Promoting "Extreme Value for Money," SPA Brands Overtake Gucci as Stores Fill Up

Fast Retailing Surpasses 32 Trillion Won in Annual Sales
The Golden Age of SPA Brands Amid Global Downturn

As the economic slowdown and inflationary pressures persist, the global fashion market landscape is undergoing rapid change. Consumers who once preferred luxury brands are now turning their attention to SPA (Specialty retailer of Private label Apparel) brands, which emphasize reasonable prices and quality. Following Fast Retailing, the parent company of Japan's Uniqlo, surpassing French luxury group Kering in annual sales last year, China's Shein has also entered France's luxury department stores, the home of fashion, signaling an unprecedented boom for SPA brands.

"Value Over Luxury"... The Golden Age of SPA Brands

Customers are lined up in front of a Uniqlo store in Tokyo, Japan, on June 19, 2020, waiting to purchase Airism masks. Photo by Yonhap News Agency

According to Japan's Yomiuri Shimbun on October 10 (local time), Fast Retailing, which operates Uniqlo, recorded annual sales of 3.4005 trillion yen (approximately 31.6369 trillion won) for the year starting from September last year, a 9.6% increase year-on-year. Net profit rose by 16.4% to 433 billion yen (about 4.0285 trillion won). Both sales and net profit reached all-time highs.

This figure surpasses last year's sales of Kering Group, which owns Gucci, Bottega Veneta, and Saint Laurent, at approximately 28.7 trillion won. As Gucci, which accounts for half of the group's sales, saw its revenue drop by about 20%, the group's overall sales decline became more pronounced.

Uniqlo's Domestic and Overseas Performance Rises Together... "On the Brink of a Global Boom"

A Uniqlo store in downtown Seoul. Photo by Yonhap News

Uniqlo, the core brand, showed strong performance both domestically and internationally. Uniqlo's annual sales in Japan grew by 10.1% year-on-year to 1.026 trillion yen (about 9.5254 trillion won), surpassing the 1 trillion yen mark for the first time. Overseas Uniqlo sales also hit a record high, increasing by 11.6% to 1.9102 trillion yen (about 17.7343 trillion won). While performance in China was sluggish due to a consumption downturn, growth continued in North America, Europe, Southeast Asia, and South Korea.

Sales in North America, including the United States, increased by 24.5%, and the number of stores grew by more than 20% compared to a year earlier. Uniqlo products sold in the United States are mainly produced in factories in Southeast Asia, such as Vietnam. Although the company expected to be hit by U.S. tariffs, it explained that it was able to absorb the impact through measures such as raising prices for some products and cutting costs.

Uniqlo projects that it will continue to break its own records for the fifth consecutive year in the 2026 fiscal year, with sales of 3.75 trillion yen and operating profit of 610 billion yen. Tadashi Yanai, chairman of Fast Retailing, expressed confidence, saying, "It feels as if we are on the brink of a global boom."

Shein and Zara Compete for Value-for-Money Dominance

Shein, known as the "Chinese Uniqlo," is also expanding its presence in Western markets. After recently entering the BHV department store in central Paris, Shein is now pursuing partnerships with traditional luxury department stores such as Galeries Lafayette. While some critics call this an "insult to the home of fashion," it is also seen as evidence of Shein's growing market influence. Inditex, the parent company of global SPA leader Zara, is also showing a rebound. In the first five weeks of the third quarter this year, Inditex's sales grew by 9% year-on-year, accelerating its growth trajectory.

Consumers Seek Value... The Waning Era of Luxury

Experts diagnose this trend as a shift in consumer spending standards from brand loyalty to practical consumption focused on value for money. As the economic slowdown and inflationary pressures continue, consumers are reacting more sensitively to "value for money" rather than brand names.With Chinese consumers, who account for 30% of global luxury consumption, tightening their wallets, the downturn in the luxury industry is likely to be prolonged.