Uniqlo opened its first global flagship store in Manhattan’s SoHo neighborhood in 2006. If the deal is confirmed, the new three-floor Fifth Avenue location, about 100,000 square feet, would drawf the 36,000-square-foot SoHo flagship.
Uniqlo’s parent company, the Tokyo-based Fast Retailing reported 43% growth in first-half operating profit on Thursday, helped by strong sales at Uniqlo and raised the full-year outlook.
The budget retailer has been a rare success story amid a prolonged retail slump in Japan, with Uniqlo thriving in a weak economy with hit products like its “Heattech” underclothes line made of heat-trapping fabrics. Same-store sales at Uniqlo stores in Japan rose 13.1% for the company’s first half to Feb. 28, beating its own revised forecast of 11.2% growth. The company also has hinted it possibly will seek listings in other countries.
But analysts say the chain is facing tough hurdles for growth in the months ahead due to robust sales figures for comparative year-ago periods. Last week, Fast Retailing shares plunged more than 10% after it said Uniqlo same-store sales fell 16.4% in March, its biggest monthly drop in seven years.
The firm, which runs more than 900 Uniqlo stores worldwide, said operating profit came to $1.07 billion for the first half, up from $750 million in the same period a year earlier.
Several other retailers had been interested in the space, including TopShot, Nordstrom Rack and U.K.-based All Saints. Crains New York reported that the asking rent for the location had been $30 million a year.
Uniqlo is the latest Japanese retailer to make news in New York City. Last month, Takashimaya announced it would be closing its Fifth Avenue store. Muji, a Japanese retailer with a minimalist approach to apparel, accessories and home furnishings, already has three locations in Manhattan.