Missing American Brands That Went Bankrupt? Japan Has A Nostalgic Surprise

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  • In recent years, many American retailers have struggled to survive for a wide variety of reasons, including competition from other brands, high real estate prices, and a change in the way consumers spent their money and went shopping.

    by Martin Danker

    Japan is not immune to these changes, but they do tend to happen far slower than in other countries. As a matter of fact, despite its international reputation as a technological nation, Japan tends to hold dear to tradition (look no further to the mighty importance of business cards), and sometimes to technologies and practices that are outdated. During the COVID-19 pandemic, one of these outdated practices that started to receive nationwide attention was that of the use of hanko and jitsuin, the seals that are used across the country instead of signatures. As a result of their widespread and traditional usage, many employees were unable to telework because they simply couldn’t conduct business regularly without hanko and jitsuin to stamp documents.

    As of technologies that have been rendered obsolete across the world but remain alive in Japan, one can always point at faxes and flip-phones; and while flip-phones’ popularity has finally started to vanish, we will always have this article from Engaged properly and brilliantly titled: Japan: the country where flip-phones refuse to die.

    While some expats and visitors might find themselves surprised at the sight of faxes and flip-phones, Japan has another surprise in store: brands that have been struggling or have already disappeared in the United States.

    Thanks to factors like strong brand recognition, the high density of Japanese cities, companies’ different and more successful business strategies, and Japanese consumers’ high perceptions of various American names have helped some brands flourish in Japan even when they completely disappeared in the United States.

    Dean and Deluca

    While Dean and Deluca as a brand has not yet disappeared in the United States, their many financial troubles and Chapter 11 bankruptcy filing, mixed with the post-effects of the COVID-19 pandemic, paint a very different complicated picture for the American chain’s dreams of reopening their locations.
    As of May, 2020, their website lists only two locations left in the United States: a cafe and a market in Honolulu.

    In Japan, Dean and Deluca have no real grocery stores, instead focusing on upscale cafes that also sell some products. Some of the bigger Dean and Deluca locations, like the one at Shinagawa Station, do have a big section dedicated to retail and the sale of prepared food, cheeses, and hams like a delicatessen.

    Nevertheless, Dean and Deluca have found incredible success in Japan due to their food and drinks. Many business people tend to frequent the Dean and Deluca cafes located close to their office to have lunch, business meetings, and interviews, making Dean and Deluca a popular place for “power lunches”.

    Dean and Deluca also offers a great beverage selection, from coffee to popular seasonal drinks. This has turned Dean and Deluca into an upscale cafe that can easily compete with coffee shop giants like Starbucks, Tully’s, and Dotour.

    Barneys New York

    Barneys New York was a staple in the fashion industry for decades, bringing such names as Giorgio Armani and Comme des Garçons to American consumers.

    Barneys New York relationship with Japan dates back to 1989 when Barneys formed a holding company with Isetan, after that, the first Japanese store, under license, opened in Shinjuku, Tokyo in 1990. The agreement also made it possible for Barneys New York to open smaller stores across the United States.

    The history between Barneys and Isetan can be described as nothing but messy thanks to several actions the Pressman family (the former owners of Barneys New York) took without Isetan’s knowledge, particularly. Naturally, Isetan considered the actions a breach of trust. What followed was a nasty dispute and court battle when in January 1996, Barneys filed for Chapter 11 Bankruptcy as a strategic move to gain maximum concessions during the company’s dispute with Isetan. The following day, Isetan sued Barneys New York’s owners Robert Pressman and Gene Pressman, seeking the return of approximately $168 million. Isetan was furious, stating that the management at Barneys was not faithful and trustworthy; one of the reasons being that Barneys had showed Isetan each year that they were profitable, but in 1995 Barneys suddenly disclosed to Isetan that the company had been in the red.

    The developments in the upcoming decade saw both Isetan and Barneys experience two different journeys. In 2006, Isetan sold Barneys Japan to Sumitomo Corporation. In August 2007, Isetan and Mitsukoshi, another of Japan’s most famous luxury department stores, merged, creating Isetan Mitsukoshi Holdings. In 2015, Seven & i Holdings, which already owned 49.99% of Barneys Japan, bought the rest of the company and made it a wholly owned subsidiary. For its part, Barneys New York filed for bankruptcy again in 2019, but this time it was for good. Authentic Brands Group’s bid succeeded, officially acquiring Barneys New York for $271.4 million. After that was done, Authentic Brands Group decided to close all Barneys stores and license the brand’s intellectual property rights to Saks Fifth Avenue.

    Therefore, Barneys New York has ceased to exist in the United States, while Barneys New York (Barneys Japan) flourishes under the Seven & i Holdings umbrella with six gorgeous main stores and six outlet stores. In case you are curious, Seven & i Holdings is a true Japanese giant that owns various subsidiaries including 7-Eleven, LOFT, Ito-Yokado, and the Sogo and Seibu department stores.

    Barneys New York offers a very different experience in Japan than what it offered in the United States. The business model has made Barneys Japan a specialty store rather than an enormous department store. While department stores like Isetan, Mitsukoshi, Seibu, and Hankyu Men’s offer floors and floors of retail and some even have sections underground that sell food, desserts, and wines, Barneys Japan focuses on a more intimate experience as shoppers try the high quality goods the stores sell.

