Wednesday, Apr 17, 2024
logo
Update At 14:00    USD/EUR 0,92  ↑+0.0002        USD/JPY 151,69  ↑+0.174        USD/KRW 1.347,35  ↑+6.1        EUR/JPY 164,16  ↑+0.143        Crude Oil 85,49  ↓-0.76        Asia Dow 3.838,83  ↑+1.8        TSE 1.833,50  ↑+4.5        Japan: Nikkei 225 40.846,59  ↑+448.56        S. Korea: KOSPI 2.756,23  ↓-0.86        China: Shanghai Composite 3.015,74  ↓-15.745        Hong Kong: Hang Seng 16.512,92  ↓-105.4        Singapore: Straits Times 3,27  ↑+0.018        DJIA 22,58  ↓-0.23        Nasdaq Composite 16.315,70  ↓-68.769        S&P 500 5.203,58  ↓-14.61        Russell 2000 2.070,16  ↓-4.0003        Stoxx Euro 50 5.064,18  ↑+19.99        Stoxx Europe 600 511,09  ↑+1.23        Germany: DAX 18.384,35  ↑+123.04        UK: FTSE 100 7.930,96  ↑+13.39        Spain: IBEX 35 10.991,50  ↑+39.3        France: CAC 40 8.184,75  ↑+33.15        

YAGI TSUSHO: Japan’s premiere high-end fashion merchandising and marketing company

Interview - December 25, 2023

Having operated since 1946 as a specialized trading company in fashion goods, YAGI TSUSHO has transformed itself into a high-end marketing company using its extensive experience in various international markets.

YUZO YAGI, PRESIDENT OF YAGI TSUSHO LIMITED
YUZO YAGI | PRESIDENT OF YAGI TSUSHO LIMITED

Can you please give us an overview of your company?

We were established as an export trading company in textile in 1946. We still operate as a specialized trading company in fashion goods but have transformed a major part into a new type of global marketing company. We acquired several fashion brand companies in Europe and USA and accordingly we have been doing marketing of these fashion goods in the global market. We primarily sell products in Japan and in Europe.

When it comes to the textile export business, we operate as typical trading companies, utilizing Japanese, Chinese and Italian textile mills to cater to market demands for each market. We supply products to high-end clients worldwide, including many prominent brands in Europe and America.

Furthermore, we financially participated in Ecopel, a renowned French company known for their faux-fur products. Due to growing concerns about animal cruelty, prestigious Italian and French brands have expressed great interest in their faux-fur creations.  Ecopel operates from several offices, Yagi New York aids in USA sales, while Yagi Japan assists in distribution in Japan. Our company performs a wide range of functions to facilitate these operations.

 

With the impact of COVID-19, the retail landscape has undergone significant changes. Physical stores have faced challenges as more people stayed home due to social distancing and stay-at-home orders, leading to the growth of e-commerce. As a company operating in the marketing and retail sectors, could you elaborate on the impact that COVID-19 has had on your business?

Retail store and online retail coexist. Between 2019 and 2022, our e-commerce sales increased from 8% to 15%. The expertise needed for success in physical retail businesses is equally crucial for thriving in e-commerce. However, online retailing serves a different purpose, necessitating continuous refinement of our skills as we learn to adapt our retail expertise to the digital realm.

I view the fashion business to be more than just fashion but a “lifestyle change”.

For example, the new born business, Down Jacket: In 1972, in Montreal, I was involved in selling Japanese textiles (cashmere and fancy yearn) in the Canadian market. This is where my journey with down jackets began. At the time, I was a young man, and my Canadian textile agent, Bob, was wearing something that caught my attention. I inquired about it, and he introduced me to down jackets. I asked if I could try what he was wearing for a weekend, and I was immediately struck by how light and warm it was. During this period, I was engaged in the export business, and I began to contemplate the potential of introducing down jackets to the Japanese and global markets. However, I realized that if the style resembled what Bob was wearing, it might not appeal to the fashion market. So, I embarked on a search for fashion manufacturers who make down jackets. Later, in 1995, I finally found a maker in Italy who makes fashionable down jackets under the name of Moncler. Although at that time, Japanese customers had not heard of down jackets and the brand name, Moncler. I made an exclusive distribution contract with this maker for the Japanese market believing it could become a substantial business.

