Archive for the ‘Style/fashion’ Category

Japanese franchises cut loose by overseas brands after serving their purpose

Sunday, July 20th, 2014

Burberry outlet run by Sanyo Shokai in Matsuzakaya department store in Okachimachi.

Burberry outlet run by Sanyo Shokai in Matsuzakaya department store in Okachimachi.

According to Asahi Shimbun’s online magazine Webronza, the U.K. apparel maker Burberry has decided to end its long-standing licensing agreement with Japan’s Sanyo Shokai in order to develop its own retail outlets in Japan. Sanyo first signed the agreement in 1965, and since then has made Burberry one of the most consistently successful foreign brands in Japan by tailoring the company’s line to Japanese bodies and tastes. Though Burberry’s famous tartan check pattern is at the heart of Japan’s love for the brand — owning a Burberry scarf was, for a time, a rite of passage for Japanese high school girls— Sanyo’s main achievement was making the Burberry trench coat a timeless fashion favorite.

In 2006, an American, Angela Ahrendts, became the CEO of Burberry and worked to return the company to its roots as a high-end brand. She downplayed the tartan check pattern, reducing its use to only 10 percent of the product line, and concentrated more on new, original designs. From 2006 to 2013, when Ahrendts left to become senior vice president of retail and online at Apple, the company doubled its sales revenues and tripled its stock price. One of Ahrendts’ main concerns was doing away with all the licensing agreements the company had with regional companies. She bought out the Spanish franchise and opened directly owned stores in Spain that have become just as successful if not more so than the franchise business.

As it stands, of Burberry’s ¥349 billion annual sales, only ¥18.5 billion comes from franchises, or 3 percent, but after Spain was cut loose, Japan accounts for 60 percent of all franchise business. Burberry obviously thinks it can make more money dealing directly with Japanese consumers, specifically high-end Japanese consumers, since an imported Burberry trench coat costs as much as ¥230,000, while the trench coats that Sanyo makes under its Black (men) and Blue (women) Burberry labels only cost half as much.

Sanyo isn’t the first Japanese company that has worked hard and long to successfully popularize a foreign brand among domestic consumers only to be let go by the foreign licensor. Adidas did the same thing with Descente in 1998, and Mercedes Benz eventually took over Japanese sales of its cars from Yanase, who no longer has the import license for Mercedes, only a sales license. However, in Yanase’s case the situation was the opposite of Sanyo’s. Yanase cultivated Mercedes as a brand only for the well-to-do (leading to the old joke about the cars being the exclusive property of doctors and yakuza), but Mercedes wanted to cater more to middle class buyers and started opening their own showrooms in Japan.

The luxury Belgian chocolatier Godiva, now owned by a Turkish company, is also discontinuing its long-standing licensing arrangement with a Japanese company, the tea importer Kataoka Bussan. Starting in 2015, Godiva will start selling its chocolates at directly owned stores in Japan.

Some franchises suffer more than others. At least half of Sanyo’s ¥106 billion annual sales comes from Burberry products, which it sells in 300 dedicated department store outlets, so the loss of that business is a serious setback. The advantage of this model to the overseas brand is incalculable in that, for years, Sanyo took care of all promotion, building the brand to where it is now. For what it’s worth, Burberry by far sells more trench coats in Japan than any other apparel maker, domestic or foreign.

The reason these franchises can do this is Japanese consumers’ distinct identification with brands, which accounts for some unusual distribution deals, especially for brands that are considered exclusive. The problem for Japanese makers who also count on brand identification is that it seems to be a one-way street.

Japanese brands don’t have the traction overseas that they once did. Sanrio has made Hello Kitty famous worldwide, but mainly by giving the trademark to anyone who pays for it. If you buy the rights to Hello Kitty, you can do anything you want with the name and the image. That’s good for licensing, but now the company wants to make money from sales, and the transition has proved to be more difficult than Sanrio thought.

Diamonds are suddenly everybody’s best friend

Saturday, May 31st, 2014

Several years ago the term “urban mining” took off. It referred to the discovery of precious metals that were “buried” in people’s homes in the form of personal possessions like jewelry and home electronics that they weren’t using. A lot of cell phones, for instance, use gold and other valuable materials in their circuits, and when the price of these substances was high, brokers would pay premium prices for them, no matter where they came from or what form they were in.

