Disappearing Uniqlo, 18 Stores Closed in the First Half of the Year

18 Stores Closed in the First Half of the Year
50 Fewer Than Before the Boycott
Focus on Online Business with App Revamp

A notice announcing the closure on the 23rd is posted at the entrance of the Uniqlo Sillim Podomall store. (Photo by Im Chunhan)

[Asia Economy Reporter Seungjin Lee] Uniqlo will close three more stores this month. From January to March, it closed 15 stores, totaling 18 store closures in the first half of this year alone. Additional store closures are planned for the second half of the year.

18 Stores Closed in the First Half of the Year

According to FAL Korea, which operates Uniqlo, the Lotte Department Store Jeonju branch will close on the 13th of this month, the Hyundai Department Store Mia branch on the 20th, and the Sillim Podomall branch on the 23rd, sequentially. Uniqlo's store closures began in earnest following the boycott of Japanese products in 2019. This was compounded by the impact of COVID-19 last year, accelerating the closure of underperforming stores. After closing about 30 stores last year, Uniqlo shut down the Daejeon Homeplus Yuseong branch and AK& Suwon branch in January this year, as well as the Myeongdong Central flagship store, the world's second-largest flagship store.

In February, Uniqlo closed all stores located within Homeplus nationwide, totaling 10 store closures. In March, it ended operations at the Art Malling Jang-an branch and Wise Park Hongdae branch, which were once profitable stores. The aggressive closure of underperforming stores has significantly reduced the total number of stores. The number of stores, which was about 190 at the end of August 2019 before the boycott of Japanese products, shrank to around 140 at the beginning of this year. With the closure of three stores this month, the total number of stores will be reduced to 138.

Uniqlo is reducing the number of stores in the global market and focusing on transitioning to online. According to this policy, additional store closures are planned for the second half of the year. It is expected that at least 10 or more stores will be closed, leaving only about 100 stores remaining.

Finding a Breakthrough Online

After surpassing 1 trillion won in sales in 2015 and maintaining growth of around 10% until 2018, Uniqlo is experiencing a steep decline. According to Lotte Shopping's business report, FAL Korea's sales last year were 574.662 billion won, a 41% decrease compared to 2019. Compared to 2018, when sales peaked, it is about one-third. Last year's operating loss also increased about sevenfold to 12.91394 billion won from 1.86819 billion won the previous year.

Uniqlo plans to focus on its online business while reducing offline stores. It is strengthening online services by revamping its application for easier clothing shopping and offering online-exclusive products such as special sizes.

A fashion industry insider explained, "With the growth of existing domestic SPA brands like SPAO and TopTen, as well as the emergence of new brands like Musinsa Standard, Uniqlo's market position has significantly diminished," adding, "Uniqlo, which urgently needs management efficiency, is expected to continue its current management policy of downsizing offline stores and expanding online."