Elite Ginza District Gets Low-Rent Neighbor : Japan: As recession takes toll on upscale boutiques, the success of a cut-rate men’s clothing store shows a new desire for quality at lower prices.
For Aoyama, a cut-rate men’s clothing chain, the move into Tokyo’s uppity Ginza shopping and entertainment district was mostly an experiment in marketing. Its new neighbors saw something akin to a social revolution.
“There is a ‘local consciousness’ that this is a high-class neighborhood into which we don’t fit,” said Mitsunori Fujii, chief of Aoyama’s new Ginza shop.
Shopkeepers in the neighborhood, and even police, have complained to Aoyama about “pedestrian jams” that developed on the sidewalk in front of the store on especially crowded weekend days, he said.
The move--somewhat akin to K mart opening an outlet on Beverly Hills’ Rodeo Drive--underscores a significant change in old habits and customs here.
In the late 1980s, when land and stock prices soared--the “bubble economy”--Japanese consumers flocked to upscale shops and department stores to scoop up brand names--insisting on quality whatever the price. Indeed, purveyors of luxury goods often discovered that cutting prices drove down the sales of brand-name products.
But the bubble has burst. Plummeting land prices--resulting in rents dropping by a third--has allowed Aoyama to move into the Ginza while the district’s elite department stores and boutiques are suffering.
Amid the stagnating economy, 14 Tokyo department store companies just reported their first-ever year-to-year sales decline--a 5.7% slump in 1992. For December alone, sales dropped 11.2%.
In contrast, Aoyama is drawing huge crowds and expects to record a 31% increase in sales--up to about $1.2 billion--when its business year ends March 31. That’s on top of a 34% sales gain in the year that ended last March 31.
“Japan may be far from becoming a nation of hagglers, but pressure for a change in merchandising--for reliable quality at lower prices--is clearly coming,” the Japan Times commented in an editorial.
Situated on a corner across the street from the rear of the Matsuya Department Store--a Ginza stalwart--Aoyama has been drawing an average of 1,000 customers on weekdays and twice as many on weekends. After only three months, the shop is already expanding.
During a midafternoon visit on a recent weekday, about a dozen customers were making purchases at Aoyama, while no shoppers at all were seen in Matsuya’s men’s suit department.
In December, during the traditional year-end gift-buying season, so many people jammed the store that it put up ropes outside to force eager customers to wait in lines, Fujii said. That’s when the neighboring shops and the police complained, he added.
Most weekday customers come from the ranks of “salarymen” who work in the Ginza, but weekend shoppers include families who come in from the suburbs, where nearly all of Aoyama’s outlets have been located until now, Fujii said.
“Old Ginza customers”--the ones accustomed to paying $800 and up for a ready-made suit--”still aren’t coming to Aoyama,” Fujii said. “But customers who used to pay 50,000 yen to 60,000 yen ($400 to $480) at the department stores are beginning to come.”
As an advertising gimmick, Aoyama offers a small sampling of suits at the eye-popping price of $20. “The more of those we sell, the more we lose,” Fujii said. But the majority of sales, he said, are suits priced between $225 and $300. The quality, he said, is the equivalent of suits that cost twice as much at the department stores.
Japanese consumers still shy away from inexpensive, but shoddy, merchandise, Fujii said. But a new breed of customers capable of spotting quality at reasonable prices has emerged as a result of the bursting of Japan’s economic bubble, he added. In addition, many of Aoyama’s customers in their 40s and 50s are buying ready-made suits for the first time in their lives, he said.
“Suits used to be considered a luxury--and men would buy very few of them but have them tailor-made. Even now, many older men think that ready-made suits won’t fit properly,” Fujii said.
Aoyama got its start in 1964, when its founder quit his job with Japan Tobacco Corp. and set out in Hiroshima to reduce the price of clothing by rationalizing traditional distribution practices. Unlike most retailers, Aoyama does all its buying directly from manufacturers, dispensing with middlemen. It pays cash, buys in volume and does not demand that manufacturers take back products that cannot be sold.
And by making it a practice to stock 1,600 suits at each outlet, it offers a selection for nearly everyone--including men with waistlines of up to 52 inches. Alterations are made on the spot, within 10 minutes, Fujii said. Suits make up 40% of sales.
Although it took Aoyama 23 years--until 1987--to establish its first 100 outlets, the chain expects to be operating 440 outlets by the end of this fiscal year.
