The Strategist

Uniqlo considers leaving the US while Ivanka Trump clothing brand enjoys a renaissance of popularity

04/03/2017 - 16:30

Head of the Japanese manufacturer and seller of clothes Uniqlo Tadashi Yanai said that his company could probably leave the US market. He explained this decision by a new law, proposed by Donald Trump’s administration, which obliges all companies either to transfer their production to the US, or pay an additional tax.

GoToVan via flickr
GoToVan via flickr
Tadashi Yanai, CEO of Fast Retailing and owner of famous Uniqlo clothing brand, told the Japanese media that the retailer could wind down its business in the United States. The reason for this is desire of Donald Trump to force companies to establish their own production in the country. Otherwise, the business will be obliged to pay additional taxes. "If the relevant law is passed, then Uniqlo will immediately leave the US market", Mr. Yanai said. 

By now, Uniqlo has opened about 50 stores in the US, while Mr. Yanai said that he would like to increase the number by opening 20-30 new outlets a year. However, intentions of the US president can dramatically change the company's plans. "If they tell me directly, then I will immediately close the business in this country. We will not be able to produce good goods in the United States at prices acceptable to American customers", said Head of Uniqlo". And that means making business in the US will be meaningless".  

Uniqlo was the first non-American company that openly expressed dissatisfaction with Donald Trump’s programme to increase number of jobs in the country. Prior to that, representatives of various industries discussed the preparations with the US president during personal meetings or behind closed doors. Uniqlo's position is supported by other retailers as well. "If the new law is adopted in the form in which it is written now, then consumers will ultimately pay for it", Brian Cornell, Head of Target, warned. "Ultimately, it makes no sense to tell American consumers that now they have to pay more for the same clothes, shoes or household goods, in my opinion", told Kohl’s CEO Kevin Mansell. "We already know how a price hike affects sales in those categories of products with which we work - it reduces demand". 

In the meantime, clothing brand of Ivanka Trump, daughter of US President Donald Trump, reported on record sales volumes, despite calls to boycott the brand. This is reported by The Hill.

"Since early February, we have seen some of the best weeks [in terms of sales] in the brand’s history," said Abigail Klem, President of the Ivanka Trump brand. Specific figures are not given.

A number of retailers, Klem noted, noticed that clothes from the president's daughter became the most popular in online stores.

A month earlier, Ivanka Trump brand also announced growth despite criticism.

At the same time, a number of retailers boycotted sales of Ivanka Trump’s clothes and accessories, explaining this decision by "very weak sales". In particular, luxury stores chain Nordstrom published the results of the brand’s sales. According to reporting data, sales of clothing and footwear under the Ivanka Trump brand have collapsed by more than a third during the last year, showed 70% fall on the eve of the elections in the USA.

Despite this, aggregator on electronic purchases Lyst said that from January to February, Ivanka Trump brand’s sales grew by 346% and by 557% compared to number of orders for the previous year.

In general, over the past year, sales of Ivanka Trump products in the chain stores amounted to $ 14.3 million.