MORE FROM CHINA: China’s man-made fiber production in 2002 increased 20.1 percent from the previous year to 9.91 million metric tons (21.8 billion pounds), according to the Japan Chemical Fibers Association, a national organization of fiber producers. Polyester fiber output increased 22.8 percent to 7.72 million metric tons (17 billion pounds), which broke down into 2.95 million metric tons (6.5 billion pounds) for staple, up 23.2 percent, and 4.77 million metric tons (10.5 billion pounds) for filament, up 22.6 percent. Production of nylon rose 12.9 percent to 475,000 tons (1.05 billion pounds), while acrylics moved up 11.3 percent to 594,000 tons (1.3 billion pounds), the association reported.
Meanwhile, apparel imports by Japan declined 5 percent in quantity in 2002 to 2.98 billion pieces worth $15.7 billion, down 6 percent in value terms, according to figures released by the Ministry of Finance in Tokyo. China continued as the nation’s dominant supplier, accounting for an 89.4 percent share of total imports. Chinese shipments came to 2.67 billion pieces, down 3 percent, valued at $12.7 billion, down 5 percent. Italy came second with 11.86 million pieces, down 8 percent, worth $786 million, up 5 percent. After Vietnam and South Korea, the U.S. ranked fifth with 18.55 million pieces, down 32 percent, with the value of $218 million, down 26 percent.
— Tsukasa Furukawa
STILL EXPANDING: China’s gross domestic product, which grew an estimated 7.9 percent in 2002, is expected to remain one of the world’s fastest-growing economies this year, although at a slightly slower rate. According to a study by the Institute of Developing Economies of Japan External Trade Organization, China’s GDP will grow 7.6 percent in 2003. China’s economic growth last year was led by favorable export and investment performance, the institute said, noting that the nation’s inflation rate was estimated to have decreased 0.4 percent.
Elsewhere in Asia, the study forecasts GDP growth in South Korea in 2003 at 5.5 percent, 0.5 percentage points below 2002’s level; in Taiwan, 3.3 percent (versus 3.2 percent last year); Hong Kong, 1.7 percent (versus 1.2 percent); Singapore 3.2 percent (versus 2.3 percent); Indonesia, 3.2 percent (versus 3 percent); Thailand, 5 percent (versus 4.6 percent); Malaysia, 5.8 percent (versus 3.9 percent); the Philippines, 4.2 percent (unchanged at 4.2 percent), and Vietnam, 7 percent (versus 6.9 percent).
SEIBU’S PLAN: The reconstruction of the financially troubled Seibu Department Stores took a major step forward last week as creditors approved a reorganization plan formulated by the Japanese retailer and its main bank, Mizuho. The plan includes debt forgiveness of $1.92 billion, the sale of four subsidiaries and liquidation of 10 others, four additional store closures and, by fiscal 2007, a paring down of the workforce to 5,700 from about 9,400. Dollar figures are converted from the yen at current exchange rates.
Mizuho Corporate Bank Ltd. and Mizuho Asset Trust & Banking Co. said in a statement they will release Seibu from its debt in the amount of $1.2 billion, while eight other banks will forgive the remainder of debt based on a procedure outlined by the Japanese government. Creditors also approved the selection of Shigeaki Wada, currently president of Sogo Department Stores and formerly president of Seibu, to head Seibu as president and chairman.
The reorganization plan calls for the stabilization of Seibu’s financial structure, strengthening of the alliance between Sogo and Seibu, and pretax profits of $130.8 million on sales of $3.67 billion in fiscal 2007.
EAST MEETS WEST: The Joie girl is taking on the world and has added retailer to her résumé. Vernon, Calif.-based contemporary label Joie, which, according to sources, is on pace to hit $25 million in its second year of sales, will open its first boutique March 15 in Tokyo’s trendy Aoyama district on Minami-Aoyama street. Rivaling the pricey Ginza district, the shopping area is home to Comme des Garçons and will boast Prada and Tod’s by the summer. Joie plans to stock its white store accented with hanging polished chrome fixtures with its full collection of denim jeans, silk cargoes, suede skirts and leather jackets. Jewelry, belts and European shoes will round out the mix.
In spite of Asia’s economic blues, cofounder Sean Barron said the brand has a cult following in Japan where it’s sold at Barneys Japan and Isetan. “Opening retail is a very risky proposition in America, so before we do it, we want to get the bugs out and roll out what works into American stores, most likely in 2004,” he said. To help out in Japan, Barron partnered with franchiser Link International to co-manage the business.
Joie’s global expansion continues in Europe, where it already sells in London. Recently, Joie signed on new European distributors in Spain, Italy, France, Belgium and Germany.
— Nola Sarkasian-Miller
GROWING LANDMARK: Hong Kong Land, the biggest commercial landlord in Hong Kong’s Central district, has announced plans that will see the redevelopment of its most popular retail center. The Landmark, home to two high-rise office towers and a low-rise annex block, also boasts five levels of high-end retail space that includes such tenants as Gucci, Christian Dior, Valentino, Burberry, Tod’s and Marc Jacobs. The changes are expected to add more retail space, including a purpose-designed department store, and will include the addition of a boutique hotel operated by the Mandarin Oriental.
Analysts here are lauding the facelift plans as necessary in a tough and crowded property market. Hong Kong Land currently oversees nearly five million square feet of office and commercial space — much of it aging, with The Landmark itself built in 1980. The recent opening of such high-profile towers as the 88-story Two International Finance Tower is providing competition to The Landmark in a sagging economy.
Hong Kong Land chief executive Nicholas Sallnow-Smith said that The Landmark redevelopment is expected to cost around $210 million. Retail space completion is slated for between 2004 and 2005; the office tower should be ready by the end of 2006. The new luxury hotel, which is scheduled to bow in mid-2005, will have 118 rooms over about 14 floors and will be called The Landmark Mandarin Oriental. Both Mandarin Oriental Hotel Group and Hong Kong Land are part of the Jardine group’s holdings.
— Constance Haisma-Kwok
NEW FASHION: There is fashion outside of Tokyo’s Ginza and Aoyama after all. Shinsaibashi in Osaka is attracting attention as an upcoming fashion capital in the western part of the country after Comme des Garçons opened a unit there in January. Its newest store is close to Louis Vuitton, Gianni Versace, Salvatore Ferragamo and Cartier in the district and Giorgio Armani, Dunhill, Max Mara, Hermès, Chanel, Tiffany and Marc Jacobs are within walking distance. A Benetton store also recently opened in the area. About 150 people queued up in front of the red-painted two-story Comme des Garçons store on opening day. “Merchandise which is popular among young customers, for example Junya Watanabe Man Pink, is one of the bestsellers we have seen since opening the store,” said Osamu Kawakubo, managing director of the brand.
Osaka, which has a population of about 2.5 million, “has four major shopping areas: Umeda, Abeno, Nanba and Shinsaibashi,” said Kimihiko Kitagawa, chief of the district development team at Daimaru Department Store in Shinsaibashi. “Shinsaibashi has just started to form the luxury brand shopping district.”
— Koji Hirano
Editor’s Note: Asia Watch is a new regular feature looking at developments in the Far East.