TOKYO — It’s a busy fall morning in the center of the world’s largest city, so naturally an 11-foot-tall Maine Hunting Shoe is driving down Sotobori-dori, one of the throbbing arteries of Ginza, the city’s upscale shopping district.

“I really didn’t arrange that,” Hideki Hashiramoto, a senior manager at L.L. Bean International, tells the reporter he’s with, as his company’s Bootmobile zooms by in the direction of the Shimbashi railroad station, attracting quizzical glances from pedestrians. “We had very lucky timing!”

Indeed, the same could be said of L.L. Bean’s thriving, 26-year engagement with Japan, one of the world’s most challenging retail markets, with high rents and wages, notoriously discerning customers and fashion trends that cycle at a breakneck and often unpredictable pace. By good fortune, timely investments, and an unexpected cultural synergy between outdoorsy, practical Maine and nature-and-tradition loving Japan, the Freeport-based retailer has ridden out booms and busts to embed itself in the world’s third-largest economy.

Hideki Hashiramoto, senior manager of merchandising and creative for L.L.Bean International, left, and Mika Hashimoto, logistics coordinator for L.L. Bean International in Central Tokyo. Staff photo by Colin Woodard

At a time when L.L. Bean’s sales have plateaued in the United States – in March the company announced it was withholding annual bonuses for the first time in a decade and was shrinking its U.S. workforce by 500 workers, or 10 percent – its Japanese operations continue to grow. It opened its 28th Japanese store in eastern Tokyo last month, even as it beefed up new deals to sell its products at more Japanese retail stores. Sales continue to increase by single digits each year.

It’s the only foreign country where L.L. Bean has stores, and it’s home to more than a third of all the stores the company has on the planet. (It announced Oct. 31 that it will allow a Toronto company to own and operate L.L. Bean-branded stores in Canada starting next year.) The stores – relatively small and typically located in city centers – have slowly spread across much of the country, even as competitors like Seattle-based REI have seen setbacks. Online orders are growing, too, accounting for about half of sales here, prompting an ongoing upgrade of the software and technology that support it.

“Our brand awareness is quite high amongst our target audience, which has enabled us to have pretty predictable and sustainable sales growth over the past 25 years we’ve been in the market,” says Zane Shatzer, managing director of L.L. Bean International, the Tokyo-based subsidiary responsible for the company’s Japanese operations. “But recently we’ve been experiencing growth a little bit more than that.”

Given Japan has 127 million people and is the world’s third-largest economy, there’s no ceiling in sight, says retail analyst Neil Saunders, managing director at GlobalData, the London-based business analysis firm. “In terms of retail sales, the Japanese economy is just enormous – you could have 28 stores in Tokyo alone, because it’s so vast and there are loads of different shopping districts,” he says. “The population profile in Japan is slightly older, and a lot of those customers will find L.L. Bean appealing.”

So how did a Maine company wind up deeply engaged in a country halfway around the world, when it doesn’t even have stores in Canada? Turns out it’s because back in the late 1970s and the 1980s – when international phone calls were staggeringly expensive and the internet didn’t exist – Japanese customers found them.

SURPRISE MAIL-ORDER FLOOD

In the mid-1970s, the Japanese middle class was beginning to explore the world after decades of rigid government restrictions. An outright prohibition on leisure travel was lifted following the 1964 Tokyo Olympics, but strict limits on how much money travelers could take with them remained in place for more than a decade. But as more Japanese got to see more and more of the world, interest in foreign places, practices, and products grew, and lifestyle magazines responded with extensive features on U.S. and European products.

L.L. Bean, a company that had been making essentially the same boot in the same little town in the same manner since 1912, drew the attention of editors, store owners and individual customers, some of whom acquired copies of the U.S. catalog and began placing mail orders.

Men’s fashion magazine editor Masahiro Kogure learned of L.L. Bean in 1976, when he was 15 years old, and wanted to order. “Obtaining a catalog was difficult,” he recalled in a recent essay for the Japanese magazine PEN. “One had to purchase an international reply envelope at a central post office to request L.L. Bean to send one from their head office. It would arrive after a few months, but the products were unfamiliar and all the commentaries were in English.” As credit cards weren’t yet in general use, one had to stand in line at a bank to get a special check that could be cashed in the United States.

After long deliberation, Kogure ordered a waterproof field hunting coat, a classic design dating back to 1924. “To tell you the truth, I really wanted Maine Hunting Shoes,” he recalled. “But shoes have sizes. I knew I could not return it to America, so I chose clothing.”

