Coach Kristin Leather Hobo Bag | Source: Coach

TOKYO, Japan — In the United States, the Coach Kristin Leather Hobo bag retails for $298. In Japan, the same bag costs $711 (¥59,850).

This disparity in pricing is not unique to Coach. Premium and luxury fashion brands based outside Japan have long charged Japanese consumers a significantly higher price than in other markets for the same goods. But today, due to a strong yen and greater visibility of global pricing thanks to the internet, Japanese consumers are growing weary of this systematic markup.

As Mariko Sanchanta notes in a recent Wall Street Journal piece entitled “Web-Bargain Luxury Comes to Japan,” Japanese consumers are becoming accustomed to “discounts” at outlet malls and online sales, which, ironically, make prices equivalent to what much of the world pays at standard retail.

So why is it that premium and luxury brands have been able to charge nearly double for their products in Japan — a practice which on the face of it looks like price gouging?

While industry observers were highly sceptical about Abercrombie & Fitch’s overall strategy for Japan entry, CEO Mike Jeffries is right when he says: “We are premium brands, and we get premium prices in these markets.” It just so happens that premium prices are very high in Japan, because standard prices are very high.

Even with a relatively low consumption tax, the Japanese spend 13.4 percent of their income of food alone, compared to 9.9 percent in the United States. A five kilogram bag of rice — the Japanese staple — is often priced at around ¥2000 ($24), while CDs are priced at ¥3000 ($36).

The high prices are mostly a direct product of government policy. Protectionist tariffs not only increase the costs of imports, but keep domestic producers insulated from having to compete on price. Informal cartels are also at work in setting high prices.

In the fashion and accessories market, retailers like Beams, Ships and United Arrows maintain pricing for basics at around the same level — and in the process, set what consumers perceive to be standard price levels.

Usually, when foreign brands enter the Japanese market, they position themselves as “premium,” which usually means pricing at a higher level than the Japanese price for standard goods. For example, the price of a T-shirt by skate culture apparel brand Supreme, which costs about $25 in New York, was set at approximately $60 in Japan.

The rationale for this is simple: companies set prices as high as the market allows — and since the Japanese market sets prices higher than elsewhere, brands were able to indulge.

This worked when Japanese incomes were high and steadily growing, as they were from the 1960s to the 1990s. But when incomes peaked in 1998 and then started to steadily fall, the situation became less tenable, creating major opportunity for a clothing brand like Uniqlo, which set up production in China and was able to deliver high-quality goods at standard Western pricing levels seen overseas at Gap or H&M.

Today, the notion of undercutting standard Japanese pricing has spawned an entirely new strategy for entering the Japanese market. H&M and Forever21 have both generated significant revenue by offering product at a much lower price than what has traditionally been considered low. Indeed, nothing has scared domestic Japanese apparel brands more than the challenge to the psychological perception of what constitutes standard cost.

Beams and United Arrows, which have weathered the recession relatively well, responded to the recent fast fashion boom by creating their own lines of lower-priced Chinese-made apparel. Even designer brand Comme des Garçons has launched lower-priced lines like PLAY, alongside Chinese-made basics.

But as the rest of the fashion industry reorients itself and becomes much more competitive on price, Western luxury brands find themselves in a difficult position. Today’s Japanese consumers are less wealthy, pessimistic about their economic future and becoming accustomed to paying less. They no longer understand the 1990s-era logic of saving or going into debt in order to buy a luxury handbag. And thanks to Yahoo Auction, grey market arbitragers and a giant network of resale shops across Japan, there are much cheaper places to buy new or near-perfect luxury items than flagship stores. Indeed, consumers are also turning to industry offerings like outlet malls and sale sites like Gilt Groupe and Yoox.

Chinese tourists will help bolster demand, but as middle-class Japanese consumers flee the luxury market, brands may not be able to continue to keep charging artificially high prices. But for luxury brands, simply slashing prices is not an option either, as their pricing has been an important part of their strategy for communicating value and importance to customers. The question going forward is whether they can surf on the deflationary swells to slowly readjust pricing in a more stealth manner.

The U.S. price of $298 for a Coach handbag may actually be perfect for today’s Japan.

A version of this article first appeared on Néojaponisme, founded by W. David Marx, a contributing editor at The Business of Fashion.

Abercrombie & Fitch, Ginza | Source: Fashionsnap.com

TOKYO, Japan — After several years of “will they or won’t they” speculation, American casual fashion retailer Abercrombie & Fitch finally opened its first retail store in Japan this past December. The 11-story shop in Tokyo’s upscale Ginza neighbourhood is just steps away from Uniqlo’s flagship store and Swedish fast fashion brand H&M.

As with every big retail opening in Tokyo, the first day of sales saw long lines of customers and swift business. The rumoured haul: ¥50 million (or about $550,000). Even without the benefit of an opening party or major press event, Abercrombie was able to rely on a small group of Japanese fans who had previously bought the brand’s products as souvenirs on trips to Hawaii or the continental United States.

But the big question is, will Abercrombie be able to win over new fans in Japan and replicate the unbelievably successful Japanese market entries of other mass fashion brands?

So far, the signs do not look good.

At the moment, Japan is in the midst of a low-price fashion boom.  The only profitable brands are chain retailers like Uniqlo, H&M and Forever21, and the cheap domestic labels in the Shibuya109 shopping building. Yet remarkably, Abercrombie & Fitch made the decision to charge Japanese consumers nearly double its American prices.

In a poll of first-day A&F shoppers in Nikkei’s Marketing Journal, 61.7 percent of people found the prices “a bit high” while 18.3 percent declared them “too high.” Less than one-fifth of consumers thought the prices were on target. Once upon a time, American retailers made huge margins by setting higher prices in Japan, but today, gouging the Japanese consumer simply doesn’t work. Consumers are too smart for that.

