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TOKYO — To look at it on paper, nothing about the young designers who participate in Japan Fashion Week adds up. They have little, if any, name recognition outside of their home country; their tiny businesses sell mostly within the domestic market, which has a sluggish economy many fear is heading into recession, and they produce their collections almost entirely in Japan using some of the world’s most expensive labor and fabrics.

This story first appeared in the August 29, 2008 issue of WWD. Subscribe Today.

To put it bluntly, it’s a wonder many of the labels showing at Japan Fashion Week, which kicks off Monday and runs through Sept. 5, stay in business. But the fact is, these companies are managing to survive, stitching their samples in some of the most cramped workspaces imaginable and snagging just enough retail accounts to carry on to the next season.

Not surprisingly, several of the designers are critical of the Tokyo fashion system in one way or another, citing the often inconsistent and unpredictable show calendar, conservative retailers hesitant to take on the risk of buying new designer collections and the lack of frank fashion criticism from local journalists. But they all agree this city has served them well as a foundation on which to build their brands.

“I want to make sure my domestic business is stable and steady before I go out into the world,” said Kazuaki Takashima, who designs Né-net, a three-year-old brand that is owned by Issey Miyake subsidiary A-net.

That’s a typical refrain among designers here. Though many of them make a living, that’s not to say launching a brand in fashion-mad Japan is easier than anywhere else. Japanese department stores tend to do consignment business and are noted for their conservative approach. Many designers have better luck snagging distribution deals through smaller specialty retailers.

“In Tokyo there are so many products for sale. And in that market, the big companies can produce a wide variety of products at certain price levels,” said Somarta designer Tamae Hirokawa, sitting in her small Tokyo studio surrounded by her intricate knitwear and lace bodysuits. “But for young designers like me and the small companies, we have to focus on one thing, which is very difficult.”

It’s also challenging to stay relevant in a city known as an international birthplace for trends. “In Tokyo, there are so many different kinds of design, like street fashion and [young fast-fashion labels],” said Hiroyuki Horihata. He and his wife, Makiko Sekiguchi, design the label Matohu, which has mined themes like deconstructed kimonos and Japanese pottery for design inspiration in past seasons. “To compete with all these original ideas, you always have to be ahead of them, so that hasn’t been easy.”

Although the macroeconomic prognosis for Japan is tepid at best, you would hardly guess that walking the streets of the nation’s capital where shopping bags and packed stores abound at every turn. “For starting out, selling just in Japan is really enough for young designers and little by little you go to Asian markets and then you start with Europe or America maybe,” said Mikio Sakabe, who runs his namesake label with his Taiwan-born wife Shueh Jen-Fang out of two small rooms in the ground floor of their house on the far west side of Tokyo.

Government-subsidized JFW supports Sakabe, Matohu and many other designers by offering them free venues for runway shows. But even Nobuyuki Ota, chief of JFW’s collection project committee and president of Issey Miyake Inc., acknowledges Tokyo Fashion Week has a long way to go in terms of attracting foreign press and buyers — not to mention cash-rich sponsors.

Ota, who disclosed that JFW spends more than $2 million on the shows each season, said Tokyo needs to shake up its image and take some cues from the livelier São Paulo Fashion Week in Brazil, which he just visited. “We have to change,” he admitted.

Sakabe said he manages to almost break even with his two-year-old label, thanks in part to the JFW-supplied venue and support from the Camera Nazionale della Moda Italiana. He also shows in Milan. “We’re not paying for everything, so that’s why we can still do the collection. Still, we’re not earning money,” he said, sitting in a two-room work space packed with racks of clothes and patterns.

Hirokawa’s Somarta label also got a free show venue — until last season. This time around, she will have to foot the bill. JFW feels it has supported her label sufficiently and wants to give other designers a chance, Ota said. To be sure, Hirokawa has done much in her first two years, earning more press attention than some of her peers. Restir, one of Tokyo’s hottest multibrand stores, picked up the collection her first season. “Always I tell them, remember the beginning of Issey Miyake, remember the beginning of Rei Kawakubo. [There was] no sponsor at all. It was hard to buy the fabrics so they called friends to get money,” Ota said. “I don’t want to have spoiled kids. Some designers should be hungry.”

Overall, designers are grateful to have JFW as a platform but they’re also quick to point out the timing and structure of fashion week need to be stabilized so more brands can participate. Currently, many small labels here opt out of the official week and schedule their shows at whim. This spring-summer edition of JFW also overlaps with the start of the New York shows, which is likely to dampen attendance in the latter part of the week and makes it difficult for U.S. buyers to attend.

Ota said JFW will likely revert back to doing its spring shows in October next year. That could be a logical move since there is not much business taking place during JFW — most of that occurs in showrooms after the shows in New York, London, Milan and Paris, according to some designers.

“No one buys JFW first; they wait until after Paris and if they have the budget, they will buy in Japan,” Sakabe said. While most people agree JFW needs fine-tuning, the opinions are more disparate when it comes to the quality of the designer lineup in Tokyo.

Akira Naka, who studied in Antwerp, Belgium, with Sakabe and will stage his first runway show in Tokyo this season, takes a somewhat self-deprecating view of the event. To him, many of the collections here smack of sameness. “Tokyo fashion has a strong impact in foreign countries in terms of street fashion, but in terms of [runway collections] it is still weak. We need strong designers,” he said. “We need lots more people who can express something special.”

Still, others are more upbeat about what is coming off the runways here. Yukiko Sudo, who oversees the women’s contemporary department at Isetan, including the Re-Style area for new designers, said JFW is a good chance to research and find new designers. The store, credited with being one of the most supportive of young designers here, buys labels like Ato, Zechia, Akira Naka, Mikio Sakabe and Writtenafterwards.

“Japanese brands tend to be independent and have strong taste. With the view to the world fashion market, they are very interesting,” she said.

Miyako Sekimoto, fashion director at Matsuya, has been attending JFW for 10 years. Her store carries only one of the brands on this season’s calendar — Mintdesigns, a quirky label known for its playful prints. But she noted the quality of the collections coming out of Tokyo is improving, especially as designers, who studied and worked in Europe and New York, return to their home country to start their own labels.

“Little by little, we’re seeing more Japanese designers that have a lot of personality,” she said. “We can tell that it’s their collection without looking at the label.”

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