It’s no surprise that retailers are hurting amid the economic downturn and deflation. What is shocking, however, is that one of them is Shibuya 109, one of Tokyo’s most popular fashion complexes.
In fiscal 2009 the commercial icon experienced a year-on-year decrease in sales for the first time in 14 years.
“The biggest factor is probably the weak consumer confidence,” Kunio Soma, Shibuya 109’s general manager, said in an interview with The Japan Times last month.
The situation still appears difficult. The economy remains unstable and competition is only getting tougher with the growing popularity of fast fashion brands such as Fast Retailing Co.’s Uniqlo and Swedish H&M.
Shibuya 109 has become a landmark in the bustling district from which it takes its name, a longtime symbol of the latest in young girls’ fashion trends. Soma said the building is committed to making a comeback this fiscal year through a laserlike focus on young female fashion and a constant stream of fresh items, brands and trends, which is how 109 established its charismatic status.
Shops in Shibuya 109 rang up a total of ¥28 billion in sales in fiscal 2008 but experienced a drop of somewhere between 5 percent and 9 percent in the business year that ended in March, according to Soma, who declined to give the specific number.
“It was worse than we expected,” with deflation pushing down per-customer sales, although the number of visitors increased, Soma said.
He also pointed to the yen’s recent appreciation as another possible contributing factor, since the building attracts many foreign tourists, especially from Asia, who are fascinated by Japan’s fashion.
But while many retailers, including other fashion complexes, have been struggling for years, Shibuya 109, run by TMD Corp., which is owned by Tokyu Corp., doubled its sales over the past 13 years.
In contrast, annual sales at major department stores have fallen continuously for the past 13 years.
“The biggest strength of Shibuya 109 is probably its ability (to attract many trendy shops),” and they keep drawing people, Soma said.
Indeed, the complex, which currently has about 120 shops filling its eight aboveground floors and two basement levels, has established itself as a trend-setting spot that has often been a focus of media attention.
Shibuya 109 specializes in providing outfits for young women and has popular brands, including Cecil McBee, Egoist and Blue Moon Blue.
It started climbing the ladder of popularity back in the mid-’90s, when magazines that focused on the “gal” style of fashion debuted and were widely read by teens. The magazines often featured shops in 109.
“Gals” refer to young girls who tend to dye their hair brown or blonde, wear colorful casual clothes and put on showy makeup. Magazines like Popteen and egg are examples that feature gal-style fashion.
Along with the media impact, pop queen Namie Amuro was wearing outfits sold at some of the stores in 109 when she rose in popularity in the 1990s. This had a big influence on many young women and her followers were called “Amuraa.”
A typical Amuraa dyed her long hair brown and wore miniskirts and thick-soled boots.
As the building began to be seen as a trend-setting spot, sales staff at some of the stores were also featured in magazines. Regarded as fashion leaders in their own right, they came to be called “charisma clerks.”
“The media sent out information that reflected the trend at that time, such as ‘charisma clerks’ and the Amuraa boom, and this really boosted the building’s popularity,” Soma said.
He added that another strength of Shibuya 109 is its quickness in providing the latest fashion items following the trends young women crave.
Nearly a third of the stores undergo remodeling or are replaced every year, according to 109.
To regain sales momentum this year, 109 will go back to this basic sales policy of swiftly providing fresh items to maintain brand values, Soma said.
“It’s important to have brand values to fight deflation. It is true that items with reasonable prices can be sold better amid deflation,” but growing brands is necessary, as is keeping a balance between items’ prices and values, he said.
“We would like our tenants to do business where their brand identities stand out.”
In the meantime, the competition with other fashion outlets in Shibuya has grown more intense.
Last September, an H&M store opened near 109, and a new Uniqlo opened just behind the building in March.
Soma said he welcomes them because they attract even more people to Shibuya.
Toshinari Horiuchi, a senior analyst at QBR Corp. who watches the apparel industry, said 109’s name recognition still gives it a bit of an advantage.
“Shibuya 109 has already established a certain brand value, and I think it can keep that position by brushing up its existing strategies. It has international brand value as well. The name recognition is growing among young people in Asia,” he said.