Komehyo outlet in Ginza, Tokyo

Komehyo outlet in Ginza, Tokyo

At the time, gems were not coveted so much, but that’s changed. Right now, the price of diamonds on the world market is about 30 percent higher than it was a year ago, according to a recent article in Chunichi Shimbun, thanks to a healthier world economy. Consequently, well-to-do people in Asia, North America and the Middle East are craving diamonds, and foreign buyers, particularly from the U.S., China, India and Dubai, are flocking to Japan because they think there are a lot of the rocks here “sleeping” in people’s closets and vanity cases.

The reason is simple. During the bubble period of the late ’80s, when the value of various assets was higher than it probably should have been, people with even a little money bought a lot of jewelry that they don’t wear any more. Many of these people probably have forgotten they even have diamonds.

Komehyo, the Nagoya-based retailer that specializes in recycling high-end merchandise such as designer accessories and expensive jewelry, is spearheading the drive to get Japanese people to dig into their tansu (wardrobes). As one of the company’s store managers told Chunichi, another reason foreign buyers are descending on Japan is that the diamonds are already cut, and used cut diamonds tend to be cheaper than new ones, though there really isn’t any difference in quality. Komehyo is hoping to sell used diamonds in bulk and is offering premium prices to anyone who wants to unload theirs. The chain has launched a Diamond Purchase Fair at all its 20 outlets throughout Japan.

In order to get a handle on the market, Komehyo conducted a survey among men and women over the age of 20. They found that, on average, respondents have each spent about ¥780,000 on “jewelry, watches, bags and brand goods” during their life so far.

Several years ago Tanaka Kikinzoku Kogyo, a dealer in gold and other precious metals, carried out its own survey and found that 80 percent of female respondents have jewelry they don’t wear any more, either because they no longer like the design, or lost one earring or just forgot about it. The company calculates that the average woman in this group has ¥40,000 worth of jewelry they never wear. Tanaka was interested in gold, however,

Based on its own findings, Komehyo estimates the average person possesses about ¥160,000 yen’s worth of jewelry and other valuables that they don’t use any more, which means there could be as much as ¥15 trillion worth of diamonds in people’s homes.

Kanebo recall illustrates built-in resilience of cosmetics industry

Monday, July 8th, 2013

White is might: The Sex and the City cast plug their second movie in Tokyo, 2010

White is might: The Sex and the City cast plug their second movie in Tokyo, 2010

Last week, cosmetics giant Kanebo, along with two subsidiaries, announced it was recalling 54 skincare products that are believed to cause unsightly blotches. The merchandise under scrutiny contains an active whitening ingredient called Rhododenol that the company first started marketing in 2008, and it estimates that some 250,000 women in Japan alone use it on a regular basis. Since 2008, 4.36 million units have been shipped and probably about 450,000 may still be in use, including in foreign countries like Thailand and Taiwan. The Philippines, in fact, reacted to the recall by banning all Kanebo products that contained Rhododenol.

On the surface, the size of the problem sounds formidable, since Kanebo will lose some ¥5 billion on account of the recall. Asahi Shimbun reports that the company has not released sales figures for the disputed line of products, but it is believed Kanebo’s annual revenues for skin whitening agents is around ¥190 billion. Consequently, the company is not losing that much, and if one wanted to make a gambling analogy, it obviously pays to market substances that aren’t guaranteed in the long run since so much money can be made in the short run. It all depends on what people want and how badly they want it.

Women’s cosmetics, and whitening products in particular, are no-lose propositions in Japan. The main market right now is middle aged consumers, who, according to a recent article in Aera, buy almost any anti-aging product that goes on the market. This practice is now called keshohin kurujingu, or “makeup cruising.” The article profiles several women, housewives and working women, all in their 40s and 50s, who spend an average of ¥50,000 a month on cosmetics.

Continue reading about the strength of the cosmetics industry →

Annals of cheap: Don Don Down on Wednesday

Wednesday, February 27th, 2013

We all know Japanese people prefer new stuff — new homes, new rice, new prime ministers every 12 months — which may explain why the used clothing business isn’t as big here as it is in other countries. According to the Asahi Shimbun, 50 percent of discarded used clothing in America is recycled, either commercially or as contributions, and the portion in South Korea is 80 percent. In Japan, it’s only 20 percent, meaning that the rest is simply trashed. But that may change with the advent of a new model for used clothing stores.

