In a saturated retail market, Japanese Uniqlo is an outlier.

In fiscal year 2014, the company's international business brought in $2 billion in revenue.

Ten years later, that number reached $11 billion.

Uniqlo's success lies in its ability to offer essential basics that are timeless, the kinds of things that you want to have in your closet, regardless of what's going on with trends.

After initially launching in 2005 and shutting down within a year, the international segment has brought in over 20 percent in operating profits over the past three years.

In its most recent quarter, the company's operating profits rose to just under a billion dollars and maintained its forecast for a fourth consecutive year of record earnings.

However, sales growth in China declined due to what parent company Fast Retailing said was unseasonably warm weather.

In 2021, it became the most valuable clothing company by market capitalization.

As of January 2025, Uniqlo is the second largest, trailing Zara owner Inditex.

CNBC took a closer look at Uniqlo to learn more about the quiet retailer's success, how it differentiates itself from competitors, and see why CEO Tadashi Yanai considers the brand a tech company and not a fashion company.

Uniqlo opened its first store in Hiroshima, Japan, in 1984.

It was originally called Unique Clothing Warehouse, and the parent company, originally named Menshop Ogoro Shoji, now Fast Retailing, is one of Japan's biggest retailers.

It owns a total of nine brands, including Helmet Lang, Theory, J Brand, and GU. 2000 was a breakthrough year for the company.

Its 1900 yen fleece apparel campaign, which at the time was equal to about $15, was a massive success for the company.

It sold 2 million units in 1998, 8.5 million in 1999, and 20 million in 2000.

Overall sales grew 459% between 1997 and 2001, which led to its global expansion, first in London, then Shanghai.

Uniqlo then opened its first U.S. store in 2005 in New Jersey, but problems like low brand recognition and weak differentiation caused it to shutter its stores within a year.

The brand was back in the U.S. in 2012.

It plans to reach more than 200 stores in North America by 2027, nearly triple its current store count.

Fast Retailing CEO Tadashi Yanai is now Japan's richest person with a net worth of $44.6 billion.

Yanai unseated SoftBank leader Masayoshi San as the country's wealthiest in 2019.

Fast forward to today.

In just the last four years, its international business has largely outpaced its domestic.

Uniqlo's claim to fame is its minimalistic, durable and functional style.

Its stores very much display the aesthetic.

Uniqlo increasingly over the last 20 years, but maybe in particular the last 10 years, have been very fit for our times.

And what do I mean by that?

They provide functional basics, decent design, unflattered stores, a color palette that kind of probably speaks to most of us.

It kind of operates in its own little world because retailers have been kind of trained to respond to the latest trends very quickly.

And of course, that works.

And there's always going to be a customer for those types of stores.

But to find a retailer that's just focused on the everyday essentials and offering you every color and fit of those everyday essentials, then they are in a league of their own.

Its Heatech and Aerism lines have become the company's staples.

The Heatech collection exceeded $1.5 billion in cumulative unit sales through 2022, 19 years after the brand launched the collection.

Aerism, once called Silky Dry for Men and Seraphine for Women, has done well for the brand, too.

We've all been there where we're wearing something in the summer, a cotton T-shirt or cotton pants that are just making us sweat.

They're heavy.

You're not wicking away moisture.

It's not breathable.

Uniqlo has an offering for people like that.

It solves that pain point, which is one of the reasons why it's been such a winner.

The company says product launches are based on a deep focus on customer feedback.

During a November presentation, the company highlighted this two-way communication, where consumers asked for a sweater that didn't itch.

Uniqlo responded by developing Soufflé Yarn knitwear.

It's become a favorite.

Uniqlo is a very customer-centric organization.

It listens very actively to customers, whether it be via social media, by feedback surveys or indeed by people talking to associates in stores.

It gathers all of that feedback and it really implements that in terms of how it designs products, how it comes up with new iterations.

That's really important for Uniqlo.

Uniqlo excels at the in-store experience.

Walking through a location, it's clear the company places a priority on cleanliness and order.

The in-store experience garnered enough attention that the Chicago location received the Business Impact of the Year award from Chicago's Magnificent Mile Association, one of the area's most active business associations.

The Japanese retailer has since closed the store.

It is another location a mile away.