For a few years, this maker had some trouble and we were not selling well. However in 2002, Mr.Remo Ruffini became the owner and CEO of this company, and transformed the company to a global luxury brand with great success. After we succeeded in brand marketing of Moncler, we established a joint venture company in Japan in 2009. Moncler evolved into a luxury brand business, and as they achieved remarkable success, our joint venture also became a success.

Eager to nurture our own ventures, we subsequently acquired Mackintosh (UK, famous coat), Alexandre de Paris (France, hair accessory), J & M Davidson (UK, bag), Grès Paris (France, Couture), Daniel & Bob (Italy, Men’s Bag), Freemans Sporting Club (USA, Men’s wear) and several others. This transformation has shaped us into a global marketing company.

 

Your company has acquired notable brands like Mackintosh and J&M Davidson, among others, and collaborates with various companies and brands. Are you actively seeking opportunities to acquire more brands to your portfolio in the future?

Certainly yes. Our primary focus lies in importing and distributing excellent products with original design and good brands. And when the opportunity arises, we also consider licensing in Japan, depending on the specific product or item involved.

For example, the Mackintosh acquisition: At the time of acquisition, Mackintosh was dormant and unprofitable, but through strategic investments and our expertise in marketing management, we were able to rejuvenate the brand.

Our extensive experience in various markets, including the US, EU and Asia, has played a pivotal role in our success in global marketing of the brand. With this marketing know-how, we have managed to transform Mackintosh’s traditional coat into a contemporary and comfortable offering, all while preserving the core concept that defines Mackintosh.

Approximately seven or eight years ago, we were approached by a major Japanese apparel company. At that time, I was aware that they had lost a significant license with a famous British brand, which was a major licensing arrangement. They were actively seeking another strong brand to license, and they believed that Mackintosh was the ideal choice to help them regain their success.

Initially, I declined their request for a license because I had concerns about the potential impact on our import business. However, one of the top management executives of this company was persistent and visited us weekly to inquire about the possibility of obtaining a license. After careful consideration, we eventually agreed to grant them a license, but we imposed strict conditions on them respecting the original concept of Mackintosh. As a result, you can now find three lines of brands in retail stores: Imported original Mackintosh, licensed Mackintosh London and Mackintosh Philosophy.

 

Your company has successfully introduced European brands to the Japanese market. Would you consider expanding your efforts to export Japanese brands to foreign markets, such as the United States and Europe?

When it comes to textiles that we do, Japanese jeans fabric produced in Hiroshima and Okayama are known for their originality and uniqueness. We export their jeans fabric as high-end products, showcasing their exceptional quality. However, In the realm of garment manufacturing in Japan, there is room for improvement in terms of uniqueness. While Japanese designers have a strong presence in the global fashion market.

As a result, we have not engaged in business partnerships with Japanese apparel companies for exporting their products yet. However, if these companies begin to prioritize manufacturing more original and innovative designs, we would certainly be interested in exploring opportunities to export these to the global market.



In addition to your textiles and apparel division, you have a food division that offers products like honey, dried vegetables, spices, and frozen fruits. Could you share the motivation behind establishing this food division, and what are your plans for its future growth and development?

Initially, we focused on exporting textile to China, but there was significant pressure from Chinese corporations for us to buy Chinese products like soba buckwheat, honey, and peanuts. Consequently, we expanded into importing these items, although the soba business did not turn out to be lucrative. Nevertheless, other businesses eventually became profitable, that is how our venture into this field began.

Presently, we sell honey mainly in Gifu, Japan, a region that once housed honey farms but now largely relies on importing honey due to the labor-intensive nature of honey production. In fact, we are among the top importers of honey in Japan.

