Tokyo takeover: Fashion brand Uniqlo is about to take the British high street by storm

This week, they opened a flagship store in Paris; last month, a retail palace on Oxford Street. But it's just the start for the men behind Uniqlo, the fashion-pack's favourite chain. Johnny Davis travels to Tokyo to hear how they plan to blow Gap, M&S and Topshop out of the water

Tuesday evening and out on the shop floor, the fashion circus is in full swing. On a makeshift stage, a woman from a band you've never heard of is knocking out a tune on a xylophone. Jodie Harsh, the Hoxton drag queen, is holding court by the bar. Seb Chew, Lily Allen's ex, nurses an imported beer by the ladies' cashmere. Assorted members of shock-goth-rock band The Horrors look surly in men's denim. Earlier, Daisy Lowe DJed, playing records by Soft Cell and the Cure and dancing about with her hands in the air. Later, Dizzee Rascal gets 500 heads nodding those of Peaches Geldof, Isaac Ferry and Alexa Chung among them. Upstairs and down the capital's fashion pack mingle, availing themselves of black cod and asparagus hors-d'oeuvres and endless saki. It's all very fabulous.

Shop openings-cum-parties such as this are ten-a-penny on London's social circuit. What makes tonight's notable is hardly the attendance of the Delevigne sisters or the daughter of a Jagger or a Stewart, but rather the shop they have chosen to bestow that attendance on. This is the opening of a Uniqlo store, the "no logo" Japanese brand formerly regarded for its bargain packs of T-shirts, fleeces and socks the same high-street chain that beat an ignoble retreat from the UK in 2001 when it opened and shut 18 of 23 stores, a run of early closings that cost the company some 80m. Of the shops that did survive, you'd be hard-pressed to imagine Peaches Geldof or even Bob buying underwear there. "I had the same view of Uniqlo as lots of customers," says Simon Coble. "I wasn't overly impressed. There was a perception: it's that cheap Japanese brand." And that's Uniqlo UK's chief operating officer talking.

But times have changed. The three-floor, 25,000sq ft flagship store opening tonight is slap-bang in the middle of London's Oxford Street. What's more, the list of names involved in Uniqlo's relaunch reads like a who's-who of hip. Store design by Wonderwall, winner of 2007's Interior Design Firm of the Year. Creative direction by Samurai, the Tokyo-based studio that has won awards for its work for Issey Miyake, Xbox and Olympus. Limited-edition stock in the form of T-shirts by graphics legend Peter Saville, Klaxons stylist Cassette Playa and cult menswear designer Kim Jones. And a poster campaign featuring Primal Scream's Bobby Gillespie, Hollywood's Samantha Morton and fashion's super-stylist Katy England; all modelling Uniqlo clothes. "From Tokyo to London" read the inescapable banner ads across London's buses. '

In Japan, Uniqlo is a household name: its 750 stores making it the number-one fashion retailer in terms of both sales and profits. But it's never really done fashion with a capital F. "For years it's been where people go to buy cheap socks," is how Shoko Rudquist, a journalist who's lived in both Tokyo and London, puts it. "There's one on every corner." Now with its eyes on the rest of the world, Uniqlo has raised the bar. In a neat flip of the trend that sees western luxury brands compound their fortunes by heading east, Uniqlo has come here. And in style. In November 2006 it opened a 36,000sq ft flagship store on New York's Broadway. Last month, it was London. This month it's Paris. "The Uniqlo brand is being upgraded," says Tadashi Yanai, Uniqlo's sprightly 58-year-old founder and chairman and Japan's sixth richest man. "We used to open standard stores in standard locations towards a standard customer demographic with a standard product mix. Now we want all sorts of demographics. Fashion starts in New York, London and Paris. From there we spread to the rest of the world."

He's not kidding. Yanai has declared his intention for Uniqlo to become the world's foremost casual-clothing retailer by 2010. Bigger than Gap, H&M or M&S. To aid in his quest, his Fast Retailing (Uniqlo's parent company) has recently embarked on its own shopping spree: one that's seen it acquiring Helmut Lang, snapping up French lingerie brand Princess Tam Tam and, most audaciously of all, putting in a 450m takeover bid for Barney's, the venerable Madison Avenue department store. (A bid that ultimately failed.)

"The competition is just beginning," Yanai has said. "It will be great fun for everyone. The fittest will survive."

All of which would be so much corporate chest-beating had Uniqlo not seriously upped its fashion game. Over the past year, its affordable-but-stylish basics have started to win plaudits everywhere from Vogue and i-D to the quality press fashion pages and back again, style editors falling over themselves to praise the new 19.99 Kaihara denim and 39.99 Pantone cashmere lines and raving "When did Uniqlo get so good?" Uniqlo's inexpensive cashmere has proved such a hit, this newspaper was even moved to suggest it was responsible for fuelling 2007's London moth epidemic.

While the rest of the high street sticks with its formula of high-speed catwalk knock-offs, increasingly tenuous celebrity tie-ins and khaki, Uniqlo is happily doing its own thing. In bolder colours, with better quality and at cheaper prices. Your clothes don't define you, it seems to be saying. You define your clothes. "That's exactly it," says Coble. "A lot of people are doing all those other things, so therefore what's different about us doing it? Nothing."

