Grameen UNIQLO announces closure of its business in Bangladesh
The outfit brand will close down all its outlets in the country by 18 June
Grameen Uniqlo has announced that it will wind down its business by shutting down all of its outlets.
Japanese Fast Retailing Company Limited established Uniqlo Social Business Bangladesh Ltd in 2010 in partnership with the Grameen Bank Group's Grameen Healthcare Trust.
In a joint venture, they launched "Grameen Uniqlo" in August 2011 with the aim of responding to social issues such as poverty, health and education in Bangladesh.
Uniqlo is a well-known brand of the Japanese multinational Fast Retailing Company.
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Shoriful Islam, head of marketing of Grameen Uniqlo, told The Business Standard, "Uniqlo's social business started with an objective, among many others, of providing products at affordable prices to a part of society. That objective has been largely fulfilled, so, the parent company has announced the closure of the clothing business in Bangladesh."
In response to questions regarding the company's performance, he said, "Businesses go through ups and downs. We posted profits, but could not maintain consistency. However, we did not close down the business due to losses or financial reasons. With the economic development, people's conditions have also changed, so Uniqlo does not want to continue doing business in this situation."
However, he refused to disclose data about the company's sales or profits in recent years as it goes against their policy.
How Grameen Uniqlo started business
Around a decade ago in 2012, Grameen Uniqlo started selling sanitary products at $1 to poor rural women.
After that, contributing more to Bangladesh's economy and society, Grameen Uniqlo expanded its social business from April 2012 to June 2013, and developed a business framework different from the traditional ones.
The company initially operated in the rural areas, but later they started selling products in Dhaka through various creative distribution systems like shops set up in vans and minibuses to understand what the customers needed.
It also added new products like polo shirts and collared shirts, and extended the price range of their products to $2-$4.
After experimenting and observing the business trend for several years, Grameen Uniqlo opened its first store in Dhaka in 2013, targeting middle-income earners and young people.
It significantly expanded its product line with continuous development and strong quality commitment.
Shoriful said, "Opening new stores helped to accelerate the growth of our social business by providing people with good clothing at affordable prices as well as by creating job opportunities at our stores."
After 2013, Grameen Uniqlo set up 18 outlets in the capital due to the increasing demand for their products. Fast Retailing Company invested $4.6 million at the start of the business, said Shoriful.
He said, "Our company sourced products from 13 garments, but we will stop it. The products that are currently in our stores will be sold out within the stipulated time."
Shoriful said Uniqlo Social Business Bangladesh operated Grameen Uniqlo, which was fully owned by Fast Retailing Company.
However, according to the company's website, Grameen Healthcare Trust has 1% stake in Grameen Uniqlo, while Fast Retailing Company owns 99% of it.
Asked about the matter, Shoriful said, "In the beginning, Grameen Healthcare Trust owned Grameen Uniqlo shares, but currently that company is not in operation. So, Fast Retailing Company owns 100% of Grameen Uniqlo shares."
While Grameen Uniqlo will be closed, Fast Retailing Company's other projects will continue, said Shoriful.
On 10 April, in an announcement, Grameen Uniqlo said, "In view of Bangladesh's significant economic development in recent years, as well as changes to its business environment, Fast Retailing has determined that Grameen Uniqlo has fulfilled a certain role, and has decided to conclude its business activities."
The announcement also said, "Fast Retailing remains committed to Bangladesh, one of its most important manufacturing locations. In 2008, the company opened a production office which contributes to the development of the local textile industry, while our partner factories in Bangladesh continue to produce Fast Retailing products including Uniqlo items."
Lamiya Morshed, executive director of Yunus Centre, said in a statement to the media, "We are very sorry that Grameen Uniqlo has decided to close down its business. It has been a well-known popular global brand marketed globally through Uniqlo's stores, particularly through their unique super stores in mega cities all over the world. These products attracted global attention along with the message of Social Business.
"We have been very happy with this example of the success of a global Social Business undertaken by a popular global company. It is sad to see Grameen Uniqlo close down after a great success. We accept Uniqlo's decision with a heavy heart."
