The Fast Retailing paradox: while Uniqlo grows, the group’s French labels are wiped out

The decline of Comptoir des Cotonniers and Princesse tam tam is expected to cause both fashion chains to go into receivership, as reported by FashionNetwork.com last Friday. The protection procedure for which Fast Retailing France – the company that operates the two chains – has filed with the trade court in Paris, is reportedly designed to ensure that the chains’ restructuring can continue, according to a letter sent to their employees which FashionNetwork.com has obtained.

The letter, signed by Managing Director Yoshihiro Kunii, outlined the company’s two-pronged approach: “The procedure is expected to, on the one hand, speed up the overhaul of [the company’s] business model, in order to continue to adapt its brands to the new market situation and, on the other, rationalise its store fleet by reducing the number of addresses and favouring larger, hybrid and combined stores, as well as introducing corners by both brands within Uniqlo stores.” No concrete measures have yet been taken, but the letter indicated that the rationalisation will involve some 30 stores of the 100 currently open. 

It would be the fourth downsizing operation in seven years for Comptoir des Cotonniers and Princesse tam tam, whose assortment has also been streamlined to align with Uniqlo’s, as lamented by industry specialist Frédéric Biousse in an exclusive interview to FashionNetwork.com. Biousse was the president of Comptoir des Cotonniers when the Fast Retailing group acquired the chain 18 years ago. “It would be a real shame to see more closures. What would be the point? Incorporating both brands within Uniqlo stripped them of their aspirational value. Lowering prices completely misses the point,” said Biousse, who pointed the finger at the Japanese management’s failure to understand the brand culture of Comptoir des Cotonniers and Princesse tam tam.

In its letter, the group promised “a socially responsible reorganisation plan,” but this new blow for the two chains is a challenge for employees, the unions and fashion industry observers. Comptoir des Cotonniers and Princesse tam tam’s difficulties are undeniable, but the strategic and financial approach adopted by their owner Fast Retailing since 2007 has sparked much debate. Notably because the Japanese giant is enjoying extremely good financial health.

Indeed, Comptoir des Cotonniers and Princess tam tam’s trajectory is the reverse of Uniqlo’s. In 2023, the French chains were restructured, and redundancy plans introduced at both (nearly 180 jobs were cut), following similar operations carried out in 2018 and 2021. Two years ago, fashion industry experts expressed their reservations to FashionNetwork.com. And questions are again being asked about the running of both chains, as “unwise strategic decisions” were taken in Japan, and “French executives were replaced by Japanese staff” unfamiliar with the French market. Creating a gap between the changing expectations of local consumers and the foreign masterminds’ vision.

Biousse is not alone in thinking that the two brands’ creativity has been somewhat curtailed over the years by the effort of rationalising their style as demanded by Fast Retailing, mimicking the pared-down designs that led to Uniqlo’s success. When, for example, imagination, attractive details and patterns have historically been Princess tam tam’s distinguishing traits.

Nevertheless, Fast Retailing has poured money into the two chains’ transformation. Fast Retailing France, the company that operates the chains, has regularly been the recipient of loans from its parent company, to enable Comptoir des Cotonniers and Princess tam tam to stay afloat despite significant losses. In fiscal 2023-24, closed on August 31, Fast Retailing France received a loan of €43.3 million from its parent company, according to documents officially filed. Commercial strategy-wise, last year the chains applied a generalised price reduction of the order of 30% to try to attract new customers.

But Fast Retailing has now decided to no longer support the chains, which have filed for suspension of payments.

A source close to the matter has said that the suspension of payments “is entirely fictitious, since [Fast Retailing France] is not indebted with banks or other investors but only with [Fast Retailing Group], which is currently generating huge profits.”

In H1 of fiscal 2024-25, profit for the Japanese group as a whole rose 19.2% and revenue increased by 10.7%, driven by Uniqlo’s performance.

However, what Fast Retailing is doing isn’t illegal. A union representative active in the retail sector has zeroed in on the behaviour of large groups, calling it abusive. “We’re trying to ensure that job protection plans introduced by major corporations take into account the groups’ entire corporate structure. [Large groups] often isolate the companies they want to restructure, so that these can be liquidated without having to redeploy workers or give the latter proper financial support,” said the representative. She cited the job protection plan introduced at French restaurant chain Flunch in 2024, which was soon modified since its provisions were rather feeble, given the financial power of the chain’s owner, the Mulliez family.

Fast Retailing Group has not yet made an official statement about the receivership proceedings and its further plans. According to documents seen by FashionNetwork.com, it seems the group wants to continue to operate Comptoir des Cotonniers and Princess tam tam, deploying a turnaround plan focused on larger joint stores for the two brands, and their greater presence within Uniqlo stores.

With some 60 stores left after a rationalisation effort that, according to various sources, will be “quick, effective and as cheap as possible,” what will remain of the brand identity of these two former French retail gems?