Overview of the Retail Apparel Market

Retail apparel market

The scale of the Japanese retail apparel market is around ¥9-10 trillion per year. The market entered a period of contraction in the immediate aftermath of the collapse of Lehman Brothers in 2008, bottoming out in 2010. Thereafter, the market scale trended upward on a year-on-year basis. In 2013, a wide range of factors including the large-scale renewal of major department stores in metropolitan areas as well as robust results in specialty and online store sales contributed to the market’s continued expansion.

Trends in the scale of Japan’s retail apparel market and UNITED ARROWS Group sales

Trends in the scale of Japan’s retail apparel market and UNITED ARROWS Group sales

Sales channel

In this context, the share of specialty stores and others*1 sales continues to climb. Growth is especially prominent in online sales, where major apparel retailers as well as select shops are enjoying considerable success in strengthening their activities in this area. Turning to department stores, results have been mixed. On the one hand, activities in major metropolitan areas have grown in recent years. On the other hand, business has contracted in suburban areas. The net effect is an overall downturn on a year-on-year basis.

*1 The others channel includes mail order / online (Internet, catalog, television, others) as well as discount stores.

Trends in sales composition ratio by sales channel

Trends in rates of sales growth by sales channel

Select shops

Select shops are stores that provide customers with products based on unique brand concepts and the discerning judgment of their buyers.

There are also a significant number of companies that adopt an SPA*2 (specialty store retailer of private label apparel) strategy under which they offer a mix of purchased and private label products. In handling products that offer the appeal of high-value-added attributes and a distinctive uniqueness, select shops are positioned between department and specialty stores at the mid- to high-end price range. As such, they are relatively unaffected by trends in economic conditions.

UNITED ARROWS LTD. maintains a balance between attracting customers by carefully handpicking selected designer brands from Japan and overseas and ensuring high profitability by offering private label brands. The Company has the largest sales of any company adopting a select shop business model and is the only such company to have publicly listed its stock.

*2 ‌SPA: A fashion company with comprehensive involvement from manufacturing through to retailing

Trends in total sales of five major select shop companies and UNITED ARROWS LTD.’s market share

Trends in total sales of five major select shop companies and UNITED ARROWS LTD.’s market share