Furthermore, most multinational apparel companies have found success in Japan by working with local partners to adapt their messaging, communications and brand image to fit the mature and sophisticated Japanese consumer. In contrast, Abercrombie & Fitch is pursuing an intensely American retail and marketing strategy that may alienate the vast majority of their potential sales base. The strategy is adequately well-done in terms of basic presentation and architecture, but their new Ginza store, in particular, clashes with Japanese fashion and shopping culture in almost every possible way.

For instance, most foreign retailers in Tokyo employ an exclusively Japanese staff, who behave according to the expectations of Japanese consumers, but Abercrombie & Fitch decided to make the brand experience so “American” that they have almost nobody working the shop floor who would be perceived by customers to be authentically Japanese.

Remarkably, the staff greets shoppers in English, rather than Japanese. Indeed, the best a Japanese consumer can hope for is a kikoku shijo – a returnee from overseas – who can at least speak the local language. While most Tokyo shoppers may like imported, international goods, they do not want to be forced to surface their rusty English during a commercial transaction.

The staff also fails to follow widely recognized principles of Japanese politeness. They are boisterous and many sing and dance along with the songs piped through the Ginza store, making the relatively cramped sales space feel even more claustrophobic for consumers.

To make matters worse, many of the male staff members have their chests exposed. Sex appeal may be a big part of the brand’s charm in the United States, but this particular masculine ideal of a “ripped chest” is completely out of sync with current Japanese fashion culture and the constant presence of half-naked men is off-putting to the Japanese customer — especially when crammed into tight spaces like elevators.

Successful brands in Japan use their shop floor staff as brand leaders and styling mannequins to show consumers how the clothes look on real Japanese people. At this, A&F also fails.

Like its American stores, Abercrombie’s Ginza flagship also reeks of strong American-style cologne — this, no less, in a country that’s famously perfume-adverse. Indeed, back in 2005, perfume critic Chandler Burr wrote a New York Times magazine piece called “Display It, Don’t Spray It” on the universal Japanese distaste for strong cologne and perfume. Yet A&F seems to pump its signature cologne through the ventilation system in a way that permeates the entire experience — and whatever you were wearing at the time for days after. Of course, many successful Japanese brands incorporate scent into their retail experience, but subtlety is the key. The smell should not carry with the customer.

But it doesn’t stop there — there are practical challenges as well. Visitors to A&F’s Ginza store complained in TV reports that they could not adequately judge the colour of certain products in the store’s extremely dim lighting, which is designed to feel like a late 1990s New York dance club. And, the elevator only goes to the 7th floor, forcing female shoppers to walk up flights of stairs to reach the women’s department in the store’s upper reaches.

Finally, possibly the most fundamental problem with A&F’s Ginza store is that it offers consumers few options for integrating the brand into his or her own life. The clothing screams the letters A&F at a time when Japanese consumers are looking for much more subtle branding on their apparel.

It’s interesting to note that the most popular luxury handbag at the moment is made by Miu Miu and looks much less openly branded than those made by competitors like Gucci and Louis Vuitton. While at the high street level, as we’ve seen with the success of Uniqlo, young Japanese consumers are increasingly looking for brands that offer them ways to create their own individual styling. A&F, on the other hand, offers no room for adaptation. You are forced to either buy into the entire package or buy nothing.

At the moment, Tokyo fashionistas are obsessed with classic Ivy League style and heritage American brands like Red Wing. But despite these areas of opportunity to connect with the current tastes of local consumers, A&F has made no attempts to style or merchandise its “fratboy” clothing to fit the current fashion ecosystem in Japan. In contrast, Gap has gotten very good at this in recent years — enabling the company to market their merchandise to Japanese consumers who are not necessarily Gap fans.

So how did Abercrombie get everything so wrong? Is it ignorance or arrogance? It’s hard to say for sure. Either way, Abercrombie’s entry into Japan is a perfect case study in how not to localise.

W. David Marx is a Contributing Editor of The Business of Fashion

The colours of Uniqlo | Source: Uniqlo

TOKYO, Japan — For the last two years, the inverted black triangle — Japan’s version of the minus sign — has infected monthly earnings reports at most of the nation’s retail chains. The global recession has been almost universally bad for the apparel market. Japanese customers are just not spending on fashion like they used to.

There’s one exception, of course: Uniqlo. 

For the fiscal year ending in August 2009, Uniqlo’s parent company Fast Retailing posted a ¥108.6 billion profit with ¥685 billion sales — outperforming initial projections. The brand’s comparable store sales for September 2009 were up 31.6 percent. In October, they were up 35.7 percent.

What’s more, these striking sales numbers have manifested themselves visibly in a real life consumer frenzy. Back in October, stylish young people lined up in droves to buy Uniqlo’s +J Jil Sander line, while everyday, middle-aged women swarm around the Heat Tech shelves at suburban Uniqlo outlets. On 21 November, two thousand shoppers lined up at the Ginza flagship store at 6am for an early bird sale. They weathered the cold and dark just for a chance to buy slightly cheaper versions of what they can basically buy at any time.

Back in January, BoF commented on Uniqlo’s singular success in 2008. Since then, their success has only grown. Tadashi Yanai — Uniqlo founder and Japan’s richest man — wants to hit a trillion yen in annual global sales by 2020. That means an expansion beyond the already staggering 780 stores in Japan and 110 stores in other markets around the world. Indeed, if Uniqlo’s formula continues to drive these kind of results, the brand could become Japan’s first truly global mass retailer.

