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UPscale Japanese children’s apparel manufacturer and retailer branches out

Interview - March 21, 2024

A manufacturer of baby and child apparel first established more than half a century ago in 1971, in the intervening years MIKI HOUSE has become a celebrated international brand with outposts all around the globe.

KOICHI KIMURA PRESIDENT OF MIKI HOUSE GROUP
KOICHI KIMURA | PRESIDENT OF MIKI HOUSE GROUP

Over the last 25 to 30 years, Japan has seen the rise of regional competitors who have replicated the Japanese model of success but are doing so at a cheaper labor cost, pushing Japan out of mass markets. However, many Japanese retail brands like Uniqlo and Muji have been successful overseas. What are the advantages of Japanese brands today, and what added value do they bring to customers?

All products manufactured in Japan are renowned for their exceptional quality.  The apparel and fashion industry, in particular, heavily relies on precision-made materials produced in Japanese factories that strictly adhere to high-quality standards. This commitment to excellence results in the consistent production of high-quality products. Similar to local manufacturing companies in Japan that consistently deliver products known for their reliability and impressive longevity, our brand, Miki House, has garnered a loyal customer base. Despite the relatively high price point of Japanese products, our business has thrived for the past half-century because of the trust our customers place in our brand.

 

Given Japan's demographic situation of being the oldest society with a rapidly shrinking population, maintaining the longevity, quality and made-in-Japan know-how is difficult. It's becoming difficult to find newer, younger recruits to pass on that knowledge and replace the older workers. It also creates a shrinking domestic market, which is extremely pertinent to a firm like yours that targets children and babies. What have been the challenges of this demographic shift, and how have you been reacting to it?

In the past decade, we strategically expanded our presence in foreign markets, and our efforts have proven successful. A decade ago, the proportion of our company's revenue from international markets was only 20%, but we have significantly increased that figure to 65%. This shift is in response to Japan's persistent demographic decline, prompting us to proactively target foreign markets while valuing the domestic one .

Throughout our history, we have leveraged our overseas stores to sell our products. For instance, in 1979, we expanded our product offerings internationally for the first time at the upscale department store Saks Fifth Avenue in New York, USA. Additionally, in 1987, we proudly opened our inaugural store near the Louvre Museum in Paris. Presently, our current store in Paris is located on Rue Saint-Honoré, right near the Ritz Hotel.  Our choice of France as a strategic location aligns with its reputation as the fashion capital, and we aim to be an integral part of this vibrant fashion scene.

 

How can you bring Japanese fashion trends into foreign markets and make them appealing?

For the past four decades, we have actively engaged in various overseas fashion shows and expos, particularly in France. During this time, we have been dedicated to collecting valuable insights from local communities. By closely listening to customer requests from each location, we gain insights that enable us to understand and address their specific needs.

This wealth of information has been instrumental in customizing our product lineup for different regions. Five years prior to our decision to open our first overseas store in France in 1987, we had already been involved in expos, engaging with locals and receiving orders from our French customers. This approach allowed us to release products with careful consideration, precisely tailored to meet the needs of our European clientele.

 

MIKI HOUSE has different brands under its umbrella, including the MIKI HOUSE brand, DOUBLE_B, and CHIECO SAKU - one of your new lineups in 2022. Which one is your current focus, and what strategies are you employing in order to ensure the successful growth of all three brands?

We operate under the umbrella of Miki House, with various brands that cater to different markets. DOUBLE_B focuses on the coolness of children's fashion, while CHIECO SAKU specializes in the cuteness of children's attire. Our core brand, MIKI HOUSE, offers a wide range of items for children, including baby, toddler, and formal wear. What we consistently emphasize across all these brands is our commitment to high-quality, high-value craftsmanship that only our company can deliver. For instance, our MIKI HOUSE GOLD LABEL is a newly introduced line that represents the pinnacle of luxury, using the finest materials available. Although it is designed for luxury, our baby line places particular importance on safety and security, ensuring that all products are made in Japan. The durability of our products sets us apart. Customers choose our products not only for their own children but also as thoughtful gifts for cousins or relatives. The longevity of our items allows them to be passed down through generations.

