Uniqlo Korea closed 60 stores and pivoted online — back to ₩52.9B profit
After the 2019 boycott and Covid gutted traffic, Uniqlo shut a third of its Korean stores, pushed Heattech and AIRism sales online, and returned to profit.
What was changed
Uniqlo's Korean business was caught between politics and the pandemic: Korean consumers boycotted Japanese products from 2019 after Tokyo's retaliatory measures against the Korean Supreme Court's 2018 ruling ordering Mitsubishi to compensate wartime forced-labour victims, and then Covid-19 cut offline shoppers further.
FRL Korea's answer was to shrink to fit. Over two years about 60 of its 190 Korean stores closed, including signature branches in Myeong-dong, Jamsil and Gangnam's Shinsegae Department Store, and in February 2022 it announced three more money-losing closures that month as part of improving the bottom line.
The cuts worked. From September 2020 to August 2021 the brand recorded ₩582.4 billion ($485.6 million) in sales, down 7.5 percent year on year, but swung to an operating profit of ₩52.9 billion ($44.1 million) from an ₩88.4 billion loss in the same period the year before. A Uniqlo official credited cutting operating expenses of unprofitable stores and growing online sales, with customers buying staples like Heattech and AIRism through online malls.
Collaborations with high-end brands such as White Mountaineering and Jil Sander contributed substantially, selling out limited editions online and pulling customers into stores on launch days. In 2022 the company planned 10 new stores in lucrative areas, particularly Seoul's outskirts, while building reputation through donations such as ₩130 million of clothing to 20 Busan orphanages.
Why it worked
Closing about 60 stores removed the rent and staffing costs of outlets the boycott had already emptied.
Online malls carried the steady sellers (Heattech, AIRism) without needing a physical footprint.
Limited-edition collaborations kept the brand culturally present despite the political overhang.
Reopening selectively in lucrative Seoul outskirts reused cash flow freed by the closures.
What can be applied
When a political boycott shrinks demand, closing the loss-makers first and moving staple sales online can turn a smaller network back into a profit engine.
Aftermath
As of February 2022 Uniqlo Korea was opening 10 new stores in profitable areas, with a company official saying 2022 would 'continue to get better' after the quarterly revenue-and-profit jump.