But what’s the secret to Uniqlo’s tremendous success?

Falling incomes and a deflationary economy have clearly made Uniqlo’s low-prices much more attractive to Japanese customers. But Uniqlo are not simply capitalising on consumers who will settle for ‘inferior goods.’ The brand is making exactly what people want, at prices that make them feel good.

Perhaps the first secret to Uniqlo’s success is its universality. It offers something for almost everyone. Their +J collaboration with Jil Sander won over fashion elites, while pieces created with Tokyo Girls Collection attracted the chestnut hair and elaborate nail art crowd. The Heat Tech line — expected to sell a staggering 50 million units this season — has almost become a winter institution, while the animé-themed T-shirts were a hit with teens. Wives even love to get their bumbling husbands entire wardrobes of weekend wear from Uniqlo.

Second, while Uniqlo markets to a broad range of people, it speaks to different segments in their own language, using every possible media channel. For example, the sensational digital UNIQLOCK was a favorite amongst blog-savvy graphic designers, while the a special advertorial insert, UNIQLOGY, found in every issue of high-fashion magazine Popeye, speaks directly to the men’s style set.

After collaborations with Opening Ceremony, Steven Alan, and of course, Jil Sander, Uniqlo has achieved a certain amount of cachet with Japan’s fashion-forward crowds. But that doesn’t necessarily mean Uniqlo is now ‘cool.’ In fact, perhaps the brand’s most powerful asset is its neutrality. Wearing Uniqlo carries no meaning of its own. It’s as close as apparel has ever come to interchangeable LEGO blocks.

For young Japanese consumers in particular, Uniqlo’s ‘blank slate’ approach may be its greatest strength. Indeed, the days of Japanese consumers creating and expressing identity through brand identification is over. Judging by their embrace of Uniqlo, Japanese consumers are definitely not becoming ‘individual’ in a Western sense — wanting to only buy things no one else has. But they no longer want to be pigeon-holed by consuming a fashion brand that has an overly strong or defining identity.

Uniqlo’s widespread success means it’s a socially-acceptable brand (a huge concern for Japanese consumers), but other than that, the clothes say almost nothing: no logos, no design flourishes, no distinguishing marks. Uniqlo’s advertising rarely tries to inject a particular statement or identity into the brand, unlike the hipster sex of American Apparel or the “classic” preppie vibe of The Gap. Uniqlo is basically a Pantone-hued commodity, making it a perfect fit for both highly sophisticated and completely disengaged fashion consumers.

Even if the economy recovers next year, it’s hard to believe Japanese consumers will abandon Uniqlo for their previous pantheon of higher calibre brands. There is a sense that, for the last thirty years, everyone in Japan has paid too much for their clothing. Uniqlo’s ubiquity is a sign that Japanese consumers are gravitating towards more rational price points like those seen in North America. It’s clear that retailers can no longer force people to buy premium everything.

The amazing thing about Uniqlo is: nobody thinks the brand is offering them an inferior product in exchange for lower prices. Indeed, Uniqlo’s “cost-performance” generates tremendous goodwill with its customer base. The brand makes solid, well-designed apparel that keeps up with trends but — unlike H&M and Forever21 — lasts longer than a season.

With Uniqlo, Japanese consumers believe they are getting their money’s worth. And that feels very very good.

W. David Marx is a Contributing Editor of The Business of Fashion

Prada flagship store in Omotesando, Tokyo

LONDON, United Kingdom — The scariest news I have recently read about luxury was in Tuesday’s Financial Times. The Japanese, it seems, have stopped buying luxury goods. Luxury imports in Japan were down 10 percent and sales of LVMH in the country were down 18 percent in the first quarter.

And no, it’s not just the recession. “This is not a blip. This is a long-term shift in the market,” Brian Salsberg, the author of a McKinsey report on the Japanese luxury goods market, the world’s second largest, told the Financial Times. This is concrete evidence of a trend first reported on BoF one year ago.

The Japanese were once the industry’s most-favoured fashion consumers because of the speed with which they would adopt new trends. The evolution of a luxury market is a tricky thing you see. First new consumers will gravitate to the brands they’ve heard of, like Armani. Then they’ll begin to explore ones that are more niche, say Balenciaga. Then, if the Western world is anything to judge by, they’ll get disillusioned with the whole thing and just start buying their clothes at Zara, H&M and Topshop.

Here in the West, we’ve been working our way through the cycle since the Second World War. But those clever Japanese have moved through the whole evolution in just thirty years.

This is seriously bad news for the luxury brands that depend on Asian shoppers, which is most of them. And, it does not bode well for the post-future landscape either. The Chinese are most likely to mimic the Japanese in shopping habits. All those new stores brands are throwing up in second- and third-tier Chinese cities may never pay off.

So what will they do?

Patrizio di Marco, one of my favourite luxury executives, has recently moved from Bottega Veneta to Gucci. It was a brave career step. Gucci, with its reliance on logo-driven product, is a brand in transition. Di Marco told Bloomberg that to adapt to these trying times he’s refocusing the logo-driven merchandise and putting more attention on the mid-price range by doing things like adding exotic trims to fabric bags, and moving away from lower price points to retain luxury allure.

But will consumers want the bags with logos, crocodile trim or no crocodile trim? Personally, I’d rather carry a bag with no logo. And it seems increasing numbers of crucial Asian consumers are with me on this one. But, for Gucci’s sake, let’s hope I’m wrong. Next week they’re opening a store in Shanghai—it’s their 28th outlet in China.

Lauren Goldstein Crowe is co-author of the critically-aclaimed book, The Towering World of Jimmy Choo.

