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Thom Browne and Cross Company Plan Asian Expansion

Thom Browne is plotting his future with his new Japanese partner, Cross Company, with plans to open a flagship in Tokyo.

TOKYO — Thom Browne is plotting his future with his new Japanese partner, Cross Company.

The company, which manages a string of multibrand fashion retailers and manufactures apparel, agreed this month to buy a 20 percent stake in Browne’s business for an undisclosed sum. Cross and its president, Yasuharu Ishikawa, will also establish a new company called Thom Browne Japan to oversee the brand’s business here; its first order of business will be to open a Thom Browne flagship in Tokyo in fall 2010.

“It’s one place in the world [where] I feel like they really understand what I do,” Browne told WWD in an interview at Cross’ headquarters. “The Japanese, I feel, are the most confident in trying new things. I think — especially with the small nuances that I do with my collection — they really understand that and appreciate it.”

The men’s wear brand, known for its cropped pants and runway antics, rings up sales of about $6.3 million worldwide but has experienced financial difficulties. Ishikawa was blunt about the seriousness of Browne’s situation. “If we didn’t support him now, he might have met his end,” he said, adding Cross might eventually increase its 20 percent stake in the business. “This period of economic depression and deflation is actually the perfect time to dash ahead full force.”

Ishikawa and other Cross executives said they are bullish about the brand’s growth prospects in Japan. They said they expect Thom Browne Japan’s sales to grow to at least 10 billion yen, or about $105 million, by 2016, although they declined to quantify the current size of Browne’s business in the country. Ishikawa said Thom Browne Japan, like Cross Company, might even go public at some point.

“Just because we are in a recession, it doesn’t mean only cheap things will sell,” Ishikawa said. “It’s a matter of creating demand for products…that [consumers] will buy regardless of whether they’re expensive.”

Cross executives are evaluating locations in both the Ginza and Aoyama districts for the location of Browne’s first flagship in Japan. Wonderwall’s Masamichi Katayama, the mind behind the redesigned Colette in Paris and a host of other galleries and retail outlets, will design the new store.

Ishikawa also revealed that Cross is considering launching Thom Browne secondary lines for both men and women through licensing deals. The executive estimated secondary lines and licensing agreements could comprise as much as 50 percent of Thom Browne Japan’s business when it hits the 10 billion yen mark.

Browne’s agreement with Cross also extends to the distribution rights for the brand elsewhere in Asia, but executives did not elaborate on plans for those markets.

“I think we’ll do a lot of things together,” Browne said.