Since 1879, Blooming Nakanishi & Company – founded in Nihonbashi, Tokyo – has been a premium dealer and manufacturer of textiles, including handkerchiefs, hotel supplies and tablecloths.
In the last 25 to 30 years, the world has seen the rise of regional competitors that have imitated the successful Japanese model but have done so at a lower cost, displacing Japan from certain mass markets. Despite this, many Japanese retail brands, such as MUJI and UNIQLO, have found success abroad. What advantages do Japanese retail brands have today, and what added value do they bring to international customers?
The Japanese retail industry is characterized by major conglomerates such as MUJI and UNIQLO. Almost 20 years ago, UNIQLO clearly articulated a vision that went beyond the domestic market. It was eager to expand the brand's reach internationally, to make UNIQLO known to a global audience. Today, there is no denying that UNIQLO's presence transcends its origins within Japan, and looking back 20 years ago, its bold ambitions are evident in the numbers it set for itself: annual sales targets. At the time, this figure was astonishing, especially for a stand-alone company. MUJI was similarly driven by its core values, strategically exploring the global arena and embarking on a path to reach a broader audience. These corporate entities are the conduits through which the essence of Japan is communicated to the rest of the world; it is as if Japan as a whole embodies a retail brand. This comprehensive macroeconomic evolution has steadily matured over the span of two decades, with these giant corporations playing a role in promoting the strengths of Japan's textile manufacturing industry to the rest of the world.
Japan is the world's oldest society, and its rapidly shrinking population is causing a labor crisis and a shrinking domestic market. What challenges has this demographic shift posed for your company and how have you responded?
There are both positive and negative aspects to this situation, and it has actually posed some challenges. Overall, this is not favorable for the domestic market itself, and the changing demographics are prompting Japanese companies to seek success overseas. MUJI and UNIQLO were pioneers in entering other markets early on. We are following the strategies of these large companies. From the very beginning of our company's existence, we have felt the inevitability of entering foreign markets and gaining customers there.
We can say that this situation is tough, and the overall shrink is causing problems for many companies. On the other hand, the need to develop overseas markets may not be all that disadvantageous. In fact, it opens up valuable business opportunities for companies like ours to introduce their products to a wider audience.
Over the past three years, many stores have closed due to COVID; the popularity of e-commerce has skyrocketed, with sales in Japan increasing by 13%, making it the fourth-largest e-commerce market in the world. How has your business adapted to take advantage of this e-commerce growth?
We have been active in the e-commerce business since before the COVID-19 pandemic began. While the pandemic has certainly accelerated the importance of these activities, it is important to note that this is not a recent development for our company. We manage two brands that have been effectively marketed and sold online, and our experience in this area has been very positive thus far.
Even though COVID-19 has played a role in the decline of brick-and-mortar stores, Tsuyoshi Shimoji, president of TSI Holdings, stressed the importance of the consumer experience, whether online or in a physical store. What kind of technology is being deployed to provide customers with a unique in-store experience?
It is a bit difficult to pinpoint a clear answer. We have embarked on online VR sales and created virtual stores that customers can navigate. We are currently in the process of testing these technologies and are eagerly monitoring the exact metrics. We must take into account the nature of the products we carry. Unfortunately, the current state of VR technology does not exactly match our product line. We will always be looking for technologies that can enhance the synergy between our stores and online.
What was interesting to us in our research was that your company was founded over 100 years ago in 1879. Can you tell us about some of the key milestones in the history of your brand and company?
Indeed, our company boasts a rich and extensive history. Perhaps the most notable milestone was when we successfully attempted licensing: in the 1970s, we signed a licensing agreement with Pierre Balmain to conduct production activities under their esteemed brand. This partnership was undoubtedly a fortunate one for us, as it coincided with a period of markedly surging sales. In retrospect, our important milestones have often been associated with the development of close relationships with prominent foreign brands. And at the same time, we have simultaneously developed various house brands.
Blooming has developed its materials for use in its products, such as "Serefine," a material with a core of staple fibers that provides wrinkle resistance, three-dimensionality, elasticity, and stability. In addition, the use of cotton fibers provides a soft texture, high water absorbency, and good coloration. What was the reason behind the development of CELEFINE?
