By  on August 18, 2009

TOKYO — Faced with tightfisted consumers and intensifying competition on price, some of Japan’s most storied retail players are rolling out more affordable apparel offerings.

Department store operators Seibu and Sogo, manufacturing and distribution group Onward Holdings Co. Ltd., mass market retailer Aeon Co. and multibrand luxury retailer United Arrows are all tapping into consumers’ tendency to trade down as fast-fashion chains like H&M, Forever 21 and Zara grow their presence here.

The Sogo and Seibu department store chains, both part of Seven & i Holdings Co. Ltd., have established a private label brand called Limited Edition. The brand, which aims to deliver quality fashion at low prices, will launch early next month. Limited Edition will cover more than 49 lifestyle categories including men’s, women’s wear, children’s apparel and home furnishings. Revenue is expected to reach 5 billion yen, or $52.7 million, in the first year.

The company will work with existing business partnerships as well as new clients such as high-volume apparel stores to produce the fast-fashion-priced items, which are considerably cheaper than department stores’ regular private label items. A jacket will sell for 12,000 yen, or $126, about half the price of what a similar item would cost at a department store.

Atsuro Tayama, who designs for local fast-fashion brands such as Hempel and Nancy K, will oversee the creative direction of a special segment of Limited Edition called LE by Atsuro Tayama, which will be rolled out to a limited number of Sogo and Seibu stores.

“The fashion industry is basically a lot-based world now. By producing 100,000 pieces of one item, H&M has shown it is possible to sell pieces at such a low price, but we have the initiative to do the same with price and quality with about 1,000 pieces,” Tayama said.

Department stores have been some of the hardest hit retailers in the current price sensitive climate as Japanese consumers trade down and spend less on apparel and accessories.

“I want to make a new fashion business model for the department stores,” Tayama explained. “Our challenge then is how to produce items for a low price while still maintaining quality. I think we have achieved this for the fall-winter season, winning the first battle.”

Aeon Co., which runs a string of supermarkets, drug stores and other retailers, is also tapping into consumers’ tendency to trade down. Last week it started selling jeans for just 880 yen, or $9, a pair. Later this month, the company plans to sell men’s long-sleeve shirts and ties for the same price.

Onward’s plan of attack involves the launch of a brand called Forste, which targets twentysomething women. This fall, it plans to open 15 to 20 units in department stores. Sales are projected to reach 3 billion yen, or about $32 million, in the first year.

Onward, which owns Jil Sander and will open Japan’s first Opening Ceremony store later this month, will expand its in-house manufacturing facilities for Forste apparel and accessories. Prices will be about 20 percent cheaper than those of similar brands in department stores. Prices range from about 3,900 yen, or $41, for a basic top to 38,000 yen, or $400, for a jacket.

United Arrows, known for its multibrand luxury stores, is also broadening its price range with a new line of White Label suits for men. The range, which promises high-quality polyester and wool blends, targets men in their early 20s. The suits start at 49,350 yen, or $520, much cheaper than the least-expensive suit the company currently sells for 71,400 yen, or $753.

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