Japan-US Business Report LogoJapan-U.S. Business Report

No. 343, April 1998

Issue Index

American Companies in Japan


MERCHANDISING

The Nicole Miller line of designer clothing is available at a freestanding Nicole Miller boutique in Osaka under a 10-year arrangement between the brand's manufacturer, New York City-based KOBRA INTERNATIONAL LTD., and SANKYO SEIKO CO., LTD. Another boutique will be opened shortly in Tokyo. The two shops are intended to give the partners a firsthand feel for the design direction in Japan and the demand for Nicole Miller-designed clothing. They will decide at some unspecified time whether to open more boutiques or in-store shops selling imported merchandise and/or to have Sankyo Seiko, which represents a number of other high-end clothing brands, start manufacturing Nicole Miller products under license for local sale. Sales the first year are projected at nearly $1.2 million.

Two more large Eddie Bauer casual lifestyle clothing, accessories and home furnishings stores are open in the Tokyo metropolitan area. One has a floor space of 10,600 square feet, and the other covers 9,900 square feet. They join the first Eddie Bauer store in Japan, opened in September 1994 by a joint venture between SPIEGEL INC., the parent of Redmond, Washington-based EDDIE BAUER INC., and OTTO-SUMISHO INC., plus a number of smaller shops. Eddie Bauer merchandise also is available through Japanese-language mail-order catalogs.

The partnership that operates L.L. BEAN INC. stores in Japan has mapped out a two-part plan to expand the market reach of the Freeport, Maine mail-order giant's products. SEIYU LTD. (70 percent) and MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. (30 percent) expect to open between five and 10 L.L. Kids stores a year in metropolitan areas after testing this retail format. These children's clothing shops will have a selling area of about 1,800 square feet. The joint venture also will open stores in nonmetropolitan areas that have roughly half the floor space (5,300 square feet) and do have half the volume ($3.1 million annually) of the typical L.L. Bean outlet in big cities. If a test store proves successful, four or five midsized shops will be built each year. Eleven L.L. Bean stores now are in operation. They did an estimated $69.8 million worth of business in FY 1997.

The flagship store of outdoor clothing retailer PATAGONIA, INC. is open for business in Tokyo's Shibuya area. The 3,900-square-foot shop carries about 350 items. It is the fourth outlet managed directly by the Ventura, California company's subsidiary in Kamakura, Kanagawa prefecture.

GAP INC. now has 19 Gap or combination Gap/GapKids stores in 12 locations in Japan. During April its subsidiary opened a 6,500-square-foot Gap in a Nagoya department store, a freestanding Gap/GapKids store in the Ikebukuro section of Tokyo with a selling area of 6,000 square feet, and another Gap with a GapKids area in a shopping center in Yokohama.

Adding fast-food restaurants has been a typical way for gasoline stations to try to attract customers in the current era of stiff competition. MOBIL SEKIYU K.K. is trying a different tactic. In a tie-up with the subsidiary of Cincinnati, Ohio-based MARTIN FRANCHISES INC., it has opened a service station in Yokohama that has an on-the-premises dry cleaners offering one-hour service. Over the next five years, Mobil Sekiyu expects to open a total of 20 such combination stations. The operators will pay royalties to the Martin subsidiary, which has 56 franchised Martinizing dry cleaners in the country.

An exchange rate of ¥129=$1.00 was used in this report.
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