Don Don's website

Don Don’s website

Don Don Up Co. Ltd., headquarted in Morioka, Iwate Prefecture, opened its first used clothing store, called Don Don Down on Wednesday, in Hachinohe, Aomori Prefecture, eight years ago. The company now commands a chain of 60 outlets nationwide, with more to come. Don Don, an onomatopoeic word expressing a process of steady progression, came up with an ingenious pricing system that not only saves the company overhead and personnel costs, but draws customers on a weekly basis by turning shopping into a “game,” as its promotional literature puts it.

All the merchandise is affixed with price tags, but the tags don’t display yen amounts. Instead they have pictures of fruits and vegetables, 10 in all. The pictures represent prices, which range from a high of ¥5,250 (i.e., ¥5,000 for the item plus 5 percent consumption tax) to a low of ¥105. These prices are listed on charts alongside their corresponding symbols and posted throughout the store. The price tag on a particular item never changes as long as it remains in the store.

The charts are changed weekly. For instance, this week, perhaps, all the strawberry items cost ¥5,250, but next week, all the remaining strawberry items will be priced at ¥4,200. Each week, the line of a particular fruit or vegetable goes down one pricing rank until it reaches ¥105. The following week all the items previously priced at ¥105 are removed from stock and exported to Southeast Asia in bulk, which means no item stays in the store for more than ten weeks. The weekly price changes take effect on Wednesdays, thus explaining the name of the store. Not surprisingly, that’s the day they do their biggest business.

This system adds a touch of drama to the shopping experience. If a customer likes a particular item she can buy it right away or take a chance and wait til the following week when it’s cheaper, but then she risks the possibility that someone else will buy it. The president of the company told Asahi, “I want our customers to enjoy shopping as if playing a game. I wanted to change the image of the used clothing store, which tends to be dark.”

At first, the scheme was to try to replace the inventory as often as possible to keep people coming, but that meant changing price tags on a continuing basis to weed out unpopular items. It wasn’t until management hit on the fixed price tag system that they figured a way to not only streamline operations but make the process interesting for consumers.

As for procuring merchandise, Don Don’s method is similar to Book Off’s, Japan’s pioneer in used merchandise, which boasts 900 outlets. It bases the price it pays for a book on its condition and then places a seal on each volume that indicates how long is has been in the store. Every book that remains on the shelf for three months automatically gets reduced to ¥105.

When those don’t sell, they’re pulped. With the exception of some brand items, Don Don buys clothing from anyone by the kilogram: ¥500 for “very popular” items, ¥50 for “popular” items, and ¥10 for “useful” items. And they pay 50 percent more on Mondays and Thursdays. More significantly, they refuse very little that is wearable, since they can always sell it, again by the kilogram, to wholesalers in Southeast Asia. Just like produce.

Tattoos are forever, which is why they cost so much to remove

Thursday, June 28th, 2012

On second thought…

The weekly magazine Aera recently discussed tattoos, which became a contentious issue in Osaka after Mayor Toru Hashimoto not only prohibited city employees from gettting them but suggested that any who already had tattoos resign. Hashimoto believes that Osaka citizens are offended by tattoos, which tend to be associated with gangsters and other lowlifes. Many young people get tattoos for reasons having to do with fashion, but the majority of citizens don’t make such a distinction. Public baths and onsen (hot springs) tend to prohibit patrons with tattoos, even if it’s just a tiny reproduction of a butterfly.

The mayor’s pronouncement met with complaints from some corners, which grumbled about personal freedom and human rights, but the Aera article implies that it had the desired effect. One young man in his late 20s told the magazine that after high school he became a construction worker and got a fairly large tattoo on his back because all his construction worker friends had tattoos. But now he wants to take a test to become a civil servant and wonders if having a tattoo will be a liability, and is therefore seriously thinking of having it removed. When told that no one can notice the tattoo when he has his shirt on, the young man says that he figures if he does get a public job he will have to undergo a physical examination, and so the doctor will see the tattoo and may report it to his supervisor.

