H&M Still Winning Tokyo Hearts — and Wallets

  • Share
  • Read Later
Katsumi Kasahara / AP

Shoppers are packed on the main street in Tokyo's Ginza shopping district on the opening day of the city's first H&M, Sept. 15, 2008

A retail rock star on its way to Harajuku. In the Japanese capital's frenetic neighborhood, where young Tokyoites troll the shops of local and global brands for hip deals, fans are already worked into a frenzy. H&M's second store in Japan — nestled in a glass building with a façade worthy of a SoHo gallery and branded with the signature red "H&M" — uses monochromatic tones and floor-to-ceiling windows to make the Swedish giant's bright-colored clothing stand out. But there's still one thing missing: lines of eager Japanese consumers winding around the block.

Those will come tomorrow, when H&M security is put to the test by the thousands of customers expected to arrive before the store opens at 11AM. When the world's third-largest apparel retailer debuted its Japan flagship two months ago in Ginza, Tokyo's own Fifth Avenue, some 3000 shoppers lined up for first dibs on the brand's affordable fashion, amidst falling luxury sales on the same street. As Japan's recessionary economy and the appreciation of the yen left other businesses in Japan to watch purse strings tighten and household consumption drop, people continued to wait outside H&M day after day. "I'm totally fascinated by the queuing," says Jorgen Andersson, H&M's Brand and New Business Director. "I think it's the first impression. The challenge is to deliver once the honeymoon is over." Japan country manager Christine Edman says the new thriftiness hitting Tokyo has even helped their low-priced brand. "Sometimes the timing is good for us," says Edman. Perhaps even golden in an economic downturn.

Despite financial woes worldwide, H&M, with more than 1,600 stores in 30 countries, is pressing ahead with its expansion in the Asian market. Same-store sales for H&M worldwide were down 2% in September, but overall sales were up 10%. The brand opened its first Asia stores in Shanghai in April 2007 and in Hong Kong in March 2008. In Tokyo, a 2,800 sq-ft full concept store in Shibuya and a shop in Shinjuku are slated to open next fall, helping keep the company's pace of expanding stores by 10% to 15% annually worldwide.

From tomorrow, H&M will try to show Harajuku's young shoppers what it can offer — and what the global competitors that share the same block, like GAP, Topshop, and Zara, can't. H&M Japan says it will monitor the pricing of other brands, including Japan's own uber-casual UNIQLO, but isn't fazed by the competition. "If you've seen one GAP, you've seen them all," says Andersson. He says one of H&M's strengths is that it can tailor a store for the customer in a particular neighborhood or shopping district. "An advantage at H&M is that we have a high density of stores in certain cities. In Stockholm we have 30, and people have their favorite H&M store."

Still, catering to the Japanese consumer will be a challenge. What is shiny and new here one day is often dull the next. "Japanese consumers are very fashion conscious and detail-oriented. They have high expectations on service," says Edman, who was born and raised in Tokyo before going to Sweden. She and her team are banking on the fact that H&M's relationship with Japan is already a strong one. Tokyo has even been a source of inspiration for H&M's designers, as reflected in the company's most recent designer collaboration with Rei Kawakubo's high-fashion label, Comme des Garcons. "Japanese usually pick one piece here, one piece there and put it together. That makes it a challenge," says Andersson. "It puts high demand on what we deliver." So will tomorrow's lines outside the Harajuku store.