Our core business is not in the production of raw materials, nor do we intend to make it the center of our business strategy. Rather, our constant pursuit is the search for attractive materials, and Cerefine just happened to fall within the spectrum of materials that intrigued us. So, on an experimental basis, we set out to create a product using this material. The results of this trial phase proved to be extremely positive and exceptional. From the moment we had this material in our possession, we recognized its potential and became convinced of our ability to create amazing products from it.
Throughout its history, Blooming Nakanishi has expanded its product portfolio. We know they make handkerchiefs, but you also make tablecloths and offer educational services in table decorating. Could you tell us about Blooming Nakanishi's product portfolio and its best-selling products?
Let's start with our main product line, handkerchiefs. Our signature line, called Classics the Small Luxury, is in the spotlight. The appeal of this series and its products lies in its extensive distribution network, which encompasses department stores and specialty stores in Japan, as well as directly managed stores. In addition, we cater to a wide variety of specialty stores, offering handkerchiefs in large quantities as if they were wholesale. This approach makes them widely available in department stores and specialty stores. In particular, department stores are often part of larger chains or franchisees, presenting significant opportunities for handkerchief sales.
Moving on to another focus, let me introduce a product for hotel chains called Nokton. Nokton has a 70-year history of supplying hotels in Japan. Our first dealings with hotels began with the supply of tablecloths. Often, hotels have meeting and reception rooms and require elegant and sophisticated tablecloths. Starting with tableware, we evolved organically and diversified our product portfolio to include soft towels. Interestingly, our product portfolio typically follows an evolutionary trajectory, with each product line progressing seamlessly. Our journey from tableware led us to the comprehensive coordination of hotel rooms. This includes everything from pillowcases and mattress sheets to face and body towels. Our strategy is to occupy a diverse textile niche related to hotel accommodations and to be a total textile solution for hotel chains looking for quality.
In some respects, the hotel business outweighs the handkerchief business. However, from a profitability standpoint, handkerchiefs remain the cornerstone of our business. Nevertheless, the domestic handkerchief market is shrinking, and in contrast, hotels are booming. This resurgence is due to the influx of new hotels, which coincides with a renewed appeal to Japanese tourists. This phenomenon has had positive results for us.
We are pleased to introduce a new product: the eco-bag. Eco bags, often referred to as "eco-for-life bags," are environmentally friendly and find relevance in everyday activities such as grocery shopping. The Eco Bag shares materials with our handkerchief business and proudly showcases the synergy between the two businesses.
This year marked the re-launch of Japan's tourism boom, but when it comes to the hotel business, it is a very competitive market. There are hundreds of companies looking to supply hotel guest room textile products such as sheets and linens. What do you see as your company's competitive advantage in such a bustling market?
Our direct customers are not the hotels themselves, but the companies that lease products to them. These intermediary companies partner with laundry service providers for hotels. Through these intermediaries, our product line goes to the hotel chains that use their services.
The most important criterion for these intermediaries is the meticulous selection of suppliers. We need to stand out significantly to meet the stringent quality requirements espoused by hotels across the country. Our products must be superior to our competitors in durability, versatility, and overall superiority. Unfortunately, the downside to this pursuit of excellence is price. However, this high price point is consistent with our involvement with respected hotel chains that prioritize first-class quality over cost-effectiveness.
Japan s very particular about hotel linens. As foreigners, we may often feel that Japan is too particular about details. You mentioned earlier that you are in the process of expanding overseas.
In short, our view is that excessive emphasis on quality is not a universal necessity. As you have pointed out, the Japanese market tends to demand strict standards. It is very important to recognize these differences in customer expectations. Our approach is focused on understanding customer preferences and identifying their satisfaction thresholds. A positive aspect of this dynamic is that the influx of tourists to Japan allows them to experience the high quality that Japanese companies can offer. The experience of engaging with Japanese products often leaves an indelible mark. Once one experiences the Japanese standard, it is hard to pass it up.
