Apparel and Footwear Specialist Retailers in Japan

PROSPECTS

Ongoing decline in apparel and footwear specialist retailers

A shrinking population and stagnating economy are combining to lead to a fall in outlet numbers and declining sales in the remaining stores in apparel and footwear specialist retailers. The final two years of the review period saw the notable closures of the Forever 21 store in Harajuku and the H&M store in Ginza – the first Japanese stores of both brands.

New services threaten new apparel sales

While still an emergent phenomenon, fashion is showing signs of a shift from product to service in some parts of the industry. Rental services are expanding in the market, while the sharing economy is also emerging in the area.

Challenge from e-commerce

Apparel and footwear was one of only four areas of internet retailing to generate sales of more thanJPY1,000 billion in 2018, and the ongoing expansion of e-commerce poses a significant challenge to the development of store-based sales. While apparel and footwear internet retailing is expected to be amongst the most sluggish areas of e-commerce over 2018-2023, it is still set to perform significantly more strongly than store-based apparel and footwear specialist retailers.

COMPETITIVE LANDSCAPE

Uniqlo extends lead

Fast Retailing’s Uniqlo brand retained the lead in apparel and footwear specialist retailing in 2018, with its strength founded on a combination affordability and high-quality design. In 2018, Uniqlo announced a new collaboration with fashion designer, Alexander Wang, as well as extending the partnership it established with another designer, Christophe Lemaire, for a further five years.

Zozo starts private label

The expansion and ongoing innovation of Zozo Inc highlights the rapidly evolving challenges that e-commerce is posing apparel and footwear specialist retailers. In 2018, online operator, Start Today Inc, changed its name to Zozo Inc, having launched the private label, Zozo, in the previous year.

Non-store apparel and footwear brands expand into real outlets

While most store-based brands are engaged in internet retailing, with Uniqlo notably increasing its domestic online revenue in the financial year ending August 2018, non-store retailers are also looking to develop multi-channel strategies involving bricks and mortar outlets. Players moving in this direction include STYLE DELI, previously a pure play internet brand, and DoCLASSE, whose main channel used to be catalogue shopping.

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