Saturday, May 31, 2014

Tadashi Yanai

How he started

Tadashi Yanai was born on February 7, 1949. He is the founder and president of Fast Retailing, of which Uniqlo (unique clothing) is a subsidiary and Japan’s biggest retailer. He is the second richest man in Japan, and in 2014 was ranked 45th richest man in the world according to Forbes, with an estimated net worth of $17.9 billion. Yanai attended Ube High School and later Waseda University, graduating in 1971 with a Bachelor's degree in Economics and Politics. In 1984, he opened his first Uniqlo store in Hiroshima.

        Tadashi Yanai’ father was a construction company boss in his native Yamaguchi prefecture, near the Southern tip of Japan. Yanai took over some tailor shops his father had started and in 1984 pioneered a move out of the saturated business suit market and into informal clothes. In the early 1990s he found it difficult to find qualified staff; frustrated by his inability to get bank loans, he decided to go to the equity markets. When Fast Retailing went public in Hiroshima in 1994, officials at his main bank, the Hiroshima Bank, complained to him, “We are being forced to become shareholders in a shoddy company.” Today his bankers suck up to him, and Fast Retailing is flooded with job seekers.

Secret’s of success

        Yanai has done Japan’s trade surplus and in pushing down consumer price index by short-circuiting Japan’s  tangled distribution system and selling high-quality clothing at less than a third of the price that Japan’s long-suffering consumers were won’t to pay. He sends highly trained Japanese craftsmen to China to teach that fast-developing country Japan’s best production technology and latest styles. For example, Japanese textile craftsmen, who underwent long, traditional apprenticeships only to find themselves unemployed, have been sent by Fast Retailing to China to train select Chinese workers in Japanese spinning, dyeing, weaving and other techniques that provided impetus for much of Japan’s postwar economic growth.

        This is another example of powers of specialization and outsourcing. Fast Retailing owns no factories in China. It merely designs the clothing, provides the training and manages the quality control. The trained Chinese workers, paid a twentieth of Japanese wages, then send the ultra cheap, Japanese-quality goods directly  to Fast Retailing’s retail outlets. The factories, usually with more than 1,000 employees each, typically specialize in only one type of clothing, so that they gain expertise others cannot compete with. The logistics are handled by Mitsubishi, Nichimen and Marubeni, three of Japan’s top trading houses.

In the April 2009 issue of Monocle magazine, Yanai said, "I might look successful but I've made many mistakes. People take their failures too seriously. You have to be positive and believe you will find success next time." In the year 2012, his Fast Retailing opened an 89,000-square-foot Uniqlo store in Manhattan, the single largest retail space on Fifth Avenue and the chain's largest worldwide. It paid $300 million for that lease. It followed this with an even bigger store in Tokyo's glitzy Ginza district; customers lined up for hours for the store opening in March. The company also owns the Theory and Helmut Lang brands.     

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