The coat arrived via ship a few months later at his local post office, where he had to make a special trip to pay the tariffs and fees. But when he got it home he was delighted with its utility-minded details: a pocket for gun cartridges he’d never own; a rubberized rear pocket in which to put the ducks he’d never hunt. “There is a practical beauty – a ‘beauty for use’ in the products of L.L. Bean,” Kogure concluded. He still has the coat today.

Interest spread, especially after L.L. Bean’s Maine Hunting Shoe and canvas Boat & Tote bags went on display at American Life Shop BEAMS, a tiny, trendy American-themed store with the size and appearance of a UCLA dorm room, which opened in Tokyo’s Harajuku neighborhood in 1976. By the early 1990s, provincial high school students like Kumiko Noguchi were subscribing to the L.L. Bean catalog. “People hadn’t been wearing ‘fashionable outdoor style’ clothing in the province before,” says Noguchi, who lived in Mito, 80 miles northeast of Tokyo, and is now a researcher at Yokohama’s Meiji Gakuin University. Backpacks with the company logo were the rage, “the easiest way for teenagers to be fashionable in that province.”

By 1992, without spending a penny on marketing, the company had 130,000 Japanese customers on its catalog list.

“We were getting all these orders from people with English-language catalogs, and we realized there was a sizable market to be had,” recalls Shatzer, who helped develop a joint venture with Japanese department store chain Seiyu and consumer electronics maker Matsushita to own and operate the first L.L. Bean stores in the country.

“We are not so much pushing our way into this market,” then-president Leon Gorman told The Boston Globe on a 1992 visit to Tokyo, “as being pulled.”

BOOM, BUST, GROWTH

L.L. Bean’s arrival came amid a Japanese government push to get its workaholic citizens to reduce their hours and increase their leisure time, and at a time when there was increased interest in hiking, climbing and outdoor tourism. Business boomed.

The first joint-venture store in Tokyo’s leafy, sophisticated Jiyugaoka district drew 3,000 customers on opening day in November 1992 and beat first-year sales projections by 40 percent. Three more stores followed, along with a customer service center and a distribution system. Sales jumped tenfold between 1990 and 1995 to $210 million annually, about 20 percent of the company’s worldwide revenue.

L.L. Bean’s store at Central Tokyo’s Hibaya Chanter shopping mall, near the Imperial Palace. L.L. Bean had to come up with “Japan fit” sizes tailored for the Japanese consumer. Staff photo by Colin Woodard

“When I saw the Japan numbers spike up dramatically over budget I could just hear this voice in my head saying, ‘Danger, Danger,’ ” chief marketing officer Fran Philip recalled in Gorman’s history of the company. “If we don’t know what’s driving this and how to manage it, it’s going to come back to bite us big time, and it did.”

Japan’s economy was falling into a deepening recession, and the yen’s value was plummeting, making L.L. Bean’s imported goods 40 percent more expensive for Japanese customers. The company’s Japan sales fell by 82 percent between 1996 and 2000, with mail-order taking the steepest dive. “It was almost all we could do to offset the $172 million loss in revenue with domestic business,” Gorman later wrote, calling the Japan decline one of the most abrupt changes the company ever experienced.

In response, Gorman recalled, their joint-venture partners proposed repositioning the company as “a low-priced sportswear competitor.” Instead, L.L. Bean dissolved the partnership in 2001, created its own company, and proceeded to open its own, wholly owned stores, emphasizing the company’s heritage, durable products and commitment to customer service. The retailer introduced yen-denominated, Japanese-language catalogs, to eliminate the mystery of cost for customers as the currency fluctuated against the dollar.

The company took a careful approach, opting for smaller stores – some are as little as 400 square feet – in prominent urban and suburban shopping districts that also helped customers order additional items from the catalog. Shatzer says it “helped expose the brand and spread the risk.”

‘KEEP USING A GOOD PRODUCT’

By contrast, in 2000 Seattle-based competitor REI opened a 30,000-square-foot store in a suburban Tokyo shopping mall, complete with a 400-foot outdoor mountain bike testing trail, an indoor fireplace and climbing pinnacle, and a life-size family of bears cast in bronze. It closed after 14 months and shuttered its Japanese website.

L.L. Bean’s customer service ethos gave the retailer a leg up. Every month Japanese customers present 150 pairs of boots and pay about $80 to have them sent on a round trip to Freeport to be resoled. “Japanese generally have a ‘mottainai’ mind – to keep using a good product for a long time and not to waste,” explains Hashiramoto, standing next to a wall of tote bags at the Ginza store. “L.L. Bean products are of high quality, and customers love to keep wearing them.”

Saunders of GlobalData says these are indeed strengths. “Japanese culture is very much based on trust, and good customer service is integral to society,” he says. “When a retailer comes who has a good customer service ethic and a deep history, they can tell. That really resonates for them.”

Related Stories