As part of its diversification drive, Isetan-Mitsukoshi plans to turn its small import business, Club 21 Japan, into a significant player in overseas brand distribution. This will feed both its own department store sales floors, as well as its up coming select shop chain. At the same time the influence of Isetan Shinjuku in fashion marketing will provide a powerful launchpad for any new brands it signs.
Isetan-Mitsukoshi plans to build up its brand distribution business, Club 21 Japan. Sales of Club 21 Japan rose to around ¥2 billion last year, but the department store group forecasts sales of ¥5 billion by 2018. Although much smaller than leaders like Look and Yagi Tsusho, the plan is to bring Club 21 Japan closer in size to the likes of Misaki Shoji, Aoi, Sanki Shoji and other distributors of overseas fashion brands.
Isetan-Mitsukoshi’s subsidiary, Mammina, used to be the main conduit for overseas brand distribution for the group. It has been the long-term licensee of Anna Sui, as well as Keita Murayama. Then in 2011, Mammina signed a deal with Club 21, a Singapore-based luxury fashion business owned by Christina Ong, and one of the largest distributors of luxury fashion in Asia. The initial deal was for Mulberry, a UK bag brand majority owned by Club 21 since 2003.
For both Isetan and Club 21, it quickly became clear there were real benefits in extending the collaboration resulting in the formation of Club 21 Japan, a business owned jointly by Mammina and Club 21 to handle other brands. Today, in addition to Mulberry, Club 21 Japan distributes Black Barrett by Neil Barrett, Rag & Bone and Alexander Wang, all brands with close ties to Club 21 in Singapore. For Club 21, the deal cements its presence in the Japanese market, making it easier to sign up promising brands for pan-Asia distribution rather than just Asia ex-Japan.
At the same time, Club 21 Japan will support Isetan-Mitsukoshi’s efforts to diversify beyond department stores, and in particular to build up its small format retail business. Its role will be to scour the world for up and coming fashion brands and designers to feed into both the directly managed sales floors within Isetan, and the small format select shops that are essentially edited versions of Isetan sales floors. The department store group operates some select shops in airports currently, but will open its first SC-based select shop in Tokyo Midtown in the Spring 2015, adding another in a new SC in Nagoya next Autumn. Both stores will feature a select range of overseas brands.
With Club 21 Japan’s help in sourcing, Isetan-Mitsukoshi buyers will be better able to keep stores fresh through the introduction of new brands. At the same time, Isetan Shinjuku’s reputation as the leading fashion department store will mean that the prominence it gives to brands signed by Club 21 will help encourage other retailers to buy into the brand later. Unlike some distributors, Club 21 offers the chance to move directly into Isetan’s existing, high end retail stores too.
Club 21 Japan will add two new brands a year over the next few years. The first brand to be signed up is Proenza Scouler, a New York leather goods to apparel brand that Club 21 Japan will begin distributing in 2015. A concession will be opened in Isetan Shinjuku in Spring 2015 with a stand alone store planned for later in the year. Sales of ¥1 billion are forecast within three years.
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