TOKYO — This city’s runway shows kick off this weekend against a backdrop of significant political and macroeconomic change for Japan.

This story first appeared in the March 15, 2013 issue of WWD. Subscribe Today.

Most notably, the yen has depreciated considerably since the last round of shows in October, a development that gives Japanese apparel and textiles a competitive edge in the international marketplace. The yen has shed about 17 percent of its value since mid-November. That reflects a shift in monetary policy as newly elected prime minister Shinzo Abe and his center-right party, the Liberal Democratic Party, seek to boost the economy by stoking exports and ending years of deflation in the world’s third-largest economy.

Hiroshi Onishi, president and chief executive officer of Isetan Mitsukoshi Holdings Ltd., said of the overall climate, “The economic policy hasn’t actually been proven yet, so customers’ and companies’ incomes have not increased. But looking only at the [consumer] mind-set, stock prices have increased, so I think there is an expectation that the economy will improve. But as to whether or not that will have an effect on consumption, I think it will still take some time,” Onishi said.

Japan’s economy actually performed better in the last quarter of the year than originally thought. The country’s fourth-quarter gross domestic product actually grew 0.2 percent, according to figures released earlier this month. The preliminary estimate showed a decline, which would have indicated that the country was still in recessionary mode.

Another piece of promising economic news came earlier this week. In February, Japan’s consumer confidence index for households of at least two people rose to its highest level since June 2007.

Still, it’s especially clear this season that the brands showing during Japan Fashion Week, which tend to be small companies catering to a mostly domestic Japanese clientele, are facing considerable obstacles in the current climate.

Phenomenon, one of Tokyo’s hottest men’s brands on the schedule, was forced to cancel its show a few weeks beforehand. The brand’s parent company, Alison Co. Ltd., filed for bankruptcy. A spokeswoman for the brand said that Phenomenon has since secured new financial backers and will still proceed with a spring collection but the brand had to forego the runway this season.

Somarta, one of Tokyo fashion week’s highest-profile women’s brands, decided to stage an off-calendar presentation this season rather then a runway show. The brand’s designer, Tamae Hirokawa, could not be reached for comment.

Japan Fashion Week chairman Masahiko Miyake said that these types of problems are somewhat normal for these brands, which often cater to a niche consumer base. As president of Japan Fashion Week, he is a vocal supporter of fashion week participants and quick to point out that several brands are doing well, even picking up international clients. But speaking from another point of view, as chairman of fashion manufacturer and importer TSI Holdings, he acknowledges that it is challenging to grow these smaller labels.

“Economically, it’s a difficult [time] for everyone. I think the designers’ strengths need to be supported by the strengths of someone who can do business, such as ourselves,” Miyake said. “But these days, it’s difficult to sell these brands — they don’t create [good] business. Even if you put them in Isetan, they don’t make money. So companies have stopped supporting these brands, which is why they are all having difficulties.”

Isetan’s Shinjuku store has made a concerted effort to carry more Japanese labels in recent seasons but Onishi explained that it takes time for these businesses to gain traction.

“Unfortunately, after Rei Kawakubo and Yohji Yamamoto…it has been difficult for Japanese designers to have an international reach,” he said. “There are designers that have become mainstream. For example, Sacai, which shows during Paris Fashion Week, originally started in our stores with just one rack. So I think it’s best to start like that, and to spend some time growing from there.”

For the second season, Mercedes-Benz Fashion Week Tokyo’s official venue will be in the Hikarie Building, a shopping and entertainment complex conveniently located across from the Shibuya train station. A few runway shows take place Sunday and the action wraps up March 23.

“I think [the decision] to move to Hikarie was a successful one,” Miyake said, adding that he believed more people attended the shows last season compared with previous editions of the shows at the former Tokyo Midtown venue.

Last season’s shows in October coincided with a surge in political tensions between China and Japan over a territorial dispute regarding a small chain of islands and there was a noticeable absence of Chinese attendees. Even though the situation between the two countries remains tense, this season could play out differently in that regard. A Japan Fashion Week spokeswoman said Thursday that several Chinese retailers have already confirmed they plan to come to Tokyo for the shows.

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