The in-store experience is the primary marketing channel in itself because, in fact, you don't see much marketing outside the stores.

Data shows that 72 percent of consumers still shop in-store over online.

So the idea of making your store the main marketing channel is something many retailers are emphasizing, including Uniqlo.

When you enter into a Uniqlo store, you're obviously captivated by the large windows.

It's also very bright.

It becomes what we call the very modern light in retail.

But the stores are also very uncluttered.

They are easily divided between genders, between seasons, between what items you're going to get at.

Everyone is friendly.

There's no boxes flying around in the aisles.

And it's not too complicated to go into a Uniqlo store.

Uniqlo uses RFID technology or radio frequency identification as part of the checkout process.

It allows customers to pay for items without any scanning.

No tags, no barcodes, a streamlined process.

When you go to Uniqlo stores, you notice a lot of innovations, things that set it apart from other retailers.

For example, when you go to the checkout at a lot of their stores, you don't necessarily need a cashier to ring up every individual item.

They have these bins where you can put all of your clothes into one bin and it automatically reads QR codes that are in the tags.

And it just automatically knows every single item that you have in there.

H&M and Zara are some other retailers that have adopted such technology.

RFID tech as a whole has been around for a while, but advances in the technology have increased retail adoption.

Ninety three percent of retailers are using the radio frequency tech in some fashion.

Local activations is another emphasis of Uniqlo's.

The Uniqlo experience that I would expect to have in Barcelona, in Tokyo or New York City, it has to be all in all the same thing.

But obviously, when you have a local face showing up in the store in activation campaigns, I as a Chinese, as an American, I feel that the brand speaks to me and it's kind of understand my culture and that's what you need to do.

Uniqlo stores sell clothing made by local artists and businesses.

Uniqlo is very good at localness and most of the products are international.

They sell across the world.

But there is a fraction of them that they change up from store to store and they make sure that there is a local flavor.

Now, that's important because tastes can vary locally.

But it's also important because it makes the stores feel very grounded and very relevant to each location.

It really shows that Uniqlo is thinking about local markets.

Personalized and interactive demos enhance customer loyalty.

The Uniqlo studio allows customers to tailor or hand their Uniqlo products.

Uniqlo's road ahead isn't all clear.

Competition from popular retailers like Gap and H&M.

It's lagging e-commerce operation and an unclear succession plan are all some of its challenges ahead.

There is a risk that retailers like Gap could find their feet again and that may put more pressure on Uniqlo.

You also, of course, have the rise of some of the fast fashion players like Shein and Teemu.

And whilst they're in a slightly different segment because they tend to be much more about disposable fashion, they are moving into the arena.

So Uniqlo is not going to have an easy time of it going forward.

And I think they can still remain distinct and I think that they have a very strong position.

But there are definitely threats on the horizon.

Zara, owned by Spanish Inditex, Swedish H&M and the United States Gap are all Uniqlo's direct competitors and the company lags far behind them all in e-commerce.

One of the areas where Uniqlo could do a little bit more is with e-commerce, especially in the U.S., because it doesn't have a huge number of stores.

And therefore it sort of punches under its weight in terms of the number of consumers it can reach.

So it could use e-commerce as a vehicle to really fill in those gaps as it opens more stores.

In 2023, Uniqlo announced its goal to reach 200 stores in the U.S. by 2027.

As of February 2025, it has 69.

That means 131 more stores in just three years.

Of course, they're going to be careful not to overexpand.

And we have seen that back in history.

The history books are full of that.

When brands suddenly became kind of everyday brands for people and they got a little tired of it.

But I think they have a longer leeway for Uniqlo in order to reach that.

Fast retailing CEO Tadashi Inai is looked at as a visionary.

However, he's 75 and any great company has to consider a qualified succession plan.

So much of a company's success is based on management.

It doesn't matter how great your product is or how great your stores are.

If you're managed poorly and if your balance sheet and your growth plans aren't managed appropriately by that CEO and its team of executives, then you're going to crash and burn.

So for a company like Uniqlo that does have a 75 year old CEO at the helm.

If they're not succession planning already, then that's a huge risk for the company.

Succession is always a concern.

But this is something that Uniqlo will have on its radar.

And there is a very strong brand vision that goes beyond Unite.