Somarta A/W 09, courtesy of Coutorture

TOKYO, Japan — Japan Fashion Week (JFW) is nearing its end, but has anyone really noticed that it started?

While the entire cities of Paris, Milan, and New York seem to get completely swept up in the glamour of their respective fashion weeks, the average Tokyo citizen is most likely unaware that Japan Fashion Week is currently happening. This is very odd, considering that Tokyo is obsessed with designer fashion to an extent seen nowhere else on Earth.

Why the lack of excitement?

The problem is that JFW occupies a very strange place within the nation’s multi-layered fashion ecology. For around thirty years, younger domestic brands showed in “Tokyo Collection” – a loose set of collection shows held over several months each season. But in 2005, government bureaucrats decided to organise an official “fashion week” so that foreign buyers and press could come and easily see most of the brands in just five or six days. The government now subsidises many of the shows with the idea of bolstering Japan’s textile exports.

This government intervention, unfortunately, has had mixed results. Sure, the government subsidies allow many young brands to realize their vision. But in general, the week suffers from a lack of name brands. Comme des Garçons, Yohji Yamamoto, Junya Watanabe, and Under Cover all show in Paris, the de facto capital for global fashion.

Most of the up-and-coming popular young upstarts with increasing international prestige – menswear powerhouses John Lawrence Sullivan and N. Hoolywood, for example – apparently do not want to have anything to do with JFW and schedule outside of the official proceedings. The end result is a relatively obscure brand line-up – one that says almost nothing about the actual state of Japanese fashion.

The lack of excitement is palpable at the JFW shows, where the front rows are populated by bespectacled retirees and corporate suits, with the occasional foreign journalist thrown into the mix. The most debonair and outrageous spectators are the fashion school kids who stand in the very back. Most of the top fashion editors do not even attend, as the brands will probably never be included in their spreads. Only the trade press covers every show. Celebrities are rare, and when they do show up, usually go incognito and stand in the back right when the doors close. Overall, there is very little of the glamour that creates a spectacle for JFW’s counterparts abroad.

This is not meant to knock the participating brands, who are usually highly competent and creative. Most share a slightly avant-garde, yet earthy vibe: making clothes for rich arty matriarchs rather than “fashion people” or aristocrats.

Motonari Ono A/W 09, courtesy of JFW

This year’s collections have been extremely dark, bordering on the post-apocalyptic. Motonari Ono looked to the final days 18th century decadence for frilly satin tops. GVGV delivered a less chromatic version of its aggressive rock chic. Matohu set aside its signature Asian robes in pastoral pastels for dark black and blue elegance with a nod to the ancient use of animal pelts in clothing. Aguri Sagimori went ’90s grunge with frightening black net dresses, leather-and-fur, and the prerequisite plaid and combat boots. Somarta’s masterful military-themed collection offered exquisite dresses and long coats in purple paisleys, like the high-society wardrobes of an invading alien civilization. Everlasting sprout had models in low gauge granny knits walking on a stage that looked to be the ruins of a Kansas antique shop from The Day After.

When not dwelling upon the imminent destruction of civilisation, designers also seemed to be much more accessible than normal, perhaps in response to a shrinking apparel market. Normally avant-garde and highly conceptual Hisui pushed a collection of sexy animal-themed pieces — like a giant rounded ostrich-esque feather skirt. In the past designer Chinami Kamishima has created Joan of Arc plate-armor breast-plates and other dramatic looks, but this time around, she chose wearable minimal black dresses and retail-friendly plaid trench coats.

The fundamental issue of Japan Fashion Week, however, remains the fact that attendance and attention to the shows gives you very little perspective on the direction of the Japanese market or Japanese “design.” We’ve known about the top Japanese masters since Paris.

Meanwhile, the Tokyo streets are still bubbling with unbridled fashion energy – a youth market completely ignored by JFW, other than some small overtures by talented pop designer Han Ahn Soon, the cartoon-y Ne-Net, and the quiet, organic fur fur. Tokyo Girls Collection and Shibuya Girls Collection (to be discussed in an upcoming BoF piece) attract 40,000 girls for “runway” shows of their favorite mass market brands, so the problem is not that Japan has ceased to be mesmerized by apparel.

If JFW could somehow secure a brand line-up that actually told the story of Japanese fashion — the complete totem pole from designer masters to up-and-coming talents to street favorites — they could probably create an event that forced the world to pay attention.

As it stands now, JFW is a side-show to Japanese Fashion rather than its prime time.

W. David Marx is a Tokyo-based writer and fashion market analyst.

Photo by Sean Wood, courtesy of MEKAS

TOKYO, Japan — 2008 turned out to be an incredibly successful year for Uniqlo — and Uniqlo alone. The Japanese media can no longer mention the mass retailer without using the word hitorigachi — meaning “sole winner” or “to reign supreme.”

In a toxic retail environment, where most major apparel chains experienced 10-15 percent declines in same-store sales for December, Uniqlo finished the year up 10.3 percent. This came on the heels of Uniqlo’s stellar November, with 32.2 percent comparable-store base growth and the largest recorded monthly sales in the brand’s history.

These accomplishments allowed parent company Fast Retailing to raise its consolidated operating profit projections for the August 2009 fiscal year to ¥99 billion ($1.1 billion, at current exchange rates)  — an expected 13.2 percent increase from last year. Net sales are currently forecast to hit ¥627 billion ($7.1 billion) — a 6.9 percent increase.

The recession has certainly made Uniqlo’s low price clothing an obvious choice for consumers, but economic anxiety cannot fully explain the brand’s success. Uniqlo deserves credit for its constant stream of proactive campaigns designed to win over a large number of diverse consumer groups, both in Japan and abroad.

