Uniqlo Made a Bet on Comfortable Bras. Now It’s Paying Off

(Bloomberg) -- A years-long bet on comfy bras and underwear has paid off for Japanese fashion retailer Uniqlo, as shoppers gravitated toward functional basics during the pandemic in a trend that looks set to continue in women’s wear.

Uniqlo, part of Fast Retailing Co. and founded by Japan’s richest man Tadashi Yanai, edged out bra specialist Wacoal Holdings Corp. last year to become the top seller of women’s intimate wear in its home market after doubling its market share in recent years, according to Euromonitor.

That came alongside broader gains made by Fast Retailing during the pandemic, which surpassed Zara owner Inditex SA as the most valuable clothing retailer in the world for a few weeks in February thanks to its focus on basics like sweatpants and T-shirts, as opposed to fast fashion.

Much of the success in underwear was the result of Uniqlo’s decision to double down on producing wireless bras as early as 2011, years before a global shift toward more comfortable styles including sports bras and bralettes took hold. The decision was validated during the pandemic as even more consumers sought out comfort and value which further displaced wire bras.

The success means Uniqlo is now positioned to be a big player in women’s underwear, a rarity among apparel giants such as Zara, which have not focused as much on undergarments as it is a complex and fragmented sector.

“Underwear has become a very important product for Uniqlo’s brand image and for the company to communicate the functionality of its clothes,” said Takahiro Kazahaya, an analyst at Credit Suisse AG in Tokyo. “When a T-shirt’s quality has improved, that’s hard to show. But it’s easy to convey small upgrades in a bra.”

Retail trends during the pandemic also show that there’s continuing demand for wireless bras. In the U.S, bra sales fell 1% in the second half of 2020, compared to 19% for the overall apparel industry, according to New York-based market research firm NPD. However, sales of wireless bras were up 14%.

‘Toyota of Apparel’

Uniqlo’s success in the bra segment is all the more surprising given that many general apparel companies don’t like to dabble in intimate wear due to the cost and time needed for product development.

In Uniqlo’s case, however, bras complement its reputation as a purveyor of unfussy, nondescript clothing such as fleeces and down jackets, with the brand coming to be regarded as the “Toyota of apparel,” said Michael Causton, an analyst at Tokyo-based research firm JapanConsuming.

The company’s executive in charge of the segment told Bloomberg that Uniqlo has been innovating around bras since the early 2000s, when it saw a “huge demand for high-quality intimate apparel with a reasonable price.”

Based on that criteria, the brand set out to create a bra that could match up to one of Uniqlo’s flagship products -- its HeatTech thermal wear -- in popularity, said Kanoko Takenokuchi, a director in the women’s intimate apparel product development team.

While the company dabbled in different types of bras initially, now Uniqlo does not have any wire bras in its product line-up, Takenokuchi said. Instead, it’s continued to adjust and develop its flagship wireless bra, the 3D Hold, every year, for example by adding more sizes or altering the back clasp. One of the most recent upgrades were new bra cups made from a thin, foam-like material perforated with holes, allowing it to stretch to fit the wearer.

Having an innerwear line that can appeal to customers as a general apparel retailer also helps increase the amount shoppers spend per trip, and build brand goodwill, especially among women -- a group Uniqlo has further room to court, say analysts..

Comfort Sells

Founder Yanai has staked future growth for the brand overseas, though Uniqlo faces major challenges in replicating its Asian success globally.

The brand has historically struggled in Western markets -- its North America operations, which include the U.S. and Canada, hasn’t been profitable for at least the last five fiscal years. Geopolitical tensions could also roil its fortunes, with the U.S. disclosing that it had earlier blocked a shipment of Uniqlo shirts for violating an order that bars imports suspected to be produced by forced labor from China’s Xinjiang region.

It’s also unclear if demand for functional, comfy basics can be sustained as consumers in the U.S. and other major western markets emerge from pandemic restrictions. Underwear sizing may also be tricky, given more diversity in body shapes in the West.

Fast Retailing declined to disclose details on Uniqlo’s innerwear sales, but said the wireless bra was among the top 30 selling products in most of its markets. It’s also the fastest-growing product in the last decade within the women’s underwear segment, the company said.

Uniqlo managed to weather the pandemic due to profit growth in its Japan business in the last fiscal year and a strong geographic focus in Asia, where many countries managed to keep the coronavirus in check. Though sales decreased 12% in the 2020 fiscal year, Fast Retailing did not close many stores or conduct mass layoffs, unlike Hennes & Mauritz AB and Zara.

Andrea Caprotti, a 28-year-old game developer in Austin, Texas, says that Uniqlo’s wireless bras have become her go-to for working from home in the past year. She opts for them over bras from brands like Target or Old Navy due to Uniqlo’s quality, and though they do not give hold or support, “I think that’s what they are there for.”

“I think all women understand that wires are a necessity sometimes, but they really suck,” she said.

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