Can you tell us the specific reasons why the Nokton brand is chosen by luxury hotels and businesses leasing to hotels?
The appeal of Nokton is that it combines traditional Japanese techniques with the finest materials to create linens for hotels. We are particular about the way we manufacture our linens and towels. You mentioned the "Royal" and "Forest" lineups, and for "Royal" in particular, we are particular about using the finest materials. For Royal, we use American Sea Island cotton, which has traditionally been used by Bloomington Nakanishi.
Which of the two brands, Royal and Forest, will be the centerpiece of your overseas expansion?
Ideally, both, but we intend to start with the Royal line first. We will start with the Royal line first, because "Royal" is a brand based on white, and as you know, white is the predominant color in hotels all over the world. With our superior products, we can show why our white products are simply better white than our competitors.
Tell us about your Nokton brand nightgowns and bathrobes.
We currently sell bathrobes and are in the process of redeveloping our nightwear line, including nightgowns. It may be some time before they are released. We started out using silk as the material, but now we are changing to something smoother.
Being Nokton, are there any other advantages or points you would like to talk about today?
Besides Nokton, we are currently working on new organic cotton for hotel linens, which is Global Organic Textile Standard (GOTS) certified. In fact, this is a very exciting opportunity for us, as it will be the first fabric in Japan to be certified by GOTS. This GOTS is an international certification organization.
The "CLASSICS THE SMALL LUXURY" handkerchief specialty store shows that we offer semi-custom products with a "one-of-a-kind" feel. We also saw embroidery styles from China and Vietnam. Can you tell us a little more about the process of creating custom-embroidered products? Are there any custom products that you are particularly proud of?
What makes the CLASSICS brand unique is that we offer a variety of hand-embroidered handkerchiefs. Some embroideries originated in countries like China and Vietnam, but our technique originated in France. Over 100 years ago, we imported these French embroideries to Japan in the form of handkerchiefs. This led us to look for ways to further customize them for our customers.
There are many types of embroidery. First, there is the customization that we as a company produce in cooperation with embroiderers in Vietnam and China. The second is the customer's request to add embroidery to the handkerchief. This is especially common when the handkerchief is given as a gift. Our company offers a service that allows customers to add their names anywhere on the handkerchief itself. In fact, each letter has 33 different patterns for the customer to choose from. We can also embroider the customer's signature on the handkerchief.
There are three levels of customization. The first level is a customized design, where the finished design is sold ready-made; the second level is one-point or name embroidery anywhere on the handkerchief; the third level is signature embroidery on the handkerchief, where the customer can choose to have his or her signature embroidered on the handkerchief.
How long does it usually take from order to delivery?
It depends on how busy the store is, but usually from one to two hours. Signatures, on the other hand, usually take two to three weeks. 90% of the customers who purchase handkerchiefs at the store request personalized embroidery.
As the president, which style do you prefer?
These days, there are fewer and fewer people who understand and know how to do embroidery, especially the Chinese style. This means that this style is becoming rare. Personally, I love Vietnam. The food culture in Vietnam is wonderful, and the people who work there are very hardworking and passionate about their work. I would like to continue to work with Vietnamese embroiderers to strengthen our product line.
As for children, they are not the most considerate when it comes to products. Your company offers the Bloomies line of handkerchiefs specifically targeted to children. How does Bloomies address the wear and tear that children can inflict on handkerchiefs over time?
Essentially, the quality and longevity of Bloomies handkerchiefs are the same as those for adults. Since Bloomies targets children, the design must be more fun and entertaining. Sometimes designers create educational design patterns. In fact, some designs allow children to play on the handkerchief, basically folding the handkerchief to change the design and create a storybook for the children. There are designs for Little Red Riding Hood and Alice in Wonderland, as well as designs for learning the piano and fruit. Bloomies products are highly appreciated for their fun and educational aspects.
Is the Bloomies line targeted specifically at Japanese customers, or are you looking to expand overseas?
We are already selling in Asia, and sales are going well. We are also considering targeting Europe and the U.S., but we feel that we need to rethink our design to make it more attractive for those markets. For the time being, we are thinking mainly of the Asian market.