Although Yamaguchi Prefecture-based Fast Retailing has a long history of selling apparel, the idea of Uniqlo as a Gap-style national brand only dates back to 1997, when the company teamed up with ad agencies to refine its image. Only a year into this new strategy, the company hit the jackpot with a widespread consumer boom for its fleece products. Uniqlo lost steam after the trend’s end, however, and eventually experienced declining profits in 2002 and 2003. Ever since, the brand has been engaged in a large number of innovative campaigns to win back public interest.

In just the last two years, Uniqlo has made a distinct effort to attract sophisticated customers beyond the middle-mass base. Their award-winning UNIQLOCK became the favorite screensaver of Japan’s young PC users thanks to minimalist graphic design, chronological functionality, well-choreographed adorable Japanese female dancers, and original music from producer Fantastic Plastic Machine.

The bilingual free magazine UNIQLO PAPER helped associate the brand with New York hipster culture thanks to the Chloë Sevigny on the cover and photography by Terry Richardson. In Japan, monthly advertorials in men’s magazines like Popeye let fashion-forward readers in Japan see new products styled according to the latest fashion principles.

Retail spaces have also played a key part in the brand expansion. Uniqlo’s Ginza store — right on the neighborhood’s main avenue — raised the brand’s profile as a purveyor of trendy fashion rather than generic basics. Last year’s UT T-shirt store in Harajuku employed the talents of famed creative director Kashiwa Sato to offer a high-tech shopping experience. T-shirts, including a Pantone-color series, are available in giant vending machine capsules within a space over-run with moving LED message boards.

These appeals to cutting-edge consumers, however, did little to change the brand’s reputation of being mostly dedicated to casual menswear. In order to better target women, Uniqlo tied up last September with “real clothes” fashion festival Tokyo Girls Collection and model Yu Yamada to produce a series of sweater dresses for the Shibuya 109 set. The company further targeted young women with new products such as the “beautiful leg” stretch denim (using popular model Norika Fujiwara in the TV commercials) and a “bra-top” that puts brasserie-like pads inside of a tank top.

Despite such narrowly focused marketing efforts, Uniqlo never alienated its middle-market, middle-aged consumers, who mostly shop at the brand for the low prices, laid-back styles, and easy access. The incredibly functional, but not particularly stylish “Heattech” line of winter under items is currently selling-out nationwide despite a production run of an unprecedented 28 million pieces.

Surveys indicate that Japanese consumers are not just buying Uniqlo out of desperation but actively like the brand. In the yearly TBS General Consumer Preference Survey, Uniqlo took the top “preferred brand” ranking in 2008 for women in their 20s at an incredible 41 percent — beating out perennial favorite Louis Vuitton (26.7 percent) for the first time. Just a year before, Uniqlo had only hit 23.1 percent with the same survey group.

Admittedly, most consumers use Uniqlo products as invisible inner-wear rather than key wardrobe items. According to a survey in Nikkei Marketing Journal on January 16, 62 percent of women and 61 percent of men who buy Uniqlo mostly purchase shirts, turtlenecks, and sweaters. Many young customers have ceased thinking the brand is unfashionable, but they still do fear that others will easily identify the Uniqlo in their daily wear. As Japanese fashion blogger Dale wrote on his site Elastic, however,  “Uniqlo is fashion’s most famous supporting actor!” In other words, fashionable young consumers rely on Uniqlo to “pad” their daily wardrobes, but then let high-fashion pieces act as the most visible and memorable pieces.

Uniqlo’s success has come, of course, at the expense of other retail sectors. According to the previously-mentioned survey in Nikkei Marketing Journal, 45 percent of consumers who increased their shopping at Uniqlo curbed their shopping at department stores and fashion buildings (like PARCO and Marui). This set of consumers have become fully satisfied with Uniqlo’s quality and price. Furthermore, compared to “fast fashion” rivals H&M, Zara, and The Gap, Uniqlo has a distinctly Japanese design sensibility that fits the Japanese body and closely responds to the industry’s other trends. The items are also so neutral and basic that each consumer segment can adapt the brands to their own specific wardrobe needs: somewhat like American Apparel, but with lower prices and a more accessible brand identity.

Uniqlo currently manufactures over 90 percent of its products in China. Despite general squeamishness about Chinese-made goods and a reputation for being the most “quality-conscious” customers on earth, most Japanese consumers now believe that Uniqlo’s cost-performance is quite high. While these Chinese factories seem to be serving Uniqlo well, the company is making an attempt to diversify production capability. Fast Retailing has just inked a deal to create a joint venture in Bangladesh and appears to have high hopes for new factories in the developing nation.

On the retail side, Uniqlo’s global roll-out has been relatively successful so far, with branches established in the U.S., the U.K., France, China, Korea, and Hong Kong. The brand will also be moving into Southeast Asia soon, with its first location in Singapore scheduled to open in April. Uniqlo is also actively planning market entry for Germany and Russia. And, with a menswear-only store opening in London’s Selfridges, Uniqlo is developing a strong niche position in the West as a supplier of clean and simple “Japanese style” at an affordable price.

With an economy that looks likely to worsen throughout 2009, Japanese customers will certainly be inclined to continue shopping at Uniqlo. If the brand continues to hone its image as a fashion-forward company with high-quality products, Uniqlo will no doubt maintain its status as the top dog in the industry. This is not the fleece boom redux: consumers are not buying Uniqlo to participate in a fad. They are buying Uniqlo because the products meet their standards and fit their current needs.

Uniqlo is on the exact same page as Japanese customers — and that can never be a bad thing.

