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INVENTORY LESSON LEARNED

Bomb bra put Peach John on path to popularity

by Kanako Takahara

Two decades ago, the ideal career path was to join a blue chip company and steadily climb the corporate ladder until retirement — a system that helped sustain Japan’s economic growth.

But in recent years, entrepreneurs relying on their wits and fresh ideas have carved out new markets or introduced new business styles and are now emerging as role models for younger generations.

In this occasional interview series, we will feature stories on those entrepreneurs, who perhaps hold the key to a more competitive Japan.

At first glance, Peach John Co.’s mail-order catalog looks like a fashion magazine. Three models, in black-and-white dresses, beam from its cover. The copy reads “The lingerie perfect for spring dresses.”

Why the fashion magazine look? “It’s because I want people to read every issue we publish,” said Peach John President Mika Noguchi, 42. “People get direct mail every day, most of which will go straight into the garbage. If we don’t make something worth reading, it’ll be thrown away.”

Noguchi, who goes by the nickname Mika John, wants customers — the company targets women in their 20s — to leaf through every page of the catalog, which is also available at bookstores and convenience stores, to find the products they like.

Her strategy appears to have paid off. The company now has on its mailing list about 2.8 million customers, reaching about 25 percent of women in their 20s nationwide.

Noguchi, a mother of four, started Peach John as a small mail-order company importing American lingerie with her now ex-husband, Shoji Noguchi.

But what made Peach John famous was a padded bra imported from the U.S. that pushed up the breasts to create cleavage. The Bomb bust bra, first sold in 1993, became an instant huge hit and Peach John’s major product.

At the time, bras sold in Japan were either pink, white or beige and were not designed to make breasts look bigger, Noguchi recalled.

“When I first saw the bra (in the U.S.) I thought it was epoch-making,” she said. “I knew there would be many women who would want to buy it.”

Her instinct proved true. Customers jumped at the new bra. The fax machines spat out orders day and night, forcing Noguchi to go to the office at night just to change the paper rolls. To date, 3 million pushup bras of the same kind have been sold.

“It’s not just about making your breasts look bigger so that men will be attracted,” she said. “It’s about wearing cute lingerie underneath that will make girls feel tender and generous.”

Noguchi said the lingerie business is less risky than the clothing business because it isn’t seasonal.

“If I invent a bra that becomes a hit, I can continue to sell it for years,” she said.

The business steadily expanded until after the turn of the millennium, when Peach John faltered.

“Because we received so many orders, customers had to wait for three to six months to receive their products,” Noguchi said. “Our staff always had to deal with complaints from customers.”

To solve the problem, Noguchi increased inventory. But then the products didn’t sell as well as she thought they would.

“Before you knew it, the company was an inch away from bankruptcy,” she said. “That is how I learned how important it is to stock an appropriate amount of inventory.”

At that point, Noguchi had no choice but to lay off half of her 500 employees, slash her salary and cut the advertising budget from around 900 million yen a year to 300 million yen. She also increased her appearances in the media and moved up the release date of products to increase sales.

The restructuring effort allowed the company to pay back 2 billion yen in debt in 13 months. In the business year to last May, Peach John posted a pretax profit of 2.8 billion yen on sales of 17 billion yen.

That same month, Peach John and Wacoal Holdings Corp., the nation’s leading lingerie maker, formed a capital alliance — a move that allowed Peach John to rake in about 15 billion yen in capital in exchange for 49 percent of its shares.

After experiencing all the ups and downs as a company president, Noguchi said business skills aren’t the most important quality of a successful entrepreneur.

“It’s about being an intriguing and eccentric person,” she said. “My job is to make other people want to work with me.”

Even if Noguchi comes up with a brilliant business plan, which she says she does constantly, she cannot begin to make it happen without quality staff to put in charge.

“How big the company expands from here depends on how many competent people I can recruit,” Noguchi said. “It’s more important for me to hire three competent employees who can come up with their own business strategies than to hire 300 people who can only work by the book.”

Key events in Mika Noguchi’s life

1965 — Born in Sendai

1983 — Graduates from high school in Sendai; comes to Tokyo to study graphic design.

1986 — Joins a mail-order company where she learns how to run a business.

1993 — Bomb bust bra, a lift-up bra Noguchi imported from the U.S., is a big hit.

1994 — Establishes Peach John Co.

1998 — Peach John begins selling the Circuit bra, a bra with a wire that encircles the entire breast, under its own brand. Noguchi helps design the bra.

2001 — Peach John narrowly avoids bankruptcy; repays debt in 13 months.

2005 — Noguchi appears on the cover of the Asian version of Time.

2006 — Peach John forms capital tieup with Wacoal Holdings Corp.

For related stories:
Words to live by: Mika Noguchi