Uniqlo’s tennis bet pays off as endorsers square off at U.S. Open

by Rin Ichino

Bloomberg

Fast Retailing Co. is ready for war. The clothing maker’s battle begins Saturday, when world No. 1 Novak Djokovic takes on 10th-seed Kei Nishikori in the U.S. Open semifinal.

Billionaire founder Tadashi Yanai wins, regardless of the outcome. Both players, signed on in the last three years, will be wearing his Uniqlo brand clothes at the final Grand Slam of the year in New York. Nishikori made history Wednesday, beating third-seed Stan Wawrinka to become the first Japanese man in 96 years to reach the U.S. Open semifinals.

“It’s a Uniqlo war on one court,” said Eriko Muteki, a spokeswoman for the brand. “It’s fantastic for us to have both of these stars battling each other while wearing our clothes.”

The matches are a boost for the no-frills casual apparel brand as Yanai takes it global, relying on flagship stores in cities including New York, Paris and Shanghai to fuel sales growth that has fizzled in Japan.

The on-court success also elevates Nishikori’s status among star Japanese athletes who have made names in sports such as Ichiro Suzuki in Major League baseball, said Toshihiro Nagahama, chief economist at Dai-Ichi Life Insurance Research Institute.

“Uniqlo is expanding around the world, so the effectiveness of an endorsement deal in cases like this is global rather than just domestic,” Nagahama said by phone in Tokyo. “He is now a world-class athlete.”

Nishikori has also signed endorsement deals with Nissin Foods Holdings Co., Delta Air Lines Inc., luxury watchmaker Tag Heuer and Japanese financial services firm Jaccs Co. Pay from sponsors totaled more than $10.5 million last year, according to Forbes magazine, which ranked him as the world’s 10th best-paid tennis player.

And that was before his best year yet. By reaching the final in the Madrid Open against Rafael Nadal, Nishikori earned a place in the Association of Tennis Professionals Top 10, a first for a Japanese player.

Yanai, who is Japan’s richest person, introduced tennis sponsorships after building Uniqlo into Asia’s biggest clothing chain by pairing simple seasonal designs, discount pricing and no-glamor advertising with innovative fabrics and big, well-stocked stores. The brand’s first tennis endorser was Shingo Kunieda, an ITF Wheelchair Tennis World Champion.

Yanai, who is said to play golf on weekends with an 11 handicap, is worth $16.5 billion, the 54th wealthiest person in the world, according to the Bloomberg Billionaires Index.

The billionaire has ambitions for Fast Retailing to overtake Zara owner Inditex SA and become the world’s top clothing retailer. He has quadrupled overseas sales in the five financial years through August 2013.

Nishikori was added in 2011, bringing the casual-wear brand into the limelight in a sport dominated by athletic wear labels. Yanai signed the rising star, who had an earlier clothing deal with Adidas AG, even before Uniqlo had a line of tennis clothing. “Air K,” Nishikori’s nickname for his hopping power forehand, made history in 2012 as the first Japanese man to make it through to the Australian Open quarterfinals.

“The market effect of this endorsement will definitely be greater now than it was in the 2012 Australian Open,” said Nagahama of Dai-Ichi.

Nissin, a Tokyo-based instant noodles maker, first signed Nishikori in 2008, then extended his endorsement contract in 2012 and included a special Cup Noodles product affiliated with the player that was later discontinued.

“We’re discussing about starting sales of the product again,” Masashi Kanaya, a Nissin spokesman, said by phone.

Nishikori took five sets to defeat Wawrinka, the winner of this year’s Australian Open. The Japanese, who moved to Florida at age 14 to train, beat Canada’s Milos Raonic, ranked sixth in the world, in the previous round.

To win it all at the U.S. Open, Nishikori must defeat Djokovic and whomever wins the other side of the draw, which includes Roger Federer, Gael Monfils, Tomas Berdych and Marin Cilic.