Mainstream Fashion’s New Monarch: Fast Retailing Outraces Gap and Surges Ahead of Inditex

Europe, Asia and then the United States. This would be the world order if it were marked by the world’s largest fashion retail groups. With the results of the latest giant published yesterday, the Japanese group Fast Retailing consolidates its position as the world’s third largest fashion company in the mainstream segment, leaving behind the U.S.-based Gap, which has retreated into its local market while implementing its relaunch plan.

Gap, which more than a decade ago was the world’s largest mainstream fashion group, has gradually lost the gold medal. First it was overtaken by the Swedish group H&M, and then the Spanish company Inditex ended up overtaking both to become number one.

For years, the status quo in which Inditex, owner of Zara, held the gold medal; H&M, the silver, and Gap, the bronze, was maintained. Until 2015, when for the first time the Japanese group Fast Retailing accelerated and ended up passing Gap, coinciding with the weakening of the American.

Over the years, and with some ups and downs depending on the exchange rate, the giant owner of Uniqlo has consolidated its position as the third largest fashion group in the world, widening its gap with Gap. The evolution has been confirmed by the results of the last fiscal year on the table presented yesterday: Fast Retailing is today 1.5 times bigger than Gap.

With a business of 3.4 trillion yen ($22,2 billion) at the end of the last fiscal year (ended last August), the company chaired by Tadashi Yanai has not only widened the gap with Gap but has also reduced it with H&M, which has been in the doldrums for several years.

H&M closed its last full year (ending November 2024) with a turnover of SEK 234,478 million ($24.7 million at current exchange rates). Thus, taking into account the changeover to euros, between H&M and Fast Retailing there is now only slightly more than $2.5 billion.

Although it has set itself the goal of becoming the world’s largest fashion group (without setting a timetable), for the moment Fast Retailing is lagging far behind the number one: Inditex. The Spanish group ended the last fiscal year with complete data (ending January 2025) with a turnover of €38.63 billion.

The growth rate of both companies is, however, uneven. The Japanese company still has a lot of international ground to cover and in the last fiscal year has recorded a growth of 12.81%, thanks to an increase in sales of 10.1% in Japan and 11.6% internationally with its Uniqlo chain.

Inditex, on the other hand, has already enjoyed several quarters of single-digit growth. In fact, fiscal year 2024 ended with a 7.5% increase in sales, as a result of a weaker performance of Zara and the slowdown of business in geographies such as the United States and China.

Dependence on the local market

Of the four mainstream fashion giants, the U.S. group Gap is the most dependent on its local market. With the latest full-year results, the company concentrates 88.13% of its revenues in the United States. In fact, outside the United States and Canada, the company had a turnover of just over $609 million.

H&M, born in a market as small as Sweden, has internationalization at the base of its business and at the end of 2024 only 8.79% came from its local market. In the case of Inditex, only 15% of sales correspond to Spain, something logical in a company that within a few years of being born already jumped to New York and Paris. In the case of Fast Retailing, Uniqlo Japan contributes 30.17% of total business.

While both Inditex and H&M, and Fast Retailing to a lesser extent, base their model on a strong international presence, Gap has spent the last few years withdrawing from its local market. It has done so while introducing a relaunch plan led by CEO Richard Dickson, which seeks to reconnect with the culture and new generations. But only Americans.

Gap is highly dependent on the United States, while it has achieved greater diversification by chain in its sales

After the Great Recession hit, Gap began a process of international growth, relying mostly on local partners through franchising. In 2014, 26% of Gap’s stores were outside the United States and in 2018 there were already more than a thousand stores outside the local market, with Asia leading the way.

In 2014, when Gap reached its global turnover peak at $16.435 billion, the company’s international peak also arrived, with $3.763 billion and an international share of 22.90%. Between 2015 and 2017, Gap’s sales outside the United States remained at around 20% of the total, but in 2018 they lost that share to stand at 19.57% and, a year later, in 2019, at 18.22%. With the arrival of Covid-19 and the restructuring plan put in place by Dickson, Gap’s international presence has been progressively reduced.

Where Gap does fare better is in its dependence on its main chain. In the last fiscal year, 21.87% of the company’s revenues came from Gap. In fact, today the group’s largest concept is Old Navy, with sales of $2.2 billion, while Banana Republic contributes only 545 million dollars and Athleta, $396 million.

In the case of Inditex, Zara contributes more than 70% of total revenues, with the group’s other chains (Massimo Dutti, Bershka, Stradivarius, Pull&Bear and Oysho) far behind.

It is even more dependent on its main chain Fast Retailing, with Uniqlo accounting for more than 86% of its revenues, well above the GU chain and brands such as Comptoir des Cotonniers. Sweden’s H&M does not provide sales by concept, although the size of the main chain’s store network is much larger than that of Cos or &Other Stories.