California Style Strikes Gold in Japan

In Tokyo’s trendy Harajuku district, young men and women tote bags with the Body Glove logo and dance in L.A. Gear tennis shoes. At Sports Takahashi in Osaka, shoppers recently snapped up a test shipment of golf gear and accessories with a “Beverly Hills C.C.” logo. One of the best-selling wines in Japan is San Francisco Vintners, a label that doesn’t exist in the United States.

Japanese consumers may be known worldwide for their penchant for Louis Vuitton bags and Chanel cosmetics, but California life-style products are capturing the fancy of many shoppers, particularly the free-spending young. Be it beachwear, surf wear, skateboards, golf equipment, UCLA sweat shirts or wine, California is hot.

The attraction to the clothes, food, and leisure and recreation products reflect a special Japanese fondness for California. “The Japanese are, the best way to describe it is, like the song California Dreamin’,” explained James B. Vaughn, who has lived in Japan for three years as director of the California Asian Trade & Investment office in Tokyo.

“Their life in many ways is so regimented, so crowded, so congested, so lacking in all the things that California has--the sunshine, beaches, the casual attitude, the speeding down Pacific Coast Highway with the convertible top down. As an escape from their normal life, they begin to dream and think about what life could be like if they were somewhere else. The question is, where would they be? They imagine California.”

“We market the California state of mind,” explained Mark Walden, president of American Marketing & Licensing, the Gardena firm that markets Body Glove wet suits, surf and beachwear and accessories in Japan. “We’re selling the California life style, but the California life style is a state of mind--a freedom-loving people. At Narita Airport, you now see tanned, young Japanese in bright clothing, with their sunglasses perched on their heads and wearing diving watches. Japan is even getting into it at the sushi bars with California rolls,” an avocado and crab sushi creation of Southern California.

American movies and advertising help enhance the California image. Japanese golf and travel magazines bombard readers with exhortations to golf in California, the beach life and shopping on Rodeo Drive in Beverly Hills. Tokyo versions of popular California eateries such as Spago, Hard Rock Cafe and Trader Vic’s draw crowds, too.

More Leisure

Even UCLA is cashing in on the California craze. Japanese consumers annually purchase about $12 million to $16 million of the Pac 10 school’s T-shirts and sweat shirts in Japan. The demand, says Jack Revoyr, UCLA’s international marketing manager, is “part of the appeal and charm of Los Angeles. It’s a wonderful mystery.”

Helping all this along is Japan’s big push to get consumers to indulge in more leisure activities as the six-day work week is gradually cut to five and vacations are encouraged in both the public and private sectors. Japanese retailers are selling the California style as a trendy way to relax.

Japanese buyers are roaming U.S. sports and leisure shows, like the recent Action Sports Retailer Expo in Long Beach. This weekend, representatives from 16 California companies, including Los Angeles designer and manufacturer Ron Findley of Drop Dead Collection, took off for Japan to meet one-on-one with Japanese distributors and vendors under a California life-style trade mission organized by the United States and Japan.

“We have market research that shows 15,000 wind-surfing boards were sold in Japan in 1988,” explained Howard E. Crawford, who is going to Japan with the mission to try to sell his windsurfing boards that retail for $1,000 and up in the United States. “If we can get a small percentage, that would be excellent.”

Data on the volume of California life-style goods sold in Japan is hard to come by. However, a recent Japanese government report on the leisure market estimated 1989 retail sales of sporting and leisure goods at $10.8 billion, up 5.9% from 1988.

A survey by the Sports Industry Institute of Japan showed that imports of sporting and leisure goods rose 47.3% in 1987 from the previous year. Imported brands like L.A. Gear and Reeboks, for example, accounted for about 90% of the 3.3 million pairs of athletic shoes sold in Japan in 1988. Only 750,000 pairs were sold there in 1986.

Free Spending

California exports of apparel and textiles to Japan rose to $70.3 million in 1988 from $28.7 million the year before, according to Jock O’Connell of the trade consulting group, O’Connell Associates in Sacramento. “The dramatic increase in 1988 from 1987 suggests a sizable increase in California life-style apparel. They are not turning to California for underwear or yarn. In all likelihood it’s the upscale, chic garments normally associated with California,” said O’Connell.

Meanwhile, Japanese households are flush with cash, having an average monthly disposable income of about $2,600, according to a Jetro survey. The young are known to be free spending. High school students, for example, will pay as much as $100 or more for a pair of stylish name-brand fitness shoes.

Even with the big demand for California life-style goods, selling in the Japanese market involves the intricate marrying of product with the right distribution, while satisfying finicky Japanese shoppers and their fast-changing demands.

“My first impression was that people in Japan would buy anything with California on it,” said C. Eric Kuskey, president of Cal X-Sport Inc., which markets Sideout Sport and Edgeware, two Southern California brands of surf and beachwear in Japan. “The Japanese are actually very savvy consumers. They know quality product, quality manufacturing.”