There's no better example of Uniqlo doing things differently than its UT T-shirt store in Harajuku. Surely the trendiest shopping district on the planet, the Tokyo suburb is home to teen tribes recently immortalised in song by Gwen Stefani and labels such as Billionaire Boys Club, the absurdly au courant streetwear brand overseen by the music producer and entrepreneur Pharrell Williams. When I visited one afternoon last month, Uniqlo's UT store was packed with well-groomed twentysomethings browsing the hundreds of limited-edition T-shirts it sells packaged in plastic tubes not dissimilar to those you'd buy a set of tennis balls in. The shop opened in April, and along with a five-storey flagship store stocking the full Uniqlo range on Ginza, Tokyo's Bond Street equivalent, it represents another bold step up for the brand formerly regarded as a basics-only proposition.

Across town in the minimalist wood-and-white offices of creative studio Samurai, founder Kashiwa Sato the brains behind the UT concept store explains his vision. "Uniqlo had huge success but as it grew in size it got to the stage where its focus was somewhat blurred," the 44-year-old says. "I was invited by Mr Yanai to be part of the team for Uniqlo's global expansion. They wanted to redefine the brand."

There's a simple marketing model that suggests brands can be built by first wooing "key opinion formers"; the fashion-conscious youth demographic that will then act as ambassadors and spread the word. Sato makes no bones that this was exactly his plan. "You don't succeed by just growing bigger. To relaunch a brand it is important to start with a young audience," he says. "The UT store was designed to attract edgy people. More fashion-forward."

"If you can succeed in Harajuku you can succeed anywhere," says Yanai the following day. "People in Harajuku are always creating new trends. The developments in Harajuku are closely watched around the world." Sat in the boardroom on the fifth floor of Fast Retailing a stone's throw from the Imperial Palace, Yanai had spent the morning being interviewed by R30, Tokyo's equivalent of Friday Night with Jonathan Ross. Richard Branson-like, he had advised any viewers doing badly at school that it was still possible to achieve great things and enthused over Uniqlo's London opening, an event that's been greeted with much interest in Tokyo.

Uniqlo was started by Yanai's father, Hitoshi, in 1949. Back then it was a warehouse selling other people's clothes. But, dissatisfied with the quality of some of the goods, the Yanais adopted the "SPA" "speciality store and retailer of private label apparel" strategies of Gap, meaning it would make its own clothing and sell it exclusively. The first Unique Clothing Warehouse "Uniqlo" opened in Hiroshima in 1984. "I was around 35 and it was one of the most exciting years of my life," Yanai recalls. While plenty of stores offered high-quality clothing and plenty more offered cut-price clothing, the Yanais' brainwave was to try and combine the two. "I can still remember the opening day: 6am, 2 June. The advertising said '50,000 items of clothing for 1,000 yen' [back then, about 2.50]," Yanai continues. "When the store opened we were bombarded. The first two days they had to limit the entry because so many big crowds were running towards us."

A long-time admirer of Marks & Spencer in the UK and Gap in the US, Yanai's bid to take Uniqlo to the global market began in earnest around the turn of the century, prompted, in part, by the realisation he was simply running out of space for shops in Japan. Unfortunately, Uniqlo's brand recognition outside Japan was little better than non-existent. Worse, sites for stores appeared to be chosen using a street map and a pin. "The way they opened was scattershot," says Coble. "They opened in Knightsbridge; they opened in Walthamstow. It was this big land grab open as many stores as possible."

Endearingly, Yanai's the first to admit he hadn't really thought it through. "Brand awareness was very low," he nods. "So now we need a solid platform and business partners to make it happen." Hence the prime real-estate stores in New York and London. And the fashion-led marketing campaign.

Is Uniqlo's strategy working? Sales in the New York and London flagships have so far exceeded expectations and the British Fashion Awards' Model of the Year, Agyness Deyn, recently nominated Uniqlo her "favourite high street store". Others sound a more cautious tone, noting that the Oxford Street store had previously been a Tesco and a Waterstone's, and neither of them could make the rent work. "Uniqlo has come back to market in a much more structured and less arrogant manner," says Lorna Hall, executive editor at Drapers, the fashion industry weekly. "But I do wonder if the UK consumer, beyond metropolitan areas, will get what it is about."

Richard Perks, director of retail research at Mintel sees a disconnect between the endorsement of the trendies and the merchandise. "Trendy isn't the Uniqlo way of doing things. It's good-quality, well-made basics. It doesn't even have the cachet of, say, an American Apparel. There's no reason why Uniqlo can't build that reputation over here; I'm just sceptical that it's doing the right thing at the right time."

Monday morning on Oxford Street and an hour before Uniqlo's flagship store will open, Coble's staff are hurriedly replenishing the shelves after a busy weekend in the run-up to Christmas. "The Japanese denim has been doing terrifically well," he notes. "And the Pantone cashmere." He's just received word that John Lewis, directly opposite, has posted record weekend trading. The Uniqlo effect, he notes. "We've clearly bought a lot of people to Oxford Street!" He shoots down the notion that if Tesco can't make the rent work, no one can. "If you look at the amount of food stores on Oxford Street, there's very few. Look at the clothing retailers and there's an awful lot. And the great thing about the UK is that there's always a desire for something different."

Can Uniqlo really become the biggest casualwear brand in the world? "The London launch shows the ambition of Yanai and it shows the resources as well," says Coble. "All that remains is finding the right opportunities."

'The Independent on Sunday New Review' flew business class to Tokyo with ANA. ANA offer daily flights from London to Tokyo. Tel: 0870 837 8866, www.anaskyweb.com/uk/e