TOKYO (Reuters) - Baggy pants and oversized t-shirts helped spare Japanese fashion brand Uniqlo from the steep coronavirus-led fall in sales that hit rival fashion chains such as H&M and Zara. Now, Uniqlo founder and CEO Tadashi Yanai has shifted his sights to post-pandemic consumer spending, and he’s betting that the world’s third-biggest clothing chain will need to sell more than comfortable roomwear and 2,900 yen ($27.50) down vests to achieve his dream of making it No. 1. On Friday, Uniqlo will begin selling a new collection that revives a popular tie-up with German minimalist designer Jil Sander, with looks and prices beyond the store’s usual lineup. Dubbed “+J”, the partnership comes over a decade after Uniqlo’s first collaboration with Sander helped to bolster the fashion credentials of the Japanese chain best known at the time for its cheap and colourful fleece jackets. The latest +J collection includes tailored blazers, cashmere-wool blended coats, and Supima cotton dress shirts for both sexes, mostly in black, navy, burgundy and white. The shift upmarket will give Uniqlo a new sales avenue but is not without risk, coming at a time when Japan, the chain’s biggest single market, is stuck in recession with consumers worried about a prolonged pandemic. The new collection’s wool-cashmere blend coats, at 22,900 yen, rank among the highest-priced items in Uniqlo history. Few other Uniqlo items currently cost over 20,000 yen, with a padded parka from Uniqlo U, a relatively fashion-forward collection directed by French designer Christophe LeMaire, now on sale for under 6,000 yen. HIGH PRICE TAGS On Twitter, many Uniqlo fans expressed excitement about the return of its collaboration with Sanders, a design legend, but just as many lamented the high price tags. “It’s very difficult to move upmarket. People have a very, very strong opinion about what prices they want to pay when it comes to Uniqlo and those prices are out of that range,” said Mike Allen, an analyst covering Japanese retailers at Jefferies. Some analysts also cited unsuccessful attempts by other casual brands that have tried to go upmarket, including J.Crew, which filed for bankruptcy earlier this year. A shift towards a higher price bracket is often blamed by analysts for hastening J.Crew’s decline. But many see little other choice for Uniqlo as competition intensifies, including from previously unknown names like Chinese online brand Shein that have emerged in a now-recovered China market. In Japan, Workman 7564.T, previously a favourite of construction and factory workers, is moving into general fashion. Globally, Uniqlo also faces tough competition from outdoor and sports brands such as North Face and Nike NKE.N. Surveys have found that Uniqlo clothes already make up at least one out of 10 items in the average Japanese wardrobe. “It’s going to be difficult to expand market share further, so they need another channel, and that’s higher-priced merchandise,” Jefferies’ Allen said. THE L-WORD Nicole Fall, the founder of consultancy Asian Consumer Intelligence, said the new collection was well-timed as people want to appear professional when they return to their offices, “particularly as unemployment creeps up and further retrenchment exercises are carried out.” A focus on quality over low prices was also in line with the industry’s post-pandemic shift away from fast fashion, she added. “The business model cannot sustain low volume and low prices but it can evolve to fewer pieces at a slightly higher price point, particularly if the items are associated with the prestige Jil Sander name,” Fall said. Yanai, while maintaining his ambition of making Uniqlo owner Fast Retailing 9983.T the world"s biggest clothing company, has recently been telling investors that the company wants to focus on clothes made to last, with innovative fabrics and attention to details like zippers and buttons, rather than churning out high volumes of on-trend items. In an interview with Wallpaper, Sander, who no longer runs the eponymous brand she founded, described +J as a “shop window for Uniqlo to show what level of luxury the company can achieve.” But Uniqlo executives deny they’re aiming for luxury. “What we want to provide is something authentic, something crafted to perfection... and offer it not just to a certain segment but to everyone,” said Yukihiro Katsuta, head of Uniqlo’s R&D.