In line with the fashion industry's sustainability trend, our products are designed to be handed down to younger family members or acquaintances rather than being discarded. This practice has become a tradition within Miki House. Many customers pass down our products, including trainers, sweatshirts and pants, to the next generations. The fabrics maintain their quality, even after multiple washes, ensuring they stand the test of time.

 

Could you talk to us about your unique manufacturing process to manufacture such high-quality and sustainable products?

Our manufacturing process begins with a meticulous selection of raw materials, emphasizing our commitment to developing quality textile threads for our products. This highlights our unique approach to manufacturing. One notable example is our use of Sea Island cotton, the rarest form of cotton that constitutes a minuscule proportion of the world's cotton production. Clothing made with Sea Island Cotton boasts excellent qualities in terms of its texture, comfort, and overall feel. Our dedication to using such a premium material for baby clothes is unique - there are no other baby and children's clothing companies that incorporate this material into their products. This exemplifies the great care we take in addressing children's skin sensitivity.

In our production, we are mindful of minimizing waste. There are no byproducts that go to waste; instead, we utilize them to their fullest potential. For instance, any byproducts generated find a purpose in manufacturing towels. This conscientious approach shows our SDGs efforts to ensure nothing goes to waste in our production process.

 

A part of your mission is to make sure that you minimize the risk of children being infected by bacteria and viruses. You have developed the Pureveil line, which takes advantage of the unique antiviral ingredient known as Etak. Through this, your firm offers a range of different products, such as hadagis, accessories and gauze masks. Can you tell us more about the Pureveil line? How is Etak superior to other types of antibacterial agents?

The driving force behind the development of the antibacterial and antiviral ingredient known as Etak is Professor Hiroki Nikawa from Hiroshima University. Originally focused on researching antibacterial oral care ingredients, Professor Nikawa discovered that Etak not only possesses antibacterial properties for oral hygiene but is also safe for the body even if swallowed. Our introduction to Etak stemmed from this groundbreaking research. It became the cornerstone for infusing Etak, with its antiviral and antibacterial properties, into our threads and materials for children's garments and bedding.

Recognized in the industry for our commitment to solving challenges, we prioritize selecting the perfect materials for the delicate skin of babies. Collaborating with various thread manufacturing companies, we diligently work to identify the optimal textile and thread for our products. Leveraging the research and development capabilities of Hiroshima University, we collaborate with yarn and assembling companies to introduce final products incorporating Etak into the fabric fibers. These products are released to the market as the Pureveil line.

The final products, featuring Etak-infused fibers, include sought-after items such as gauze masks for children, which experienced high demand during the pandemic. The Pureveil line includes popular items such as gauze masks for children, which experienced high demand during the pandemic. Due to overwhelming customer response, production struggled to keep up with the demand.

 

Physical retail stores struggled during the COVID-19 pandemic. Many stores had to shut down, exacerbated by stay-at-home orders and social distancing. Conversely, e-commerce experienced a significant increase, especially in Japan.  In 2021, online sales jumped by 13%, which made the country the fourth-largest e-commerce market in the world. How has your business adapted to take advantage of e-commerce?

While online sales experienced a significant surge during the pandemic, we remain committed to preserving our brick-and-mortar sales channel, represented by our conventional stores. There is a noticeable trend of more individuals returning to the practice of physically visiting stores. This trend is driven by the desire to ensure optimal comfort and fit when purchasing clothes - a tactile experience that online shopping may not fully offer.

Being able to touch and feel the material, along with having a firsthand look at the clothing, becomes crucial in the selection process. Given that most of our products are priced higher than the average fast-fashion items, customers are more inclined to make their purchases in-store. This is especially true since some of our products are priced even higher than those from renowned brands like Dior and Louis Vuitton.



When we interviewed the president of TSI Holdings, he explained that they are trying to get more people back into their physical stores through unique technologies to enhance the customers' in-store experience. He talked about creating virtual avatars to interact with customers to create personalized experiences. What technologies are you implementing to create a unique in-store experience for your customers?

