October 2004

Special Focus on Apparel retailing
This issue contains a major focus on the state of apparel retailing. The report provides details on market share by channel, market share within men’s wear and women’s wear by channel, rankings of the top retailers, the top specialty retailers, top women’s wear, men’s wear and children’s wear retailers. Also included is a look at the most profitable. These statistics show the true state of apparel distribution and that concentration continues, with the top 100 firms now in control of 50% of the apparel market.
The real success stories are in the specialty store sector. No other part of the apparel retail industry has seen such convolutions in the last decade. Uninhibited by the cozy and stultifying relationships with bureaucrats and politicians that hamper change in the department store and GMS channels, the specialty store chains have been subject to unfettered competition on a scale unknown to most industries in Japan.
In 1994, the scale of overcapacity in apparel retailing was overwhelming. Chains like Suzutan lost more than 350 of its 600 stores, while Cabin too saw its chain slashed in half. Others simply went to the wall. This collapse, not seen in other sectors, was like the clearing of the arteries, allowing the sector as a whole to breathe again.

Daiei: the world’s longest goodbye
At last, after four years of predicting the demise of Daiei, Japan’s once largest retailer is finally heading towards official bankruptcy. Almost. Probably. We’ll keep you informed.

Editorial: Repackaging the senior market

Convenient Beaujolais
Convenience store chains have some of the best information systems in the world, used for a whole range of operations. Now, the same systems are proving useful in the branded wine trade. Demand for France’s quick-to-market wine, Beaujolais Nouveau, can now be predicted and planned for with ever greater accuracy.

More select shop expansion
Select shop chains continue to expand, adapt, and refurbish as competition in the sector intensifies due to more new retail entrants including some from the largest apparel manufacturers. Existing chains, including Beams, have to invest in order to compete.

Liz Claiborne returns to Japan
Following a retreat from the Japanese market after the cancellation of a joint venture with Aeon, Liz Claiborne will return to Japan next year with recently acquired brand, Ellen Tracy.

Aeon China established
Aeon has finally established a single company to run its operations throughout China. Until December, overseas retailers are restricted to operating different companies in different regions, but in a move designed to preempt deregulation, Aeon has signaled that its ambitions go well beyond just dominance in Japan.

Chanel Ginza HQ opening December
Chanel’s new Japanese headquarters opens in Ginza in December and will include a 1,250 sqm flagship. The investment affirms that for all the top luxury brands, Japan remains the number one market.

Japanese love of digital gadgets
Japan’s digital home electronics market got a big boost from the Olympics on the back of the excellent performance by Japan’s team in Athens. Flat screen TVs and DVD recorders have become must have items for many households.

Vivit Square mall to open December 1
Japan’s first 100% foreign-owned and operated mall will open in Chiba this December. It will include a number of innovations including five anchor tenants as well as more entertainment and leisure space than is typical for Japan.

Sanei buys Anglobal, prepares for European expansion
Sanei International is one of the fastest growing apparel companies in Japan with a successful mix of mostly women’s wear SPA operations. Having stated its intention to become a ¥100 billion plus company by 2006, it has made its first acquisition. As important as the sales volume, the acquisition provides vital European exposure.

Overseas fashion firms: ¥120 billion income
A survey of the declared income of corporations can often say as much about the accounting practices and transfer pricing of individual firms as about real performance. Nevertheless, the general trends can provide a hint as to overall profitability. The continued and sustained growth in the declared income of overseas fashion firms reflects real performance gains.

FolliFollie to hit ¥10 billion
While the Athens Olympics may have helped boost Greek jewelry and accessories retailer, FolliFollie, its success in Japan is actually much more about consistent retail investment and product development focused on the local market.

Ito-Yokado vs. Carrefour and Daiei beaten by default
There are too few examples of direct competition between leading Japanese retail stores, but a new battle is about to begin in Koshien in Kansai. Whereas observers are keen to see how Daiei stands up to an Ito-Yokado store opening next door, the real interest, however, lies with what the same store will do to results at Carrefour a little further away.

Isetan: a man’s store
Department stores are traditionally the domain of women, even when they’re buying clothes for their male partners. Isetan has changed all that with its newly refurbished Men’s Annex Building, now a year old and looking very strong indeed.

Oazo opens in Marunouchi, more development to follow
Marunouchi is already well on the way to becoming a glittering new center for retail and office space. Across the station a major new development by Mitsui will help to link Nihonbashi with Marunouchi as well as Ginza. And further down the way, Mori Trust is working with newly acquired affiliate, Parco, to boost the appeal of Shinbashi.

Overseas brand power
A major new survey of overseas brand preferences shows that consumers in their 40s lead the market, but are closely followed by their younger counterparts.

IC tags set to takeover in Japan
In the West, IC tags are still an idea for the future with numerous problems to iron out. In Japan, where hardware for the tags themselves is being developed and manufactured, the problems are being solved through actual implementation.

Household savings at 3 year high
Monthly savings rates may be down, but an improved economy means Japanese households still have a lot of assets sitting in the bank.

Short News Stories
United Arrows now in the UK
Louis Vuitton Namikidori store expands
Dior Ginza to open this month
Massimo Rebecchi signs distribution deal
Asprey & Goddard opens in Ginza
Coach to buy out Sumitomo?
Cashmere for just ¥5,900
Baume & Mercier targets Japan
Cartier to open in Aoyama?
L’Occitane Japan to expand stores
F by Fortuna Valentino opens in Omotesando
Upscale children’s wear competition
Cuddly Koizumi welcomes tourists
Nokia looking to expand sales routes
There is profit in socks
Isetan to open Ginza Barneys Store this month
Moreschi signs a new deal in Japan
Mycal Kyushu recovers fast
Francesco Biasia to expand in Japan
Bvlgari benefits from Japan focus
Tie your tie opens in Aoyama
Madame Zaza in Japan
Sazaby takes Balibarret independent
Nishimatsuya expands
Arcs consolidates store control
Kao to launch new brand via catalog, website
Record number of armed robberies
Tokyu increases cosmetics floor space
Tommy Hilfiger: new ranges, bigger stores
Tokyo department store sales fall again
Shopping portal provides assistance
Air-conditioned shirts and jackets prove a hit in japan
L’Oreal taps Japan unit to strengthen China sales