Tokyo and Osaka fashion: Versace intent on expanding after clean slate
Michel Lebon, Kanako Itamae and Lee Jay Walker
Modern Tokyo Times
Versace re-entered the Japanese market in 2011 after pulling out in 2009 and now this internationally famous company is focused on expansion after positive sales. It remains to be seen if the current situation for Versace is “a true renaissance” in Japan because clearly this company had a difficult time in the years prior to pulling out. However, given the power of this famous brand and with new mechanisms being set up, then clearly the possibility of “a new renaissance” in Tokyo, Osaka, and in other parts of Japan, is feasible given the exquisite nature of this fashion company.
In fairness to Versace, when they closed their stores in Tokyo, Osaka, and Chiba in 2009. They did make it clear that a return was possible in the near future. This applies to the company statement which stated that it was time to “close them and start with a clean slate.”
Therefore, rather than struggling on and trying to make things work, Versace was focused on “a clean slate.”Given this, it is evident that Versace wanted to refresh their thinking and concepts in order to meet the rigors of the Japanese market. This approach is very intriguing because often companies take negativity by either fluttering away many years or they finally decide to leave a powerful market from weakness. Yet it was clear by the statement in 2009 that Versace left from strength despite the adversity of the time.
In 2011 Versace was true to their word because they did start with “a clean slate” and re-entered the Japanese market. Once more Tokyo and Osaka were the linchpins because both cities are huge and their financial base is enormous. The same applies to both cities having an abundance of fashion districts. Also, the demand for quality brands is more than obvious in both Tokyo and Osaka – and the same applies to other powerful cities, for example Kobe, Nagoya, Sendai, Hiroshima, Yokohama, and other major cities throughout Japan.
However, the Japanese market is extremely competitive and certain unique cultural factors related to business and other areas, means that Versace follows a long list of international companies which found “difficult times” in Japan. Each company will have different reasons behind this and while some have pulled out indefinitely, others have returned once different methodologies have been implemented which suit the host market. Also, some companies that have returned have done so by numbing down their past ambitions but it appears that Versace is intent on expanding after consolidating itself rather quickly.
It is reported that Versace plans to open another three to four stores in Japan before the end of 2012. This is based on positive international sales throughout the world despite the negative global economy. If everything goes according to plan then it will certainly be a “new renaissance” for Versace in Japan and given the innovation of this exquisite company then hopes remain high.
Once Hiroshi Saito was announced to be the Chief Executive Officer of Versace Japan, then the re-entering of Versace into the Japanese market certainly appeared to be the “clean slate” like promised. The Chief Executive Officer of Versace SpA, Gian Giacomo Ferraris, commented in 2011 that “I am very excited to announce that Mr. Saito, whom I worked with very well in the past, is joining our team. He is one of the best managers in the Japanese luxury business and he understands Italian fashion brands better than anyone else.”
“I am confident that, with the arrival of Mr. Saito, our re-entry into the Japanese market will proceed fast and in the correct way. At the Group level, we continue to work with focus and enthusiasm towards our goals which, for 2011, foresee a significant growth in retail and wholesale sales, as well as a return to profitability.”
It would appear that the confidence espoused in the above comments by Gian Giacomo Ferraris is bearing fruit. This can be seen by the expansion plans of Versace after positive sales since re-entering the Japanese market.