W. David Marx, Chief Editor of MEKAS, is a Tokyo-based writer and fashion market analyst.

Comme des Garçons for H&M

TOKYO, Japan – Back in September, H&M experienced one of the most successful Japanese market entries in recent history, with its first store in Ginza drawing incredible mass media coverage and never-ending lines. Now two months later, H&M will open its next Japanese store on November 8 in the youth fashion district of Harajuku.

Japanese customers lucky enough to make it through the long queue on Saturday morning will be the first worldwide to be able to buy the latest limited-edition guest-collaboration line: H & M COMME des GARÇONS. For the rest of the world, H&M Comme des Garçons will debut on November 13 in more than 200 H&M stores around the world.

To learn more, we sat down first with H&M’s Creative Advisor Margareta Van Den Bosch and Brand & New Business Director Jörgen Andersson in Tokyo to talk about the Rei Kawakubo collaboration.

BoF: Please tell us the basics of the H&M Comme des Garçons line.

Van Den Bosch (V): There are twenty pieces for men and thirty pieces for women. There are some accessories. I think it feels like a typical Comme des Garçons collection. Rei Kawakubo made all the samples for us. She made the patterns. We had a lot of sending garments between us. We only met two times, but we had a lot of correspondence with garments. She would see every style and say yes or no. She watched every detail and approved everything.

BoF: Where there limits on materials or extravagance?

No. Of course we talked about the idea that some pieces could be at a lower-price level and some could be a little more expensive. In terms of quality, we worked with wool and cotton and other high quality fabrics. Some of the pieces are at the upper price level but we also have T-shirts.

Andersson (A): When we first approached her, we approached her with the philosophical idea of “contradiction.” There is a contradiction between H&M and Comme des Garçons. H&M is very mass market, selling to reasonable prices. Whereas CdG has a completely different price level and is also very artistic. So I think she was then challenged to see, how can I maintain my integrity as a brand, but meet the demands of the mass market. So I think she went into the creative process with that in the back of her head.

V: We also thought it was nice after (Roberto) Cavalli — a very sexy, glamorous designer — to choose someone like Kawakubo who is arty and cool. So I think it’s a big contrast.

BoF: Will there be more H&M CdG product allocated for the Japanese market?

A: We have estimated that the demand will definitely be highest here, but we are still trying to balance what we do in all markets, trying to balance between the mass market and exclusivity to create “massclusivity.” Because we still believe if you buy the show piece [dress], you don’t want to see too many other women dressed in the same way. It is limited-edition. It’s supposed to sell out, but maybe the previous collaboration being sold out within half an hour, that’s maybe a bit too fast. Because then there are a lot of disappointed customers. Hopefully we have managed to find a good balance in quantity.

But we also want to tell the customer, you have to be there when we open up the store in order to make sure to get something. I make the comparison with trying to go to a concert: we sell tickets but you have to show up. You can expect to still get tickets after a week.

BoF: Will you do another production run if the line sells out immediately?

A: No. We did one.

BoF: Is the sizing of the collection going to fit like CdG or H&M?

V: We have made the pieces to our fit, our measurements. But these are her patterns, of course.

BoF: Will the collection be sold at locations other than H&M?

A: We will work together with 10 Corso Como in Milan and in Seoul. So it will be picked up by them, because we did a similar collaboration with them when we did Marimekko. When they heard about this new collaboration, they contacted us again and said, can we sell it? H&M is not yet in Korea, but we thought, why not? Our ambition is to spread H&M around the globe so if we can get into Korea we think it’s fabulous.

BoF: Are the expensive pieces the most expensive pieces that H&M has ever sold?

V: We also had a dress in the Cavalli collection at the same price point.

A: When we did the collection with Victor & Rolf, we did a bridal dress. I think we did only 1,000 pieces, numbered. And then we continued that with Roberto Cavalli, making a few red carpet dresses that were also numbered. That was highly appreciated by the customers.

So I think people buy into the fact that it’s limited. But a bit more sad, we saw those pieces traded on Ebay a half an hour later. So they become like collector’s items.

BoF: What is the financial relation between H&M and Comme des Garçons?

A: The business model is between the designer and H&M. But for obvious reasons, we take the responsibility for the commercial risk. We have to take that, because we know our territories: which shops to place it in, where to place it, how to display it, etc. That’s something we have sixty years of experience in. But where we don’t interfere is in the design. So we will never control or guide too much of the design, because the creativity is what we are buying. The production and the handling, the more retail side of it, I would say that we are pretty good at that.

So for us it’s basically two brands coming together: H & M COMME des GARÇONS. Theoretically we’re creating a third brand, which is only going to exist from half an hour to a week. That’s the time span of it. The approach that we have is the same as creating a new brand. The packaging, marketing, PR, and distribution have to fit both brands. It has to be win-win, otherwise no designers would do it, except for financial reasons. But the collaborations we have done, obviously the financial is one thing, but I felt that it has been a sincere wish [of the designers] to reach out to a wider audience. I think that has driven the designers to accept our invitation.

BoF: How do you top Rei Kawakubo?

A: That’s something we have to think about on Sunday morning!

But people said that when we worked with Karl Lagerfeld as well. We started with Karl, and it was supposed to be a one-off. But then getting all the feedback from the customers and the sales, everybody loved it. I personally got a letter from a woman who said, I just love H&M because all my life I have dreamed of wearing a piece by Karl and all of a sudden you’ve made it possible.

And then we said, let’s do something completely different, so we went to Stella (McCartney), which is closer to our type of design and our customers. So I think it’s about trying not to think linear, but think different. But keep the same idea. We like expressing the business idea in the product or a collection, instead of a commercial. But it will demand some thinking before signing up the next one.

