Investing in Japan
Investment News
Sep. 25, 2009
Forever21, Five Months after the Opening of its First Japan Store―Interview with Larry Meyer, Executive Vice President
US-based Forever21, a popular clothes retailer for young women, opened its first Japan store in Tokyo's Harajuku district, a well-known shopping area for young people. To enter the Japan market, where media has enormous influence on consumer interest, the company employed an entirely new (for them) promotional strategy that made full use of various media. They aggressively conducted PR activities through press releases and presentations to Japanese media, which resulted in enormous media coverage even before the store's opening. The firm also gave away free original T-shirts and beach sandals at the opening, and utilized their website to connect with Japanese customers. This was accomplished by posting an original serial novel by a young female Akutagawa Prize winner, Hitomi Kanehara, and streaming an original song by popular pop singer, BENI.
As a result, more than one million customers visited the store in the first two months after its opening, a record tally among all of the company's stores in 13 countries worldwide (as of July 2009). Five months on, the Harajuku store is still thronged with young shoppers.
In addition to items created by Forever21's in-house designers, the company also sells products from over 2,000 suppliers. This compares to other fast-fashion retailers that are primarily SPAs (specialty store retailers of private label apparel), which handle everything from production to sales themselves. Utilizing this supplier-based business model allows the firm to add new items daily at reasonable prices, giving them an advantage in Harajuku's highly competitive fast-fashion market.
JETRO spoke with Forever21's Executive Vice President in Japan, Larry Meyer, about the firm's entry into Japan. Below are some excerpts:
On Japanese consumers:
"We see Japanese consumers as very aware of fashion trends, so we believe they will respond positively to our offering of daily new items within the widest array of the latest fashion at everyday low prices."
On Forever21's unique features:
"We offer new items daily, carry a very broad assortment of merchandise and believe that the "first price should be the right price." Apparel retailers tend to carry a more narrow range, replenish existing items and start with high prices that may be lowered as time passes."
Strategy for Japanese market:
"Our merchandise concept of daily deliveries, wide assortment and everyday low prices is the strategy that we employ both globally and in Japan."
Plans for expansion:
"We are committed to opening more stores throughout Japan, but the timing is dependent on procuring the appropriate real estate for new outlets. As stores open, we will add more employees."
"We are thankful that our merchandise offering has been accepted by the Japanese, and we will try even harder to provide more new items each day and improve our service to customers visiting our store."
The new store in Harajuku is managed by the Forever21 Japan Trading Company, LLC., established in September 2008. The firm made use of JETRO's support and services in Japan and the US, including information and advice on import/sales regulations for apparel and introduction to accounting firms.
Invest Japan Business Support Centers (IBSCs) are located in Japan's major business hubs (Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka) and provide one-stop support and service to foreign firms seeking to set up or expand business in Japan. The centers, which provide free temporary office space, consultation with expert advisors and access to a wealth of business information, tailor support according to the specific needs and phase of development of each firm.
