Uniqlo China Recovers Performance with Store Closures and New Openings: Data Utilization as the Key

Fast Retailing announced on July 9 its third-quarter financial results for fiscal year 2026, revealing a clear recovery in the performance of Uniqlo in mainland China. Sales have resumed growth, profits have seen double-digit increases, same-store sales have risen, and e-commerce (EC) revenue has also maintained double-digit growth. What is noteworthy is that this strong performance was achieved despite a reduction in the number of stores.

Uniqlo China reached a peak of 926 stores as of the end of August 2024. However, over the subsequent two years, the number of stores dropped to 871, a net reduction of 55 locations. While the decrease in the number of stores might suggest contraction, according to a report by Huxiu (涌流商業), the company has adopted a “closure and new openings” strategy. It has been closing small, low-productivity stores and focusing its resources on flagship and larger stores in key commercial districts.

Data-Driven Portfolio Restructuring

Uniqlo China’s transformation is not merely about cutting costs. The company has reevaluated its entire store portfolio based on data, selecting locations based on metrics such as sales efficiency and full-price sales capabilities. While Chairman Tadashi Yanai once envisioned a long-term expansion to 3,000 stores, Fast Retailing is now meticulously assessing which stores are worth keeping open.

The results of this adjustment are evident in its flagship stores. The City Flagship Store at Changsha Wuyi Square, which opened in September 2025, spans over 2,000 square meters across three floors, and its post-opening customer traffic exceeded expectations. The company has positioned this store as a representative example of its global flagship stores, alongside those in Melbourne, Manila, and Singapore. Flagship stores in Wuhan, Xining, and Chengdu have also adopted similar reform models, with monthly sales at some stores that underwent closures and new openings reaching approximately 1.5 times their previous levels.

Systems Supporting “Individual Store Management”

The more profound transformation lies in Uniqlo China’s management system. Historically, the company expanded using a standardized chain replication model led by its headquarters. This model involved rapidly deploying similar products, displays, advertising, and promotional rhythms across different cities. While this approach worked well when shopping malls attracted steady foot traffic and brand awareness was on the rise, it became less effective as the diversity of the Chinese market increased.

For instance, while South China might demand short-sleeve shirts, Northeast China could require winter clothing at the same time. Consumers in Tier 1 cities are sensitive to design and new products, whereas those in lower-tier cities prioritize price. By fiscal year 2025, Fast Retailing acknowledged that half of its challenges stemmed from external market conditions, while the other half was due to its own rigidity.

The company now expects store managers to play a more entrepreneurial role. Individual stores are tasked with adjusting their product offerings based on local weather and customer preferences, predicting which sizes, colors, and categories will sell better. The headquarters has shifted from issuing top-down directives to supporting stores’ decision-making through data, supply chain, and inventory systems.

This transition to “individual store management” places high demands on the organization and its personnel. The core of Uniqlo China’s growth now hinges on whether it can adequately develop store managers capable of meeting these requirements.

Integration of Weather Data and Inventory

Management

The apparel business is heavily influenced by temperature fluctuations. Seasonal products such as HEATTECH, down jackets, sun-protective clothing, AIRism, and linen are particularly affected. A delay of just a few weeks in the onset of winter can directly impact inventory and markdowns. Fast Retailing cited abnormal weather as one of the reasons for the decline in sales and profits in mainland China in the second half of fiscal year 2024.

The integration of weather data with sales data is a critical application in retail technology. By cross-referencing temperature trends with past sales performance, the company aims to optimize the timing of product launches in different regions. By combining autonomous decision-making at the store level with headquarters’ data analysis, Uniqlo has been able to curb excess inventory and discounting pressures. Although sales in the Greater China region decreased by 4% year-on-year to 650.2 billion yen in fiscal year 2025, operating profit fell by 12.5% to 89.9 billion yen. The improvement seen in the latest quarter can be attributed to the successful implementation of technology and store optimization strategies.

Double-Digit Growth in E-Commerce and

Brick-and-Mortar Stores

Uniqlo China’s e-commerce business has continued to grow at a double-digit rate. Parallel to the reduction in physical stores, its online channels have expanded, signaling progress in its omnichannel strategy. Physical stores are increasingly taking on a showroom-like role while e-commerce serves as the primary platform for transactions.

China is no longer the sole engine of overseas growth for Fast Retailing’s global expansion. While Western markets and Southeast Asia have emerged as new growth hubs, the focus in China has shifted toward maintaining stable profitability rather than rapid expansion. Unlike in the past, current growth is not driven by a dramatic rebound in consumer spending. Instead, it is the result of closing unprofitable stores to reduce fixed costs, refining inventory management to limit markdowns, and improving gross margins.

Editorial Opinion

In the short term, Uniqlo China’s “closure and new openings” strategy is likely to influence other foreign apparel brands. China’s retail market is grappling with an oversupply of malls and changing consumer behavior, signaling a shift from store count expansion to prioritizing per-store productivity. The integration of data analysis and store operations is expected to become an increasingly critical source of competitive advantage.

From a long-term perspective, Uniqlo’s case highlights the direction of technology adoption in the retail industry. Transitioning from a standardized chain replication model to a locally adaptive “individual store management” approach necessitates digitalization in supply chain systems, inventory management, and talent development. If successful, this transformation could serve as a model applicable to other retail industries. However, balancing operational autonomy at the store level with brand consistency remains a challenge, and the availability of qualified personnel could become a growth constraint. The Editorial Board believes that it is critical to monitor whether Uniqlo China’s performance recovery is truly driven by technology investments or merely the result of cost-cutting measures. Sustained growth will depend on continued investment in data infrastructure and improving the operational maturity of on-site management.

References

• ” 优衣库中国的关店式增长 ”, by 涌流商业 — 虎嗅网, 2026-07-12T22:38:52.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4874682.html?f=rss