It was extra fun going from Roberto Cavalli to Comme des Garçons, because it proves our point that fashion is not about one style. Roberto Cavalli’s fashion and Rei Kawakubo’s fashion are just two ways of expressing fashion. So we can keep doing the same business idea of collaboration but then hopefully keep surprising people with choices that are a little bit fun. We like to believe that fashion can be fun, not pretentious.

V: And I think they both attract different customers.

A: From reading what people write on the internet, the customer who queued up for Roberto Cavalli might not the customer who will queue up for this collection. We will attract a totally different customer for this, but the more people we can get to visit H&M and realize that we have something for everyone, the better.

A: Definitely. We are putting more and more emphasis on online, because that’s where our customers are. And secondly, we know that, especially with this collection, people love to look at the collection and make a shopping list. So we put a lot of emphasis there. The commercial and the print ads are more of an image, not showing the product much. They basically drive traffic to the homepage, and on the homepage they’ll see the product and all the stores carrying it.

W. David Marx is a Contributing Editor of The Business of Fashion and Chief Editor of MEKAS. This is an extract of a more in-depth interview which can be found at MEKAS.

TOKYO, Japan – After two years of intense rumours and breathless anticipation, Swedish fast fashion giant H&M finally opened its first Tokyo store on September 13 in the ritzy neighborhood of Ginza, right down the street from competitors Zara and Uniqlo. When the staff cut the ribbon at 11 a.m., somewhere between 3,000 and 5,000 Japanese customers (mostly young women) waited in line for their chance to visit the 1,000 square-metre, four-story retail space. Now, twelve days later, the lines continue to stay long, with around 8,000 people visiting the store daily.

An incredible success? Although these long lines may help pay back the reported ¥2 billion launch expenditures, a little perspective is required to know what it all means.

Tokyo’s retail culture is all about lines. Famed donut purveyor Krispy Kreme opened over a year ago, and you still have to wait at least 20 minutes to buy a dozen glazed. There may be a cultural element to the obedient queuing, but the environmental conditions are mostly to blame. The Tokyo-Yokohama area alone is home to 20 million people, and there are at least 40 million in the greater Kanto area. All of these people conceivably come to Tokyo neighbourhoods like Ginza and Harajuku on the weekends to shop. This kind of population congestion means that H&M could achieve these amazing crowds with only a 28% recognition rate amongst Tokyo-area women in their 20s and 30s.

Also, Japan’s mass media have a pack mentality and are always obsessed with the latest retail novelty. While H&M did a good job messaging to a wide selection of Japanese magazines and different taste cultures, the wall-to-wall TV coverage worked to spread the word to more mainstream shoppers. The result was a lot of people out on the street at the right time on Saturday morning, which then created an even better media narrative and brought more people out the next week.

While these long lines tend to stun the foreign press, they actually have little predicting power of bona-fide long-term success. There is a common pattern: a hot brand is packed for months; the brand finally opens more stores; the exclusivity goes away; customers move on to the mass media’s new favorite donut shop or fast fashion brand.

There is no doubt that H&M’s version of “fast fashion” is definitely new to Japan. But, the fashion market here is already so diverse and multi-tiered that it may be like trying to impress calculus students with algebra. Japanese consumers already love a wide range of inexpensive domestic lines that adapt foreign trends to distinct Japanese sub-cultural tastes.

A lot of Japanese critics have stubbornly assumed that H&M will ultimately fail to meet the “high quality demands” of Japanese customers, but H&M is probably no different than the aforementioned domestic labels on this front.

In the end, H&M’s greatest advantage may be its incredibly low prices. Most foreign brands come to Japan and charge more than at home. For example, The Gap in Tokyo is about twice as expensive as it is in the USA. H&M bravely has gone the other direction, aiming to match global pricing. So now H&M is one-half the price of Zara in Japan, thereby making most other Japanese retailers look relatively expensive. If Japanese consumer spending continues to decline, this will play into an even stronger position for H&M.

H&M’s next store will hit the youth district of Harajuku in November. The Ginza location was perhaps too “elegant,” so this should be a better test for the brand to forge a connection with Japan’s critical youth market. The Harajuku opening will correspond with the release of the special Rei Kawakubo collaboration line, sure to bring in a rush of leading-edge consumers.

W. David Marx is a Contributing Editor of The Business of Fashion and Chief Editor of MEKAS. This article is an extract of a more in-depth article on the H&M opening which can be found at MEKAS. Photo by Sean Wood.

TOKYO, Japan – Just before the fashion world turned its laser focus on New York, a lesser known semi-annual week of fashion shows in Tokyo failed to garner much attention.

Not surprisingly then, a key activity during Japan Fashion Week is listening to other people grumble about Japan Fashion Week. Although Tokyo is one of the world’s most important fashion cities, overflowing with amazing daily dressers, avant-garde masters, and street fashion innovation, the organized collection week has yet to muster up a global impact on par with Paris, Milan, or New York.

And the problem is not just international reception: most of the cooler domestic Japanese brands aren’t even on board.

Long ago, there was a very loose event called Tokyo Collection, which stretched seasonal shows over three months. In 2005, the Japanese government stepped in and concentrated most shows into a single week, enabling foreign buyers and media to stop in briefly and spread the gospel back home. The bureaucrats understandably saw Japan Fashion Week as an important step towards promoting exports for Japan’s domestic designers and apparel producers. They are also generously helping out young designers pay for the costs of a collection show.

