Deal Puts Fred Segal Brand in Japan

The retailer's new owners are also looking to open stores in unusual locations such as hotels and airports.

Fred Segal store in Santa Monica, Calif.

Fred Segal is taking its edgy Southern California heritage to Japan.

This story first appeared in the November 20, 2012 issue of WWD.  Subscribe Today.

Sandow, a New York-based firm that builds multichannel, vertically integrated brands, which purchased Fred Segal in January, has formed a long-term partnership with Mark Styler Co. Ltd. to introduce Fred Segal in Japan beginning next year.

As part of the agreement, Mitsubishi Corporation Fashion Co. Ltd., a subsidiary of Mitsubishi Corp., will manufacture Fred Segal-branded product for distribution in the Japanese market. This marks the first time in more than 50 years that the Fred Segal name has been used outside its original Los Angeles locations.

“It will be highly designed and highly curated. Here in the U.S., we’ll be approving everything and will be very careful and very selective on what is produced and brought out in the Japanese market under the Fred Segal brand,” said Adam I. Sandow, chairman and chief executive officer of Sandow. The Fred Segal-branded product will be fashion forward for the Japanese market.

With locations in Santa Monica and West Hollywood, Fred Segal has become synonymous with Los Angeles style and casual chic. The retailer operates an array of shop-in-shop boutiques that offer highly curated merchandise ranging from jeans and T-shirts to designer shoes and handbags, as well as a salon, yoga studio and restaurants under its recognizable red, white and blue stripes and ivy-covered walls.

The Tokyo flagship, which will span 10,000 square feet, will open in September. It will be designed very much like Fred Segal in Los Angeles, with numerous shops-in-shop. “It will be even more eclectic than what you’re seeing in Melrose,” said Sandow. Merchandise will be 20 percent Fred Segal-branded product and 80 percent of brands found globally, he said. The flagship, which will feature a salon and a spa, will also serve as a platform for up-and-coming designers, both locally and internationally.

The Japanese flagship will be followed by several additional locations in other key Japanese cities, including both flagships and branded boutiques within major, high-end department stores. “Our whole strategy with this is we’re in no major rush,” said Sandow. “We’re very proud we’ve had four major deals done in six months. We don’t want to overexpand. We love that our partners in Japan are being as careful as they’re being,” said Sandow.

“We’re pleased to be working with Sandow to introduce Fred Segal in Japan,” said Kenji Eto, ceo of Mark Styler. “With its Hollywood history and focus on the latest fashion trends, we are confident that the brand will resonate well in this market and look forward to opening the first location in Tokyo next fall.”

When Sandow acquired Fred Segal last January, it bought the rights to Fred Segal’s intellectual property, new stores worldwide, the development of e-commerce and the creation of Fred Segal-branded apparel and products. Sandow subsidiary Culture + Commerce, a global design consultancy that develops opportunities between brands and designers, manages all licensing deals for Fred Segal globally. The company is also looking to open stores in unusual locations such as hotels and airports.

One deal has been forged with SBE, which owns and operates luxury hotels and restaurants worldwide. SBE is headed by Sam Nazarian, founder, chairman and ceo. Sandow will develop seven exclusive Fred Segal stores within the new SLS Las Vegas that opens in 2014. The hotel is being designed by Philippe Starck. These Fred Segal boutiques — the only stores to be located in the resort — will cover 10,000 square feet of retail space and will feature merchandise such as women’s and men’s apparel, swimsuits, jewelry, beauty, books, art, accessories and Fred Segal-branded items.

“It’s not just a store coming to Las Vegas. This is a Fred Segal experience that will be in every store in his hotel. When you walk though the front door into the casino, there will be two Fred Segal stores flanking the entrance. When you walk through the lobby, it will be all Fred Segal,” said Sandow. “Vegas was always a place we wanted to be. Obviously, there’s so much retail there, but it had to be unique,” said Sandow. The shops will open in 2014.

Sandow said they plan to build a denim bar, which will be installed in all Fred Segal stores, in Japan and Las Vegas. “It will carry the most interesting brands of denim, and eventually a Fred-Segal brand of denim.

Gensler, an architecture, design and planning firm, which has done projects such as the London Apple flagship, Neiman Marcus Beverly Hills and various Armani Exchange locations around the world, will be the architect-design partner for the SLS Las Vegas project.

Fred Segal stores will have their own buyers and merchandising staff who will work closely with Fred Segal’s merchandising manager, whom the company plans to hire in the next few months. The team will need to get approval from Sandow on merchandise and brands coming into the stores in an effort to maintain the quality level, said a spokeswoman.

Finally, the company is working on fredsegal.com, which will launch sometime next year. “We’re taking our time to carefully choose our partners. Our goal is not to slap a name on an e-commerce site,” said Sandow. They are considering a “trunk model,” where it will work with affluent shoppers and have private stylists in centers, where they’ll fill the trunks with all kinds of clothing and they will be sent to customers’ homes. They can try things on, and keep what they want and send back what they don’t want. “It’s designed to help the Fred Segal tenants. It gives them the power of the Internet and bring their very unique product mix to a larger audience outside of L.A.,” said Sandow.

Sandow said the company is looking to open a large Fred Segal in Miami, and would also like to open stores in New York and other U.S. cities, as well as Korea and China. “Our goal next is to build something outside of New York mostly likely in Miami, which will allow us to bring Fred Segal to the next level as an experience. I’m a big believer that retail has to be experiential. It has to be a place where people want to go to repeatedly and interact and stay, more of a lifestyle center.”