Uniqlo claims closures are unrelated to boycott

Japanese fast fashion brand Uniqlo - which quickly became the poster child for the Korean boycott against Japanese brands - is not only facing falling sales, but also rumors that it is being forced to shut down some of its branches.

Despite continuous denials from the company, there have been growing rumors that the closure of some Uniqlo branches is a direct result of the drop in sales following the boycott.

The company’s announcement on Sunday that it was shutting down its branch in Nowon District, northern Seoul, next month fueled speculation.

It is the third store that has shut down since July.

However, Uniqlo claims that the decisions to close the stores had nothing to do with the recent boycott.

“We’re closing the Uniqlo store in Nowon due to the renewal of Emart’s Wolgye branch,” said a spokesperson for FRL Korea, which operates Uniqlo in Korea. “The decision was confirmed in the first half of this year and has nothing to do with the current situation.”

The spokesperson said the company is currently reviewing opening a new store in another location.

A Uniqlo store in Jongno District, central Seoul, was the first to confirm that it was shutting down at the beginning of this month. Although it will be open until October, the company said it was closing the store because the building owner refused to extend the contract, not because of dwindling sales.

Another store in Guro District, southern Seoul, located inside the AK Plaza department store is also due to close by the end of this month. The decision to close the Guro store was also made by the building owner, AK Plaza.

Some rumors even say that Uniqlo is looking to send some employees on paid leave while it struggles to downsize.

The company’s spokesperson denied these rumors.

“It’s not true at all, and we haven’t even considered the possibility,” said a spokesperson.

In its last fiscal year between August 2017 and August 2018, Uniqlo made 1.37 trillion won ($1.1 billion) in revenue. That’s an 11 percent increase compared to the previous year. Korea is the third-largest market after Japan and China.

But the boycott has changed things dramatically.

Although Uniqlo hasn’t officially released its figures for last month, according to card spending reports from eight major card companies in Korea, Uniqlo sales are estimated to have dropped 70 percent compared to the same period last year.

“We aren’t able to say our plans for now, but we are doing our best. We’re opening a new store in Yongin, Gyeonggi, this month and two more stores next month in Anyang and Bucheon, Gyeonggi,” said a Uniqlo spokesperson.

BY JIN MIN-JI, KWAK JAE-MIN [jin.minji@joongang.co.kr]