Making It in Japan
The Japanese retail market isn’t an impossible dream
At first glance, most apparel manufacturers believe that breaking into the Japanese retail market is a little like breaking into Fort Knox.
It seems nearly impossible. But it can be done.
Caroline Athias, co-founder of Blue Cult jeans, started chipping away at the Japanese market a little more than a year ago when she participated in the first Designers & Agents Inc. contemporary trade show in Tokyo.
Initially, the French blue jean designer thought her foray into one of Asia’s toughest export markets wasn’t going to have a happy ending. But she soon was pleasantly surprised.
“We didn’t know what to expect at all,” she said. “In Japan, business is done very differently. Buyers come to you and they look. In the United States buyers come to you and they write.”
After that first show in March 2002, only a few orders trickled in for Blue Cult jeans, a men’s and women’s denim collection that retails for more than $100 a pair of jeans.
But at the second show the following October, the same retail buyers came back and started writing more business with the jean maker, based in Vernon, Calif. “They want to make sure you will be around for a while, that you’ll be back next year and the year after that,” Athias explained.
Now about 20 percent of Blue Cult’s revenues comes from exports to Japan.
Athias was sharing her Japanese experience with a handful of other Southern California manufacturers interested in expanding their markets and their revenues. They gathered at a Newport Beach event organized May 29 by the U.S. Department of Commerce, which has been on a major push to get U.S. apparel makers to venture overseas into new markets. For the first time, the Commerce Department is organizing a U.S. pavilion at the Madrid International Fashion Week from Aug. 29 to Sept. 1.
Three time’s the charm
Larry Brill, director of market expansion in Commerce’s textiles and apparel office, told a handful of apparel makers that infiltrating the Japanese market doesn’t happen overnight. It usually is a three-year process.
“The first year you will lose money. The second year you will break even, and the third year you will make money,” Brill explained. “A lot of Japanese criticism is that U.S. companies don’t have enough gumption to stay with it.”
Brill noted that exporting to untapped markets is a good way for apparel manufacturers to hedge the economic ups and downs that have been occurring in this country. “If 20 to 25 percent of your sales were in exports, you would be sitting pretty when the market goes down here. There is no sense in being insular,” he said.
Image concious
The Japanese consumer is hungry for trendy clothing that evokes the California lifestyle. They’re even hungrier for branded California goods that are well made and use quality materials. That worked to Blue Cult’s advantage.
“In Japan, the buyers touch the fabric. They turn the jean around. They look at the stitching, the quality of the denim,” Athias said. “The first things the buyers say is, ’Nice quality.’ In the U.S. they ask ’How does it fit?’”
Japan has become such a burgeoning market for Blue Cult that the company is forming a joint venture with a Japanese distributor to set up a separate Blue Cult Japan office to control which stores end up with the collection.
“The Japanese market is very much image aware,” Athias said. “You cannot be in stores that do not represent your image.” Barbara Kramer, a partner in Designers & Agents, expanded the company’s trade shows to Japan two years ago. Previously the shows were restricted to New York and Los Angeles.
“After Sept. 11, we noticed that at our Los Angeles show, there were no Japanese buyers attending. Normally that is a real active market for Japanese buyers,” Kramer recalled. “Some of our manufacturers said, ’Why don’t you go to Japan to start a show?’”
The result was that Designers & Agents launched its first Tokyo trade show in March 2002. It is now held every six months. The next show is in October.
“Four shows later, we are definitely a resource for Japanese buyers,” said Kramer, who hand selects the apparel makers who participate in her trade shows. Last March, about 30 manufacturers went.