That being said, this is fashion, and front-and-centre government sponsorship creates some dissidence in the super chic brand image the event needs to succeed. Fashion weeks elsewhere are about glamour, celebrities, parties and exclusivity. Not Tokyo. The crowd is a strange mix. Front row: trade journalists, foreign invitees, greying bureaucrats and corporate VIPs in boxy suits and company pins. Back row: fashion school students.

Without the mass popular brands (seen at Tokyo Girls Collection) or the internationally-feted Japanese brands like Comme des Garçons, Junya Watanabe, Undercover, and Number Nine or the coolest men’s brands (who intentionally show after JFW), the line-up does attract the Japanese style establishment. Only rarely do editors from the top fashion magazines come by. Since the brands are new (and too artsy for 95% of Japanese women), the week only gets serious coverage from trade publications.

But in light of these issues, the week is actually quite rewarding, and the brands, while not super influential, are on-the-whole interesting.

First and foremost, the total lack of glamour returns attention to the clothing. No one is celebrity-spotting. When the show starts, the crowd gets serious and dedicates themselves to the collection. With no hype to
distract, the week’s gossip and chatter is about cuts, patterns, colours, and materials (and the aforementioned problems with JFW.)

Second, the participating brands are generally artistic and diverse, reflecting many facets of the Japanese fashion experience.

The most dominant aesthetic this season combined Japanese traditional inspiration, organic materials, and soft layered styling. For example, Matohu reinvented the Asian robe as a sexy feminine item, while fur fur looks like finding a treasure chest of earth-toned beauty in your grandmother’s attic. Tiny Dinosaur made men’s suits out of Japanese fusuma door material. Young Aguri Sagimori went achromatic, but still found inspiration in Japan’s literary history by printing tiny Japanese texts as a grey jacquard.

In the opposite corner, there is another set of brands that takes the pop obsession of Tokyo’s streets into a deeper fashion context. mercibeaucoup, imagined a subcontinental ethnic costume made from earth tones over pop comic prints over big pastel solids over classic gingham over trad red-white-and-blue over madras madness over stripes. Zechia did freak-folk pop: psych’ed out planet pattern dresses and multiple-sizes of black-and-white stripes. mint designs, on the other hand, printed newspaper texts in primary blue and red over nylon raincoat material. Mikio Sakabe continued his retro-future Stepford Wife take on 1950s sunny elegance, while G.V.G.V. mixed Helmut Newton superwomen and Futurist geometry.

Overall, Japan Fashion Week does bring out one strength of the Japanese market: the infinite number of small indie brands with unique vision and a low production run. This kind of market fits perfect with a new era of consumers mixing and matching in a search for the most perfect fashion individuality.

JFW may not be the voice of Japanese fashion nor a spawning point for world-conquering designers, but still works quite well as a showcase for some very distinct viewpoints on clothing.

By W. David Marx, Contributing Editor of The Business of Fashion and Chief Editor of Mekas. Photos by Sean Wood, courtesy of Mekas

TOKYO, Japan and STOCKHOLM, Sweden – Some H&M collaborations of the past (Roberto Cavalli, Viktor & Rolf) were more memorable for the pre-launch buzz and subsequent hysteria around the world than they were for the clothes themselves. So ever since Rei Kawakubo announced her upcoming Comme des Garcons collection for H&M, fashionistas have been wondering whether Kawakubo will bring some of the best of Japanese avant-garde fashion to the masses without diluting her signature style.

Well the wait is almost over. W Magazine wrote about the collaboration in its September issue and on Friday, Fashionista.com posted the first photos of the complete collection. In typical lightening speed, the blogosphere has been passing judgment and at first glance, it seems many CDG fans are underwhelmed by Kawakubo’s efforts, while mainstream customers don’t quite get it.

Over at Cafe Mode, France’s pre-eminent fashion blog (which is now owned by the French daily, L’Express), blogger Geraldine Dormoy says that she will show up on the day the collection debuts, but mostly to see who will actually be buying the clothes. That’s not a ringing endorsement either.

It makes one wonder why Kawakubo decided to do this collaboration at all. It was always going to be tough to translate CDG’s directional, deconstructed aesthetic for mass market tastes. And, since the brand’s many loyal fans are already willing to drop some serious money for a piece of Comme’s coolness and since there are already more accessibly priced Comme des Garcons pieces available for those with tighter budgets, the target market for this collection is unclear.

Could the basis for the collaboration be publicity and brand building? Roberto Cavalli worked with H&M to build brand awareness amongst younger customers and attract private equity investment. Similarly, Viktor & Rolf’s designed for H&M to establish themselves in the high-street fashion consciousness (and they recently parlayed this into an investment from Diesel’s Renzo Rosso). Kawakubo, on the other hand, is notorious for being reclusive and media-shy, and it is unlikely that she is looking for investment (as her business is self-financed and she seems unwilling to pander to private investors).

That leaves the design fee. In addition to the massive PR boost, Stella McCartney reportedly also earned a huge design fee for designing for H&M. Could Kawakubo be looking for some quick cash injection from H&M to maintain her financial independence?

The real answer probably has more to do with Kawakubo’s knack for collaborating with others. She recently unveiled a collaboration with Louis Vuitton, and she has built her own collective of designers under the CDG banner, including Junya Watanabe and Tao Kurihara.

In any case, it’s all speculation at this stage as to how the collection will perform, but as more and more ‘hi-low’ collaborations are announced and the novelty has begun to wear off, designers should be very clear about the objective of such collaborations, and ensure that the rewards are commensurate with the risks. We’ll see how it all turns out when CDG for H&M his the floors in November.

UPDATE: IMAGES FROM FASHIONISTA.COM REMOVED AT THE REQUEST OF LAFORCE+STEVENS ON BEHALF OF H&M.

Photo courtesy of W Magazine.