Why Uniqlo's Collaboration with Designer Velvet is One More Step Towards Retail Domination

Last Updated May 26, 2010 11:23 AM EDT

Uniqlo + Velvet one shoulder dressSome designer/retailer collaborations make you scratch your head, puzzling how two disparate entities could work together (think Target (TGT) and Jean Paul Gaultier, where chic didn't translate to cheap). Others are so natural you wonder why the two didn't get together sooner. Uniqlo's recently announced partnership with the California design duo of Velvet is definitely a case of the latter â€"- and a lesson in how joining forces with a like-minded aesthetic strengthens both brands.

Jenni Graham and Toni Spencer, the creative team who founded Velvet, are somewhat typical indie designers: they've been around for a while and built a loyal following both here and abroad, one carefully curated collection at a time. Their company has evolved from offering a single line of women's t-shirts and dresses into several distinct brands including Velvetmen (2003) and a luxury line dubbed Graham & Spencer (2006). What's admirable is that despite this growth, the founders have held fast to a design philosophy as pared down as their apparel: "fuse quality with trend-setting basics."

It's a principle which the Japanese retail powerhouse can respect as it is part of their own corporate DNA. Owned by parent company Fast Retailing, Uniqlo has made a name for itself on consistently providing high quality basics at affordable prices. What Uniqlo does not offer in terms of number of styles (think the thousands of different pieces available at other discount style peddlers H&M or Forever21) it makes up for by providing a staggering variety of colors (think one cashmere crewneck sweater, 25 shades).

Strict adherence to the SPA (specialty retailer of private label apparel) manufacturer retail model, as well as tight supervision of everything from its supply chain, to the training of store associates and expansion (now 950 stores worldwide) has served Uniqlo well. Last year Uniqlo reported over $7 billion in sales of more than 400 million items. Comps were up by more than 30 percent.

The company's already made several forays into designer collaborations, most notably with Jil Sander, the cool princess of urbane minimalism. The +J line was an immediate success, and served to expand Uniqlo's market share as Sander's sartorial stature appealed to the aesthetic of high-minded fashionistas while the prices ($39.50 to $129.50) were easy on their Prada wallets.

But the pairing with Velvet goes a bit beyond giving customers an irresistible new mix of basics each season. When the 14-piece Uniqlo + Velvet collection debuts in June, the Japanese retailer will be one step closer to taking the top spot away from Spain's Inditex, which owns Zara, as the world's largest retailer.

It's no secret that Uniqlo's founder and owner Tadashi Yanai has this in his sights. He's attempted this already with a near buy-out of Barney's several years ago, and he's also been vocal about his desire to acquire that quintessentially American retailer, the Gap (GPS).

Velvet's southern California roots (and home to most of its manufacturing) makes a strong statement for Uniqlo. Sure, it's a good PR move to help an independent, privately-owned brand catapult into the global spotlight in a way it hadn't been able to do on its own. But by snagging the collaboration, Uniqlo's bought into American style in a way the Tokyo-based retailer hadn't quite managed before. And that is going to make all the difference on Yanai's quest for world retail domination.

Image via PRLog.org