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5 Things You Should Know About Isetan

IsetanFor those partial to the odd spot of retail therapy, Singapore is the place to come.

You can buy almost anything your heart desires provided your wallet is deep enough – and at practically any time of day or night (well, at the Singaporean institution known as Mustafa’s at least).

But one shop that stands out from the rest is Isetan (SGX: l15) – one of the popular Japanese department stores that grace Orchard road.

Kimono shop

Whilst Isetan is now known for selling everything from sushi to furniture, its beginnings were far more humble.

The company was founded way back in 1886, where like many of Japan’s department stores it began life as a small kimono shop.

Tanji Kosuge had been apprenticed to the Isesho Drapery in the busy district of Kanda, Tokyo, where by the age of 20, he had risen to become banto (head clerk). However he had bigger dreams and after marrying, decided to go into business for himself.

Kosuge opened his new store, the Iseya Tanji Drapery on a busy intersection near the Kanda River. Business was good and Kosuge quickly became known for his high-quality original kimono designs as well as his handmade, unique and beautiful obi (kimono belts). Kosuge was full of ideas to improve business, visiting customers’ homes with samples, holding seasonal sales and expanding his premises.

Isetan Drapery

In 1907, Kosuge renamed his kimono store Isetan Drapery. He considered following in his rivals’ footsteps, many of whom were trying their hands at expanding their shops into department stores – but decided the time was not right for him.

Isetan Partnership  

In 1916, and upon his death, Kosuge’s son-in-law (also named Tanji Kosuge) took on the business – and having read up on retailing methods, decided to make the move and convert the kimono shop into a department store. He created the Isetan Partnership to run the store.

However, a dark day was to put paid to any plans.

The Great Kanto Earthquake  

In 1923, Kanto experienced the worst four minutes in memory, as the deadliest earthquake in Japan’s history at that time shook the region. Tokyo was devastated and around 130,000 people were killed.

The store in Kanda was destroyed – and Kosuge had to make some decisions. As the roads were re-planned, Isetan’s spot was no longer on a busy intersection. What’s more, many of the people of Kanda had moved away from the devastation in Central and Eastern Tokyo, to the suburbs in the West.

Another spot was chosen and in 1924, the new Isetan department store in Kanda was opened, selling children’s toys, clothes, cosmetics and household goods, in addition to its kimonos.

Kosuge decided he would build another, brand-new eight-storey department store – however, by 1928 had abandoned the idea. Kanda had changed – and with a railway line circling Tokyo and a newly extended subway, it was the areas near the train stations that were becoming the busy hubs.

Shinjuku  

After much deliberation, Shinjuku, with its railway station in the West of Tokyo was chosen for Kosuge’s brand new department store.

Isetan Company Ltd.  

In 1930, Kosuge created the Isetan Company Ltd and purchased the land adjacent to the Hoteija department store in Shinjuku for his new building.

With nine floors (two below ground and seven above) including an auditorium, Isetan was a sight to behold and 130,000 people flooded through its doors on its opening day in 1933.

The old store in Kanda was soon to close its doors forever.

By 1935, Shinjuku had established itself as one of Tokyo’s new city sub centres. But while Isetan flourished, its neighbouring store and rival Hoteija was floundering. Kosuge bought the ailing department store and redeveloped it as part of Isetan.

World War II  

Isetan somehow managed to remain open for business during the war, although its shelves and displays were sparse and sombre. Following the war (and a fire or two) the Allies occupied the building until 1952, when Isetan took back control.

Post-war Fashion  

The war certainly had an effect on fashion. Japanese women had had to “make do and mend” with what they had – which was mostly blouses and monpei (Japanese style pantaloons) and the late 1940s saw military style clothing become fashionable. 

Japan’s Fashion Leader

Isetan led the way, hosting the Tokyo Fashion 51 show. Kosuge expanded and modernised the store, dividing it into areas to appeal to different demographics and promoting its aim of being a fashion leader.

In 1960, Tanji Kosuge II stepped down and was succeeded by his eldest son Tanji Kosuge III. In 1961, Isetan became a publicly traded company and 1963 saw the introduction of designer brands with a Pierre Balmain haute couture salon.

The company was always trying something new – and in 1968, decided to separate out men’s clothing into a building of its own. By the late 1960s Isetan was Japan’s number one fashion retailer and took this role very seriously.

Fashion Research  

The company created its own “think tank” – a research institute that would study and analyse fashion and consumer trends – which was followed up with an office in fashion capital Paris that could help to supply first hand information on fashion trends.

Isetan Singapore  

With business doing so well at home, the time had come to expand and in 1972, Isetan chose Singapore for its first overseas venture, with Singaporeans flocking to the opening of the new store.

Finance, food and all kinds of finery…  

Isetan continued to try new things, setting up subsidiaries to create brands for speciality stores, as well as supermarkets, gourmet food stores and even a finance company and travel agency. The company even began importing and selling cars and continued to open stores all over the world.

In 1988, the company saw the first Isetan store open in London, followed by Vienna and Barcelona, with an international finance company established in Amsterdam to support them.

Barney’s  

Isetan went into partnership with US retailer Barney’s, and together they opened the first Barney’s store in Tokyo, with extensive plans put in place to expand throughout Japan.

However, the decline in the Japanese economy in 1991, hit retailers hard – forcing many to declare bankruptcy. Consumers stopped spending, and Isetan’s grand expansion plans turned to huge debts around its neck.

A takeover of Isetan was narrowly avoided as its bank: Mitsubishi Bank stepped in. However, there was a high price to pay. The bank insisted that Kosuge step down as president – to be replaced by company veteran Kazumasa Koshiba who quickly put a halt to any plans for expansion, including those who were in partnership with Barney’s – which was to cause years of legal wrangling.

But did you know…

  1. The name Isetan comes from combining the names ISeya and TANji
  2. Tanji Kasuge was born Tanji Nowatari. When he married Hanako Kosuge in 1881, he took his wife’s surname to become Tanji Kosuge. After his death, his son-in-law took the name Tanji Kosuge.
  3. Isetan was the first Japanese department store to have its own car park.
  4. The escalators and elevators were removed from the Isetan store during World War II to be melted down for the war effort.
  5. Isetan was the first store in Japan to rationalize women’s clothing sizes – developing a system that has since been utilised by all Japanese department stores.

Today, Isetan is still regarded as one of Japan’s top department stores, with its flagship Shinjuku store, which is constantly showcasing new trends and products widely considered to be one of the most influential in Japan.

While the company no longer boasts stores in Europe, it has branches in Taiwan, China, Thailand, Malaysia as well as six stores and a supermarket right here in Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Alison Hunt doesn’t own shares in any companies mentioned.