    Additionally, Barneys Japan introduced cafes where shoppers can sit in and relax after a good day of shopping.

    Perhaps the best thing about Barneys Japan is that the stores also elevate the service one was supposed to receive at Barneys New York. While Barneys New York was notorious for the low level of service some customers received, not to mention the horrendous profiling controversies, the stores in Japan are not stained by such kinds of behavior.

    Tower Records

    Do you remember Tower Records? The place was an institution that brought records, CDs, DVDs, and similar products to consumers for decades. At its height, Tower Records came to define the music industry, with the likes of Bruce Springsteen and Elton John being devoted fans and customers.

    It shouldn’t come as a surprise to know that Tower Records suffered the same fate as the likes of Blockbuster and Hollywood Video, and now exists as an online music store… but not in Japan.

    The first Tower Records store in Japan opened in Sapporo in 1980 before expanding nationwide. Tower Records is a powerhouse in the Japanese market, having a very successful campaign called “No Music, No Life” (which has served as the company’s slogan for decades ), and even creating their own record label.

    The Shibuya flagship store is a must for any visitor who loves music, and the many aisles of CDs and memorabilia will certainly bring back memories to those who miss the days when Tower Records ruled the retail music industry in the United States.

    Toys “R” Us

    Before the days when Amazon, eBay, and other online stores changed the way people purchased goods, Toys “R” Us was a mecca for any kid and collector. The store had a spectacular selection of toys that made locals and tourists flock inside.

    To some kids who had never seen a Toys “R” Us, entering for the first time evoked a similar feeling as a first trip to Disney World. In other words: it was absolutely magical. Who could ever forget the brand’s crown jewel? The Toys “R” Us in Times Square. That location had spectacularly displays, including an out-of-this-world Jurassic Park installation:

    I mean:

    As years went by, Toys “R” Us began to shrink due to competition and changes in consumer spending; and before its bankruptcy the stores were a dim reflection of their former glory.

    Toys “R” Us entered the Japanese market in 1989 as part of a joint venture with McDonald’s Japan, and one of the company’s greatest feats occurred in December 1992, when the newly opened Sagamihara Store reported the highest daily sales of any Toys “R” Us store worldwide.

    With more than 160 stores in the country (which include Babies “R” Us), Toys “R” Us dominates the toy market in Japan, and the store’s success from its early years is considered astonishing because of how difficult it was for foreign brands to enter the Japanese market at a time when consumers had to pay some of the highest prices in the world and when regulations were far more terrifying than they are today. Sadly, the experience in Japan does not compare to what one could have found when going to the Toys “R” Us locations in Times Square or Orlando.

    In fact, Toys “R” Us has a very strong presence in Asia, so despite the number of stores in Canada and Europe going down, Toys “R” Us can be found in plenty of countries like China, South Korea, Malaysia, and the Philippines.

    After emerging from bankruptcy, Toys “R” Us came back as Tru Kids, Inc., which owns both Toys “R” Us and Babies “R” Us. However, there are currently only two stores in the U.S: one in Texas, and one in New Jersey.

    Honorable Mention: Lawson

    Lawsson is one of Japan’s three largest convenience store chains, alongside 7-Eleven and Family Mart, making the store a very important part of many residents’ and tourists’ lives alike. Funny enough, Lawson’s history does not begin in Japan, but rather in the United States.

    The beloved Lawson convenience store traces its roots to Cuyahoga Falls, Ohio, where the first store opened in 1939 after “J.J.” Lawson decided he needed a place to sell his milk. That’s why in its beginnings, Lawson was actually called The Lawson Milk Company, and operated stores primarily in Ohio.

    Understanding Lawson’s origins explains everything one needs to know about the store’s logo, which features a milk can.

    Naturally, Lawson started to expand in the United States, becoming a real convenience store, and in 1959 Lawson was sold to Consolidated Foods (now named Sara Lee Corporation). In 1974 Consolidated Foods signed a contract with Daiei, a Japanese supermarket chain, bringing the first Lawson convenience store to Japan as one of Daiei’s subsidiaries.

    As years went by, Lawson’s name in the United States was changed to Dairy Mart before Alimentation Couche-Tard bought Dairy Mart and changed the stores to Circle K, effectively ending Lawson’s presence in the United States.

    Across the Pacific, the story was completely different as Lawson continued to expand across Japan. Lawson Co., Ltd., headquartered in Shinagawa, Tokyo, does no longer have any relationship with Daiei. What’s more, there are over 14,400 Lawson convenience stores in Japan, and the company owns other stores like Natural Lawson and Seijo Ishii.

    Lawson Co., Ltd. has also expanded overseas, and now has a presence in countries like China and Thailand. What’s particularly interesting is that Lawson has returned to the United States, being present in 2 hotels in Hawaii (a great choice since Hawaii is a very important destination among Japanese tourists).

    In all fairness, Lawson never went bankrupt in the United States, which is why it’s listed as an honorable mention. Nevertheless, the convenience store’s history is quite fascinating.

    Conclusion

    Remember when we talked about the article that said that Japan was the place where flip-phones came to die? Something similar can be said about American stores that at one point were considered to be icons. Perhaps the funniest thing about this story is that many of these names that vanished from the American landscape are not only still present in Japan, but also flourishing.

    *Featured Image by deandeluca_jp (DEAN & DELUCA JAPAN 公式) on Instagram
    : deandeluca_jp/