Fashion Retailer Sees Japanese Shops as Good Fit

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Japanese shoppers have long sewn up a sizable cut of international online sales for fashion retailer Planet Blue. So when it came time for the Santa Monica retailer to expand abroad, it was only natural to pinpoint Tokyo.

The company, which has four stores in Los Angeles, has partnered with apparel retailer and manufacturer Sanei International Co. in Tokyo to open three stores in the Japanese capital before the year is up. The first will open in March in Roppongi Hills, an expansive Tokyo retail complex with more than 200 shops, cafés and restaurants.

James Williams, chief executive at Planet Blue, said Japan was an attractive market to commence international expansion because it accounts for 10 percent of the company’s international web traffic, but 20 percent of international web sales. That’s significant given the fact that Planet Blue attracts web traffic from more than 150 countries.

“We’ve always had a strong connection with the Japanese consumer,” Williams said. “They really seem to appreciate the Southern California beach lifestyle. But mostly, to start, we had a pretty significant Japanese customer base online.”

Sanei has brought other U.S. fashion brands to Japan, including New York women’s fashion and accessories companies DVF and Kate Spade LLC.

Paul Zaffaroni, a director at Newport Beach investment bank Roth Capital Partners LLC, noted that another L.A. fashion retailer, Fred Segal, will also open stores in Tokyo next year. He said that the arrival of Planet Blue and Fred Segal show a growing Japanese desire to adopt the laidback Southern California fashion often portrayed by Hollywood.

“Southern California style is very aspirational for a lot of people, especially if you’re not living here,” he said. “You see it in the movies and in celebrity weeklies, and that’s what they’re selling.”

Williams said Planet Blue will open as many as 12 stores in Japan in the next five years while it considers further expansion in Asia. The company also has plans to expand in the United States, though Williams declined to elaborate.

“Japan, and Tokyo in particular, are important fashion barometers for the entire Asian market,” he said. “We have our eye on other Asian markets, but Tokyo will be the test.”

Malibu roots

Hawaiian-born Ling-Su Chinn, president and founder of Planet Blue, opened the company’s first store in Malibu in 1995. Back then, she stocked her store with third-party brands she discovered from up-and-coming fashion designers. The shop flourished, and over the next 17 years she opened stores in Santa Monica, Venice and, most recently, Beverly Hills. She began designing and manufacturing her own fashion lines – Blue Life and Blu Moon – to sell in her stores in 2009 and 2010 when the recession left her looking for better margins than wholesale prices could provide.

“I thought, ‘I need this and that, I’ll just make it,’” she said.

Today, the company has about 70 employees and about 40 percent of the merchandise in a Planet Blue store is designed in-house, while eclectic third-party brands make up the remainder.

Sanei International approached Planet Blue in 2008, but a planned deal was killed by the recession. They renewed talks last January, and by May, the two companies had signed a joint venture agreement.

Planet Blue declined to disclose details of the deal, but Williams said his company took a significant ownership stake in the expansion.

Before making the deal, Planet Blue tested the Tokyo market by opening two weeklong pop-up shops in Sanei International’s popular department store Frees. Chinn said the pop-up shops were successful, selling out of a lot of the merchandise before the week was up.

“I think they did as well as I expected, because when Sanei does something, they do it right,” she said. “They wouldn’t put all this money into the brand if they didn’t think they could multiply the stores in the near future.”

The physical appearance of the Tokyo stores will largely mirror those in Los Angeles, but the fashions sold inside will be a little different. To ensure the Tokyo stores’ success, Planet Blue and Sanei International will work together to produce a third fashion line exclusive to the stores in Japan.

Chinn said the line, called Planet Blue World, will be more conservative than the other two Planet Blue lines in order to appeal more to Japanese women.

“The Japanese woman doesn’t dress as sexy as the Los Angeles woman,” she said. “They don’t really show skin, so they tend to buy things that are more flirty than sexy.”

And unlike Blue Life and Blu Moon, which are strictly fashion brands, Planet Blue World will incorporate linens, tableware and home goods.

While translating style from one culture to another can be a challenge, Williams said he thinks Los Angeles and Tokyo have enough in common to make the jump.

“There are a lot of similarities between the L.A. fashion consumer and the consumer in Tokyo,” he said. “Both are at the center of fashion, however they don’t necessarily follow the New York and Paris and Milan model of fashion. They both march to the beat of a different drum.”

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