Early pioneers taking the California life style into Japanese stores such as the Marui chain were California surfboard and beachwear makers like Body Glove and Ocean Pacific, whose product functionality was the most important. Their appeal initially was to the Japanese surfers who used the boards, wet suits and clothes for the sport.

Like life-style fashions around the world, the big boom came when the spectators wanted to dress like the surfers. “In Japan, most people are spectators, they are more conservative by nature. But the fashion-forward person wants to identify with the authentic stuff,” explained Walden, whose company is a division of American Marketing Works Inc., the worldwide licensor of the Body Glove brand.

Distribution Networks

He says the idea is to “seed” or get the product into the right shops in Japan: “It’s like seeding clouds to get rain.”

Much of that exposure comes from carefully nurturing and working with the Japanese distribution network. “In order to make it in any country, do as the Romans do,” explained Walden. “We hear Americans whining about barriers. There are no barriers, but it’s a different system. We have studied (Japan) very carefully because it is very a important market.”

Body Glove has organized BG Japan for its Japanese licensees and distributors. “As a group, we meet in committees and decide our ‘D/S/S program’--that means direction, support, service program,” for products sold in Japan, said Walden, who will say only that Japan is an “extremely profitable market” for Body Glove. “Japan is a world leader and a fashion leader in itself. It is crucial to our marketing around the world.”

California and other American products sold in Japan are typically 50% to 70% more expensive than they are in the United States because of Japan’s labyrinth distribution network.

“We will sell to a distributor who then sells to a wholesaler who then sells to a retailer who then sells to the consumer,” explained Killick Datta, L.A. Gear vice president in charge of international operations and licensing at the Los Angeles firm. In the United States, L.A. Gear sells direct to retailers. “Those two extra steps along the way make our product extremely expensive,” Datta said, noting that L.A. Gear has sold $10 million in merchandise wholesale to Japan during the past two years. “By the time it hit retailers, it was double that,” Datta said.

Others are not finding it as easy to crack the Japanese market. “We’ve been knocking on doors ever since 1985 when we went (to Japan),” explained Mark E. Charles, president of overseas operations at SIPA SIPA California, a San Clemente maker of lawn and beach games. He went through a number of distributors and believes that he has finally secured one that will get his products into Japanese stores. His firm and Cal X-Sport hope to cash in on beach volleyball, which is expected to be the next big fad in Japan.

“The Japanese consumer is spoon-fed what the Japanese distributor decides it wants,” observes Charles.

That characteristic in the Japanese system has benefited Gary Van Dam, president of PCI Sports. He has never been to Japan in the 15 years since he took over the Westwood company from his father. Yet Japan accounts for $2 million to $3 million, or 75%, of his annual sales of customized golf clubs, accessories and clothes.

Volatile Market

His products are featured in Japanese golf magazines, and Van Dam himself was listed in Who’s Who’s in golf in one issue of Choice Magazine, Japan’s biggest golf monthly with an 800,000 circulation. He says he is puzzled over his exposure in the Japanese media.

Van Dam and his sales staff of one, Mickey Nonaka, sell directly to Japanese retailers and some distributors who visit them at their small offices in Westwood. The two keep up on trends by subscribing to 10 monthly Japanese golf magazines.

“The market is constantly changing,” Van Dam explained. “You have to stay on top of what’s happening. It is amazing how fast things turn.” He developed a house line of golf apparel and accessories under a “Beverly Hills C.C.” logo that he made up.

A test shipment of Beverly Hills C.C. goods to Sports Takahashi, an Osaka retailer, recently sold out in three days with no advertising. “Beverly Hills is most prestigious and everybody knows it,” said Van Dam, noting that his Westwood business is “right on the border of it.”

He developed the logo because “we needed a name that tied in and would give a quality look. It is important to have a look, a whole package. It keeps out the copy cats.” He added that the Japanese like quality and are willing to pay for it. A Taylor Made brand club, customized by Van Dam, sells in the United States for about $350. In Japan, it commands $500 to $800.

Creating exclusivity for a product is important in Japan. Vintners International of Monterey County bottles wine under an exclusive private label, San Francisco Vintners (complete with a picture of the Golden Gate Bridge), which is sold only in Japan where it has been hugely successful.

Darrel F. Corti, a Sacramento wine retailer, has developed two private label brands--Protege and Poppy--of California wine sold to Yoshiya Co., a Tokyo supermarket chain. The Protege brand is sold in the store. The Poppy brand, which features the California state flower on its label, is sold through a special gift program set up by Yoshiya whereby Japanese tourists purchase the wine as gifts during their California visits but take delivery of it in Japan.

These purchases point to another fine point of Japanese consumerism. “They have a penchant for giving gifts,” said Corti.