While some retail shops may opt to enhance the in-store experience through new technologies, our approach differs slightly. Approximately 50% of our in-store domestic sales are made as gifts. Our customers typically shop not for themselves but for their children, friends or relatives. Recognizing this unique purchasing behavior, our company places a primary emphasis on the quality of customer service, hospitality, and above all, meeting various customer needs. We strengthen the recruitment and training of our staff to ensure they can accurately understand what customers are looking for and make immediate and appropriate suggestions. Rather than relying on new technologies, we aim to keep the process conventional while ensuring it is easy, reliable and user-friendly. Our goal is to minimize the time customers spend in the store while maximizing their ability to explore different variations of our products. Observing the behavior of our overseas customers, we have noted a similar trend where foreign customers often purchase clothes for their children, with a significant number also choosing shoes as a popular gift item.

 

Are there any other new products or lines you are developing that you would like to showcase to our international readers?

Our company consistently prioritizes product development for precious children and babies. We not only specialize in baby clothing but also expand our business to include children-related products such as picture books, toys, educational items, and food service. As one of our future directions, we are currently working on a new business related to weaning food. This initiative stems from the increasing demand for weaning food observed in domestic obstetrics and postpartum care facilities as collaboration efforts progress. We are actively advancing the process of product development with the aim of commercialization. We are in the process of merchandising it. 

 

Are you also looking to partner with overseas firms or academic institutions to develop new products or market your products to new fields?

Currently, initiatives in overseas obstetrics and postpartum care facilities are underway. Our strategy involves first testing our products in Japan to assess their effectiveness in the domestic market. We have initiated a project in collaboration with a general hospital in Thailand to provide our products to newborns in the obstetrics and gynecology department, which features a space designed by MIKI HOUSE. 

We are also implementing similar initiatives with obstetrics and postpartum care facilities in Japan. Our target customers are those moms and babies currently in the facilities, and we aim to provide them with an opportunity to experience the quality of Miki House firsthand. By showcasing our products in a way that allows individuals to see, touch and have their babies wear them, we believe they will come to appreciate the exceptional quality we offer. Our ultimate goal is to have them experience the quality and become valued customers of Miki House.

 

Moving forward, which countries or regions do you believe are key to growth for your firm?

Our primary focus for business expansion is Asia, and we are excited to announce the upcoming opening of a new store in Cyprus shortly. Additionally, we aim to further grow our presence in the European market, where we have already established several store locations. The number of new stores opening worldwide is steadily increasing.

 

What makes Miki House the brand for babies?

My primary message is embedded in our products - our commitment to prioritizing quality for babies and children. We believe that by placing quality first in our products, users will naturally develop a strong attachment to our brand. This sentiment is often reflected in the experiences of customers who visit our Miki House stores in France. Interestingly, some of our customers, upon returning to their home countries, were so impressed with our brand that they took the initiative to open local shops themselves.

It works as a distributor, with the businesses being run by local companies rather than our employees. The CEOs of these local shops visit Japan twice a year to share information and report on their results.

 

What type of support do you offer someone looking to open a Miki House store?

We offer comprehensive support to our distributors during the pre-opening phase. While they manage paperwork and store operations, we take charge of designing and laying out the stores. Our collaboration involves extensive discussions to determine the best solutions for each location.

Adherence to strict rules is crucial, particularly in countries like China, where specific details are regulated. We provide essential elements such as tables and hangers and guide distributors in deciding the appropriate quantity of clothing for import when opening a new store. After the store opening, we invite owners and buyers to attend the biannual exhibitions held in Japan to personally view our new products. To ensure ongoing success, our sales and marketing teams monitor their performance and offer recommendations tailored to their needs. They also give advice aimed at enhancing their businesses, and we remain committed to providing full-time support to our distributors.

 

Imagine we come back three years from now and have this interview all over again: what would you like to tell us?

While maintaining a focus on the domestic market in Japan, we aim to enhance our overseas sales ratio by expanding our international store network. Our goal is to achieve a 70% to 80% contribution from international sales to our total revenue over the next three years. At the same time, we will continue our support for sports athletes to provide significant dreams and inspiration for children. A total of 130 athletes supported by our company have participated in the Olympics. Currently, at least four athletes have been confirmed to represent Japan in the upcoming Paris Olympics. Additionally, we take pride in supporting Juju (Juju Noda), a 17-year-old female aiming to become the first F1 racer in Japan, as she competes in the top-tier Super Formula. We look forward to the achievements of these young athletes.

 

Interview conducted by Karune Walker & Sasha Lauture

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