Our core business is primarily focused on import of fashion goods from Europe constituting approximately 90% of our operations, while the export side makes up the remaining 10%. Our involvement in the food industry now operates as a subsidiary.

 

The textile industry is a significant contributor to global CO2 emissions, and issues like fast fashion lead to a large number of garments ending up in landfills. Given your firm's involvement in garment distribution and retailing, what do you believe can contribute to making the fashion and textile industry more sustainable? Are there specific initiatives or actions your company is undertaking to promote sustainability within the industry and work towards a more sustainable society?

Our company has a distinct focus on the upper-middle-class and high-end market segments, tailoring our products to meet the preferences and needs of this clientele. We do not sell to mass merchandising stores and fast fashion stores; Instead, we prioritize garments that are in high demand and designed to be worn for extended periods as long as 20-30 years. As for our export textile, we take steps to ensure that our fabrics undergo a dying process that minimizes water usage. Additionally, we actively engage with sustainable materials, including organic cotton, recyclable polyester, and biodegradable materials.

Moreover, many small-scale Japanese companies involved in fabric production and dying struggle to meet all international standards required for sustainability. To bridge this gap, our company has obtained globally recognized standards, such as the GOTS (Global Organic Textile Standard) and GRS (Global Recycled Standard), enabling us to offer our services to these smaller companies and assist them in meeting international sustainability criteria.

 

Since establishing an office in Hong Kong in 1962, your international presence has expanded to Europe, the United States, and China. Looking ahead, which countries or regions have you identified as pivotal for the corporate growth of your firm?

As a trading company, a significant portion of our business, approximately 70% is derived from the domestic market. However, as we aspire to expand our presence in the global markets, both import and export business, leveraging our extensive experience in interpreting market demands.

Import business: Although the demographic situation resulting in a smaller market, the Japanese market is sizable for our kind products and remains a core part of our import activities.

Simultaneously, we are now actively developing markets in Korea and Taiwan for our European brands. While our expansion into the Chinese market is a part of our long-term strategy, we anticipate that it may take another two or three years before we make significant strides in China. The country is currently navigating economic challenges, and the cost of doing business in China is notably high. Nonetheless, we maintain two factories and a trading house in China, and we look forward to expanding our presence in the Chinese market with our European brand by retailing once the economic conditions become more favorable.

Export Business: We expect quite a growth of our export textile business in Europe and USA, where our selling offices are located.

 

Are you looking for local partners in the countries where you operate to help strengthen your overseas business?

We are actively seeking strong partnerships in Asia, with a particular focus on identifying reliable and knowledgeable local partners who have a deep understanding of the market and have a strong sales presence. In Taiwan, we already have our own subsidiary, and we aim to replicate this successful model by collaborating with valuable partners throughout the Asian region.

 

Looking ahead to your 80th anniversary in three years, what dreams or significant achievements would you like to have realized for your company during this period? Additionally, how would you like your company to be perceived in the global market as you continue to grow and evolve?

Our company operates a private, family-owned enterprise, and we do not pursue an IPO for the main company. However, we may consider the possibility of going public with our subsidiary companies in Europe. Our belief is that our products and brands are of such high quality and of original creation that they can effectively speak for themselves. We place a strong emphasis on delivering excellence through our products, rather than relying on extensive marketing effort.

Looking ahead, in the next three to five years, we may explore the option of consolidating some of our brands into one company in Europe with the intent of eventually going public through an IPO process for this company.

One of our notable projects involved the restoration of a white marble pyramid in Rome. Prior to our intervention, the marble had become dark and stained over time. We provided financial support for the restoration effort, which included the use of special chemicals to restore the marble’s pristine white appearance and sourcing marble from Carrara to replace any broken or missing pieces of the pyramid.

This project strengthens our commitment not only to conducting business on a global scale but also to making meaningful contributions to the well-being of other countries where we do business for a long time.


Interview conducted by Karune Walker & Sasha Lauture

  0 COMMENTS