TOKYO — As if running a small fashion house weren’t challenging enough, Japan’s emerging labels are facing additional hurdles in the wake of the country’s earthquake, tsunami and nuclear crisis.
This story first appeared in the April 13, 2011 issue of WWD. Subscribe Today.
To compensate for last month’s cancellation of Japan Fashion Week, many local brands are unveiling their fall collections with presentations and shows over the next few weeks. As is to be expected, foreign buyers are keeping their distance from Japan as grave problems persist at the nuclear plant in Fukushima, some 140 miles from Tokyo, which has just been upgraded by the government to the worst nuclear disaster since Chernobyl. Then there are the ongoing aftershocks, with the latest strong one rattling buildings and nerves in Tokyo on Monday. Labels suffered production problems as they had suppliers located in the northeastern region, where the quake struck.
“There are no buyers coming from overseas this time,” said Kunihiko Morinaga, designer of Japanese fashion brand Anrealage. “Usually, if you don’t see the actual products, then it’s hard to place an order, so I expect our sales for next season will decline somewhat.”
Morinaga said it took two weeks for him to get through to a factory in Kesennuma that makes his label’s denim items. All the plant’s workers were fine, but both the factory and the products were destroyed. He’s now trying to get his samples made elsewhere.
It’s a familiar story, according to Takao Tobari, management director of the Japan Fashion Week Organization.
“There are a lot of sewing factories, as well as some weaving and knitting factories, in Tohoku [the northeastern region where the quake and tsunami struck]. There were about 40 brands that were planning to participate in this season’s Japan Fashion Week. About a third of those use factories in this area that were damaged, so they experienced problems such as delays with the delivery of samples,” he said. “But in addition to damage, problems were also caused by power outages and aftershocks, which made some factories wonder if they could safely continue operation.”
Daisuke Obana, the designer of N. Hoolywood, said he hasn’t run into any production problems yet, but he also had his fall collection ready earlier than many of his peers because he opted to show during New York Fashion Week. There is still so much uncertainty about what the future will hold, he explained.
“I don’t know what to say in this situation because this problem won’t be solved in many years from now, and we have to continue checking the news all the time about the earthquake, saving electricity and radiation,” he said.
Lorenzo Hadar, owner and buyer of H. Lorenzo in West Hollywood, was due to arrive in Tokyo a few days after the quake but he had to cancel his trip.
“People are afraid to go there, so it created a problem with buying because the Japanese designers are [not always showing internationally] and so there is no real way to see the clothing. I think people may move towards French and Italian products until the crisis is resolved, just because it is easier,” he said, adding that he has had to place his orders based on photographs and he is worried about shipments from Japan being much later than usual.
“You aren’t always sure what you see in the photos and I must buy less. I must buy less in order to play it safe, because I cannot take all of these risks with clothing I have not seen myself,” he said.
Although several Japanese labels have expanded their businesses to international markets, many are still heavily dependent on their home country for sales. The weeks immediately following the quake were tough, as shops closed or reduced their operating hours to conserve electricity, but there are signs consumers are starting to bounce back.
Masahiko Miyake, chairman of Japan Fashion Week Organization’s board and the chairman of Sanei International, estimates that sales in clothing stores in Tokyo in the week immediately following the quake fell about 70 percent, but they are recovering.
“By the end of March, sales [of fashion goods] in Tokyo had returned to about 80 percent of their normal levels, but this past weekend [April 2 and 3], the levels were almost the same as they had been before [the earthquake],” he said.
Tokyo-based trend forecasting agency Five by Fifty surveyed 500 Japanese consumers to gauge their post-quake spending habits. It found that 52 percent of those in the Kanto region — metropolitan Tokyo and its surrounding areas — are spending less on fashion than they did before the disaster, while 46 percent have not altered their spending habits.
Only 28 percent of those in Kansai, the region comprising Osaka, Kyoto and Kobe, are spending less on fashion, reflecting the profound regional divide between eastern and western Japan. Of those in Kansai, 69 percent have not changed their spending patterns, according to the study.
Japanese brands and retailers will also have to contend with a drop in foreign tourism to Japan. Tourists — especially those from China and other parts of Asia — used to crowd Ginza. Today, they appear scarce on the ground. A spokesman for the Japan National Tourism Organization said its most recent data on tourist flows are from February, before the earthquake and tsunami struck. It is still compiling statistics from March, a spokesman said.
Meanwhile, it’s still unclear whether radiation fears could impact Japanese brands, both emerging and storied names. On the one hand, a couple of market trackers in China said consumers there are concerned and suspicious of Japanese products. Conversely, a JFW spokeswoman said foreign buyers are still placing orders for Japanese brands. Houses such as Comme des Garçons and N. Hoolywood said they haven’t received any cancellations on their orders. On the beauty front, Shiseido and Kanebo said they don’t have signs of consumers shunning their products on radiation fears.
Shaun Rein, managing director of the Shanghai-based China Market Research Group, said his firm is interviewing Chinese consumers and they say there is a “huge fear” about anything shipped from Japan.
“In my mind, smart brands would be testing for radiation for all products from Japan because consumers are demanding it,” he said. “Consumers are saying first they don’t trust Japan, they think Japan may be underestimating the level of damage, and they don’t trust that Japanese brands won’t be sending bad-quality products to China.”
Similarly, Five by Fifty said there have been reports of Korean consumers voicing concern over Japanese ingredients in beauty products like whitening regimes. The agency said consumers in China appear less concerned with fashion items but more worried about food and beverage products from Japan.
Some fashion houses are taking note and making a point to assure their customers their products are safe. It’s worth noting that much of Japan’s textile industry is concentrated in the western part of the country, hundreds of miles from the Fukushima power plant.
One German retailer sent WWD a copy of a letter on Yohji Yamamoto letterhead dated March 23. The letter thanked customers for their support after the earthquake and tsunami before moving on to the radiation issue. Yohji Yamamoto declined to comment for this story.
“There is no need to worry about radioactivity on clothes because our factories are not located near the nuclear power plant and the products are not exposed to air in the manufacturing-delivery process,” the letter stated.
Steve Suk, the chief executive officer and president of Horiyoshi the Third, a niche fashion label based on Japanese tattoo motifs, said he has had a few boutiques cancel orders because they fear customs agencies in their respective countries will not easily allow clearance for Japanese goods in the next few months.
“All of our goods are manufactured south of Tokyo, and we will be screening all our goods for excess radiation levels using a handheld device. We have relayed that information to our customers,” he said.
A spokeswoman from Hong Kong-based retailer I.T, which recently bought A Bathing Ape and operates multibrand stores in both Hong Kong and Mainland China, said its customers aren’t expressing concern about radiation. Earlier this month, it opened a 25,000-square-foot store carrying a wide array of Japanese brands including Comme des Garçons, G.V.G.V., Hysteric Glamour, Ne-net and Phenomenon.
Hadar of H. Lorenzo also shrugged off the radiation issue.
“The customer is still looking for these brands that they have loved for years now,” he said. “That isn’t going to change.”
Barneys New York also isn’t seeing any impact on people buying Japanese fashion. “Overall our sales trend is good and do not foresee a change, as we will be very supportive of these businesses and designers,” said Daniella Vitale, Barneys New York’s chief merchant and executive vice president overseeing all of women’s and barneys.com.
Barneys did create a corporate matching relief policy for any donations by employees to help Japan, and the retailer’s marketing efforts have reflected the cause, such as shifting the beneficiary of an upcoming event with jewelry designer Irene Neuwirth to support the Council of Fashion Designers of America’s Fashion & Friends for Japan and donating to various auctions, including one for a shopping trip with Simon Doonan.