If you expand into the European and American markets, how will you overcome the image of handkerchiefs as a luxury item rather than a daily necessity?
Certainly, Japan has its own unique handkerchief culture that does not exist in the West. First of all, it is important to change the mindset by showing what handkerchiefs are all about, and we believe the best approach is to promote the classic brand and show consumers how to use them. We have many inbound tourists from overseas, so I think it is important to seize this opportunity to show them how good Japanese handkerchiefs are.
If you had to choose a favorite product, what would it be?
Without a doubt, it is the CLASSICS THE SMALL LUXURY handkerchief. In their understated elegance, handkerchiefs have the power to lift one's mood for the day. Interestingly, the handkerchief I am holding today is made primarily from hemp.
Hemp has an almost magical appeal to me, both as a plant and as a material. Hemp is surprisingly easy to cultivate and its uses are many and varied. It is interesting to note that hemp is not traditionally used in the production of handkerchiefs, and even if it is ignited, it produces very little smoke.
I would like to continue to promote handkerchiefs and hotel linen products without being restricted by national or international borders.
One way to overcome barriers to understanding foreign markets is to partner with local companies. Is finding partnerships with foreign countries in your company's interest?
Certainly, we have tried to enter markets in China, Taiwan, Singapore, and Malaysia. Unfortunately, these attempts have been temporarily suspended without much success. Timing is of the essence, and now may be an opportune time to revisit our overseas expansion.
Almost two years ago, we opened a pop-up store in Singapore for our " CLASSICS THE SMALL LUXURY " handkerchief line. These stores yielded promising results, with a clear increase in sales in the country following this venture. We have also expanded into Amazon US, where several of our products are sold. However, we acknowledge that we are still working hard to achieve results that we consider substantial.
In your expanding international strategy, are you thinking only of exporting finished goods or do you have a model similar to the Nokton business?
Frankly speaking, we are actively exploring all possibilities. This includes both finished goods and the Nokton Hotel business model. Our success in foreign markets depends on several factors, including brand integrity. The stories we spin abroad need to be finely segmented, and to do that we need a robust infrastructure. Basically, the stars must align on all fronts for our efforts to bear fruit in victory.
Today you have presented us with numerous products and brands. If you had to pick a favorite product, what would it be?
Without a doubt, it would be the CLASSICS THE SMALL LUXURY handkerchief. In their understated elegance, handkerchiefs have the power to elevate a day. Interestingly, the handkerchief I am holding today is made primarily from hemp. Hemp has an almost magical appeal to me, both as a plant and as a material. Hemp is surprisingly easy to cultivate and its uses are many and varied. Hemp was not traditionally used to produce handkerchiefs, and it is interesting to note that hemp has a small impact on the global environment.
One of the reasons hemp is becoming a popular material is its eco-friendliness. It is a crop that requires little water and has the potential to grow in all seasons. What is your company's strategy regarding environmental awareness and how is it reflected in your products?
Without a doubt, sustainability is an extremely important concept, and failure to address the SDGs will cast a shadow over a company's identity and standing among consumers. In our industry, the narrative revolves around image and branding. As a result, our role is more than just a commercial transaction; it includes a commitment to work to protect the sanctity of the earth. Meeting these expectations is a common goal that unites our efforts.
One of our approaches to sustainable practices is to utilize one material in multiple products, as exemplified by its application in both handkerchiefs and eco bags. Furthermore, the surplus material generated during handkerchief production finds new usefulness and is brought to life in a variety of products. Our efforts extend to upcycling for customers looking to replace their handkerchiefs. Instead of wasting discarded handkerchiefs, we collect them and upcycle them, transforming them into novel creations.
What goals and ambitions do you hope to achieve as president of Nakanishi Blooming?
Interestingly, I am the fifth generation in my family to lead this business, and I hope to continue with the sixth and seventh generations in the future. As Japan's domestic market shrinks, inbound strategies are important, but capturing the "global market" will become an important theme. To this end, we will continue to develop products that are needed by society and provide enrichment and affluence through manufacturing to people around the world.
Interview conducted by Karune Walker & Antoine Azoulay