Brands Move Workers Out of Tokyo

Fashion companies began to move westward to Osaka amid the threat of radioactive fallout, widening blackouts and diminishing food supplies.

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WWDStyle issue 03/18/2011

Fashion companies began to leave Tokyo Thursday, moving westward to Osaka amid the threat of radioactive fallout, widening blackouts and diminishing food supplies.

This story first appeared in the March 18, 2011 issue of WWD.  Subscribe Today.

Six days after a massive earthquake and tsunami hit Japan, damaging the Fukushima nuclear plant 124 miles northeast of the capital city, Chanel was handing out iodine tablets to workers and Hennes & Mauritz and PPR temporarily relocated offices. And some brands stopped giving updates on their operations in the country. Ordinarily accessible, Polo Ralph Lauren Corp., Burberry and Paul Smith, as well as several other firms, did not respond to requests for comment Thursday. Procter & Gamble Co. issued a statement saying all its employees were safe, but a spokeswoman declined to say whether they had been instructed to leave Tokyo.

Many firms in the capital have already given their employees the green light to work remotely, given rolling blackouts on the edges of the city and erratic train service. Japan’s Energy and Trade Ministry warned Thursday that there was a risk of a widespread blackout in the Tokyo area. That prompted many to leave work and stores to close their doors earlier than usual.

Although plenty of people decided to stay put and certain food items were reappearing in supermarkets, conditions still hadn’t returned to normal. The Japanese government has pleaded with Tokyo residents to not hoard food since it exacerbates a dire shortage in areas most affected by the earthquake and tsunami, which claimed more than 10,000 lives.

Despite the widening nuclear crisis, global stock markets regained much of their balance after three days of hefty declines. The Nikkei 225 dipped 1.4 percent in Tokyo, but the DAX gained 2.2 percent in Frankfurt and the FTSE 100 rose 1.8 percent in London. On Wall Street, the S&P Retail Index slipped 0.72 points to 494.11 as the Dow Jones Industrial Average gained 1.4 percent, or 161.29 points, to 11,744.59.

Even as stocks stabilized and the fears for the global luxury market waned upon closer analysis, there were reminders that it will be some time before life gets back to anything approximating normal in Japan.

“Chanel decided to close stores and offices in the affected areas [which include Tokyo],” the brand said. “Staff either stay home and follow instructions to remain indoors or temporarily leave the area. For those who prefer to leave the affected regions, Chanel is providing financial and logistical assistance. For staff who prefer to stay, the company has distributed iodine tablets and continues to deliver them for family members.”

H&M shuttered all its stores in the Kanto region surrounding Tokyo and offered to help relocate all its 800 employees and their family members to the Kansai region surrounding Osaka. As of Thursday night, only about 60 people, including family members, had chosen to move, said a spokeswoman. Most opted to stay closer to their home base in Tokyo.

John Ermatinger, president of Gap Inc.’s Asia-Pacific business, was in the firm’s Tokyo office and “monitoring the situation closely,” according to a spokeswoman. Seventeen of Gap’s 130 stores in the country were closed Thursday due to damage, potential blackouts, unreliable public transportation or the decision of a shopping center to close its doors.

However, the company didn’t respond to requests for comment later in the day that a March 29 fashion show in Tokyo had been canceled.

A PPR spokeswoman said about 44 employees and their families were evacuated from the Sendai area at their option to a safe haven in Osaka, where the company arranged temporary headquarters. Employees were given the option to leave Tokyo. Most of the PPR-controlled stores and offices in Greater Tokyo/Kanto area were to remain closed until today. The company has 2,000 employees in Japan, working for brands from Puma to Stella McCartney.

Lisa Montague, chief executive officer of Loewe, which is owned by LVMH Moët Hennessy Louis Vuitton, said four of the brand’s 40 stores in Japan were badly affected by the earthquakes. Fifteen doors have been closed until further notice.

“It was a natural disaster, an act of God, something completely out of our control, and we just have to deal with it, and find new solutions,” Montague said. “Our most immediate efforts are focused on ensuring that our staff is safe.”


Loewe decided not to cancel the opening Wednesday of a shop-in-shop at Daimaru in Osaka, where LVMH has set up a crisis office to coordinate the efforts of its brands in the country.

Some of Shiseido’s office buildings sustained cracks and other damage from the earthquake. Operations at the company’s Kuki factory, which produces hair products, have been suspended for two weeks for repair, inspection and other works after a water leak was found.

“However, our supply of merchandise will continue as normal for some time since the stock at Kuki factory was intact (this includes delays in physical distribution because of issues with transportation infrastructure),” the company stated, adding no damage has been found in any other of its factories.

More and more foreigners appeared to be fleeing the city and opting to either return to their home countries or relocate to other parts of Japan. On Thursday, the British Embassy told its citizens that they should consider leaving Tokyo — not because of potential radiation risk from the nuclear plant but because of the power and food shortage in the city. The American Embassy has given U.S. government employees the opportunity to leave the country.

On Wednesday, Washington warned Americans within 50 miles of the Fukushima nuclear plant to evacuate or take shelter indoors. That’s a much more dire reading of the situation than that offered by the Japanese government, which has set the evacuation/shelter area at about 19 miles around the plant.

Fashion editor and stylist Misha Janette said she and a friend decided Tuesday to leave Tokyo and go to a friend’s house in the mountains outside Kyoto. She stood the entire journey on a packed train. She’d had enough of the aftershocks and empty supermarket shelves.

“You can’t sleep, you can’t get any work done. You’re stuck to the news all day,” she said of life in the capital.

“Mentally it’s just not comfortable anymore,” the H&M spokeswoman agreed.

Tokyo Electric Power Co. had already initiated rolling blackouts in the outlying parts of the city as of Monday to help relieve a power shortage. That strategy appeared to be working but a cold front prompted many people to turn on their heating units and consumption rose again.

While many have left the city, not everyone is moving out. Much of the Western media’s coverage of the disaster has described it in apocalyptic terms, but that sense of panic hasn’t gripped many Japanese people in the same way.

“I personally feel things are calming down in that the stores are well-stocked and many of the TV stations are resuming their normal programs,” said a Japanese magazine editor in Tokyo, who requested anonymity. “Having lived as an ex-pat for most of my childhood [I know] you need to get out of the country if there’s any danger, no matter what the scale. So I totally understand all the foreigners leaving. But I’m hopeful.”

And many businesses pressed on.

Alberto Palatchi, ceo of Pronovias, inked a deal Tuesday with Japan-based wedding organizer Tutu Wedding Group to open nine Pronovias franchise stores in Japan by June 30. He called the agreement “a declaration of interest on their part and a vote of confidence on mine. Things will get better there.”

The industry has been giving in cash and kind, but the scope of the disaster remains daunting. Wal-Mart Stores Inc. plans to send 95 tons of water, acrylic blankets, tents, warm clothes, fleece, portable toilets, flashlights and batteries. PPR donated 2 millions euros, or $2.8 million at current exchange, to relief efforts, while L’Oréal’s chairman and ceo Jean-Paul Agon gave 100 million yen, or $1.2 million, with his executive committee. Shiseido also gave $100 million yen to aid victims of the earthquake.


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