Danish Fashion Going Global - Spandet And Partners

DANISH FASHION GOING GLOBAL 15
Established at home, many Chinese brands are exploring export opportunities,
expecting that the future of China will be found in the history of Japan or Korea.
Those nations began as low-cost producers and subsequently created respected
global brand leaders within many industries and product categories.
Companies big enough to go global are the most encumbered by commoditized
products and services. The small- and medium-sized Chinese companies compared
to Western entities are still hobbled by top-down decision making and do not have
the scale required for international expansion.
Today, Chinese companies that grasp advantages in value-added products with the
ability to charge a premium price such as fashion lack the critical mass required of
global power brands. But who can predict what happens tomorrow?
With capital available in China and given the massive decline in asset values in
existing (European fashion) brands, it is therefore anticipated that Chinese
companies and investors will consider an acquisition strategy leading to Chinese
ownership of European (and American) brands and semibrands to penetrate into the
European markets and eventually also China through existing brands.
One of the most influential Japanese clothing brands to emerge over the past two
decades, A Bathing Ape, has been snapped up by a Hong Kong apparel maker in
early 2011 in a move that underscores the growing wave of acquisitions of Japanese
firms by their Asian competitors.
A Bathing Ape—better known as BAPE—grew from a single shop on a backstreet in
Tokyo’s trendy Harajuku district. Its T-shirts, hoodies, and jeans, designed by
Tomoaki Nagao, known as Nigo, acquired a cult following among young Japanese
men when the brand launched in 1993 and was later embraced by hip-hop icons
such as Kanye West and Jay-Z. Microsoft’s X-Box and Nintendo’s DS game handset
were emblazoned with BAPE designs, and BAPE-branded condoms were part of the
label’s lineup.
Now, I.T Limited, a Hong Kong–based clothing company, is set to buy a roughly 90%
stake in Nowhere Co., the Japanese operator of A Bathing Ape, for 230 million yen
($2.8 million) from Mr. Nagao. I.T is aiming to increase its market share in street
fashion in both Hong Kong and mainland China, where the appetite for A Bathing
Ape’s $75 T-shirts is growing as younger Chinese consumers look for edgier styles
with an established brand. A Bathing Ape opened its first store in Beijing in January
and has retail outlets in Shanghai, Hong Kong, Singapore, Taiwan, and New York.