In the context of the article, this isn’t presented as paranoia but more like common sense. In any case, tattoos are painfully permanent, and having them removed involves a hefty investment and even more pain. Aera says that you can assume that whatever your tattoo cost to apply, it will cost 10 times as much to erase. The magazine reports that the number of people in Osaka who are having tattoos removed has increased noticeably since Hashimoto made his stand. But it’s not just in Osaka. One Tokyo cosmetic surgery service, Isea Clinic, says that since the beginning of the year the number of inquiries it receives about tattoo removal has gone from about 100 a month to 125. Most are from the people who have tattoos themselves, but quite a few are from people whose children have tattoos. The reason isn’t just employment. Some parents think their children have less of a chance of finding a marriage partner if they have a tattoo.

There are three removal methods: laser, surgery and skin grafting. The laser method is the cheapest, at about ¥10,000 per square centimeter of skin. However, depending on the tattoo, it is likely that a shadow of the original pattern will be left behind, so others will know that the individual used to have a tattoo. Surgery, which means basically gouging out the skin and then sewing up the wound, costs about ¥30,000 per sq. cm. The tattoo is gone completely, but a scar remains. A skin graft, which involves cutting a chunk of flesh from another part of the body and using it to cover the tattoo, runs anywhere from ¥700,000 to ¥1,000,000. As the Isea doctor says, it’s too easy to get a tattoo, which is why so many people regret it in the morning, so to speak. In the end they want it removed regardless of the cost. “They always tell me it’s OK to leave a scar,” he says. The price you pay is more than just money.

Photo courtesy of Joshua Noblestone

The Mujirushi house: Fans finally get total immersion

Friday, April 2nd, 2010

The model "wood house" near Kita Matsudo station. Sorry, they wouldn't let us take pictures of the interior.

The model "wood house" near Kita Matsudo station. Sorry, they wouldn't let us take pictures of the interior.

Mujirushi is the Elvis of that marketing sub-genre known as the private brand. Launched in 1980 by Seiji Tsutsumi, the chairman of the Saison retail group, as an inexpensive line of merchandise for his Seiyu chain of supermarkets, the “non-brand” (which is what mujirushi means) soon garnered a following thanks to its iconoclastic simplicity courtesy of Ikko Tanaka, who designed the line for Tsutsumi.

In 1983, Saison opened the first Mujirushi Ryohin store in Aoyama, Tokyo. By that point, the line had outgrown its original set of cheap food and household products to include apparel, stationery, accessories, even furnishings. Of course, the idea of having “no label” implied that the usual advertising and marketing costs attached to “brands” did not apply, but while the items weren’t as expensive as many brand products they weren’t cheap either, and the irony implicit in the Aoyama store’s subsequent success was that “no brand” could itself be a big brand. By the ’90s, when Mujirushi Ryohin Keikaku split from Seiyu it represented a distinct lifestyle to many people.

Mujirushi peaked in 1998 when it reported ¥13.3 billion in profits. But the company got cocky and opened stores faster than it could develop new products. It lost the simplicity of its original design model and by 2001 profits had dropped to ¥5.6 billion. That year, it had to destroy ¥12 billion in unsellable merchandise, mostly clothing. Already, other companies had appropriated the no-brand concept, like the drug and sundry retailer Matsumoto Kiyoshi, the apparel maker Uniqlo, the household goods store Nitori,and the myriad ¥100 shops that were features of every new mini-mall. But Mujirushi cleaned itself up and returned to its roots, and now it’s bigger than ever.

Continue reading about the Mujirushi house →

Jeans on the cheap

Sunday, October 18th, 2009

If you need jeans at 4 in the morning you know where to go

If you need jeans at 4 in the morning you know where to go

As apparel goes, jeans fill a unique niche. Originally marketed strictly as work clothing whose main sales point was durability, ever since the ’60s denim trousers have become ubiquitous, first as the uniform of the counter-culture, then as a template onto which various high-rent designers projected their hip cachet, and finally as pretty much the world’s de facto leisure wear. Levis, the original jean manufacturer, can charge anything it wants and in such a way became the standard for pricing. Anything more expensive than a pair of basic 501s was considered ostentatious; anything cheaper was, well, cheap.

Last March, discount clothier Uniqlo broke the thousand-yen barrier at its even cheaper retail subsidiary g.u. (or jiyu, which means “freedom”) by putting on sale jeans that cost ¥990. Since then, other cheapo retailers have followed suit and last week the discount chain Don Quijote announced that it would be selling its own “private brand” (PB) of jeans called Jonetsu Kagaku (passionate price) for only ¥690 per pair.

Continue reading about cheap jeans →

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