Guess in Japan again

Guess left Japan more than eight years ago but is now back with its first store opening this month. Last time it licensed its brand to a local firm, but this time around Guess is following the market leaders with its own direct operation.

Guess will re-enter the Japanese market this month with a store in Harajuku. Located in Laforet the new store will sell the full line of apparel and accessories, 80% for women. More stores will be opened in March including Namba Parks in Osaka and Canal City in Hakata.

Despite having 1,690 stores in 88 countries, the US denim brand has almost no presence in Japan. Guess used to be operated through a licensing deal with Itochu Shoji, originally signed in 1994. A decade later sales were reported to total around ¥7 billion from 15 licensees. This led to brand dilution, leading Guess to demand more retail stores selling imported lines. Itochu put together a store investment plan, and opened a prominent shop on Meiji Dori, but efforts to bolster the brand didn’t bear fruit. Guess finally pulled out eight years ago, although there are still some Guess sales in Japan for footwear and watches.

This time Guess is going solo. In February last year it set up a local subsidiary, Guess Japan LLC, and opened a showroom in Kita Aoyama in May. Guess plans 40 locations and sales of ¥6 billion within five years. Stores will be located in stations and SCs, as well as a few stand alone flagships and some outlet stores – accessories only shops are also planned. The core product sold in Japan will be premium denims priced at between ¥8,000 and ¥20,000 – around 1.2 to 1.3 times home country retail – but existing global licensees of accessories will be tapped to supply Japan as well. 70% of product will be from existing sources with 30% manufactured specifically for Japan, using Guess Korea’s manufacturing capacity to shorten production cycles.