeed, in 2025, Zara's sales inched up just 1%.
This move upmarket, still underway at Zara, has certainly allowed the group to double its revenue in five years, but it also carries a genuine positioning risk. A customer truly seeking luxury will not go to Zara simply because a big name in fashion or luxury has signed a collaboration. Conversely, the retailer may end up alienating a portion of its historical customer base, largely drawn by price, in favor of a brand that, fundamentally, has not truly detached itself from fast fashion.
Uniqlo follows a different logic. With more timeless collections that are less dependent on trends, products stay on the shelves longer. The group is therefore mechanically less exposed to markdowns, which invariably erode margins.
Uniqlo represents consistency in simplicity. With lower prices, comparable perceived quality, and gross margins barely lower than Zara's, it is currently the only major generalist brand capable of attracting both financially pressured consumers and wealthier households, for whom the products are acceptable. This performance is also the legacy of a brand strategy built on proprietary technologies (Puffertech, AIRism, Heattech) that bolster loyalty. In the top 15 most valuable brands in 2025 – based on financial brand value – four players operate outside the luxury world: Nike ranks third, Adidas sixth, Zara has slipped to seventh, while Uniqlo and H&M stagnate at eleventh and twelfth places respectively.
From a geographical perspective, Europe accounts for 13% of Uniqlo's sales, while North America still represents only 9% of revenue and 3% of points of sale according to Bloomberg. This is where the bulk of the growth potential lies. The group explicitly presents its offensive in the European and American markets as one of its primary development engines. Since 2022, Fast Retailing has delivered consecutive annual growth of 30% to 50% in these two regions. Japan's share of sales has been melting away over the past few fiscal years, a trend expected to continue for several more years.
Penetrating the American market is undoubtedly the greatest test for Uniqlo. The group is not forcing store openings; instead, it seeks to make itself legible and desirable in a market radically different from Japan's.
The group's ambitious valuation, at 40x next year's earnings, reflects investor expectations regarding Western expansion. Japan provides a solid anchor, the Chinese market is finally regaining momentum with double-digit profit growth, and international potential remains immense.
In H1, the group improved its gross margin as well as its operating result by significantly reducing other selling expenses. The upward revision of operating profit targets communicated by the group for the fiscal year propelled the stock higher at the end of last week.
Suffice it to say, the group has the wind in its sails. The stock trades at a significant premium to its peers. Fast Retailing is trading at levels higher than players who are among the sector's most successful recent stories, such as Brunello Cucinelli, Amer Sports, or On Holding.
