Online Clothing Seller Brings Factory-Direct Japanese Brands to the World

Toshio Yamada and Factelier’s Mission to Revive Japan’s Struggling Apparel Factories

by Tatsuro Negishi

Today’s Japanese apparel manufacturers face a crisis for survival. Although famous for their advanced technology, domestic factories have endured years of declining revenue due to the ongoing recession and weakening yen, the recent boom in “fast fashions,” and an aging population that is spending less money on clothes. Added to this are structural pressures such as the price controls implemented by distribution firms, wholesalers, and other middlemen, which have forced industry profits into a steady decline.

As apparel makers continue shifting their manufacturing base to lower-cost overseas locations, the domestic share of Japanese clothing production has shrunk from 50% in 1990 to only 3% today.Recently, however, a new retailer named “Factelier” has risen against that tide. By selling factory-direct products via its own retail site, Factelier strives to bypass Japan’s existing, convoluted distribution channels and bring world-famous fashion brands to the public via “Made in Japan” technology.

Factelier’s strategy is to eliminate middleman distributors in order to provide increased profit for manufacturers, all while offering top-class products to consumers at one-third of their usual cost. The company offers an expansive lineup of men’s and women’s clothes: everything from shirts, cardigans, and jeans to umbrellas, socks, and leather accessories. All of its items reveal the great care taken in their production as soon as consumers pick them up. Aside from specialty items like trenchcoats, most Factelier products are priced around ¥10,000 (approximately $80).

According to company founder Toshio Yamada, Factelier’s ambition is “to sell brands direct from manufacturers to customers around the world.” But how did this upstart retailer come into being, and where did Yamada discover his ambition to shake up the structure of the Japanese apparel industry?

Defending the “National Treasure” of World-Class Manufacturing Technology How Factelier Creates Factory-Direct Brands

Yamada started Factelier in 2012, supported by crowdfunding revenue. His vision, he says, has always been simply to link factories more directly with consumers. Today, the company’s web site offers factory brand products created by twenty different Japanese manufacturers, all of whom specialize in producing globally famous high-end fashion brands. With each client factory working in its strongest area, Factelier opened a trial store last year in Ginza, the heart of Tokyo’s fashion district.

“All of partner factories devote a large part of their operations to making clothes for global brands. I want to make it easier for them to keep doing that.”

Yamada has felt close to the fashion world for as long as he can remember. He grew up in a long-established dressmaker’s shop in Kumamoto, and while studying abroad in Paris in his early twenties, he worked in a Gucci store. Around that time, one of his classmates commented that “Japan doesn’t have any ‘real’ brands.” That comment, he says, had a profound impact on his direction in life.

“In Europe, the sales model for apparel is very simple: designers create ‘masterpieces’ in their studios and then send them to clothing stores to be sold. This deep sense of loyalty and appreciation for the manufacturing process was, I thought, what my friend meant when he talked about ‘real’ brands. In Paris, I saw with my own eyes how a manufacturer can become a global brand, and I decided I wanted to do the same thing for Japanese manufacturers.”

Yamada Leaps into the Manufacturing Process with a Neverending Tour of Japan’s 400 Factories On Building “Real Value”

As fashion marketing has reacted to customer demands for “cheap and easy fashions,” high-volume factory production has flooded the market with cheap clothes whose owners can throw them away without much ceremony. In Japan, domestic manufacturers have faced increasing pressure to keep up with this breakneck production pace.

“Today,” Yamada says, “most Japanese factories face conditions where their lines are constantly full and their only objective is to keep it all moving.”

“In the end, what I’m interested in creating at Factelier is what I call ‘real’ value. Growing up in a dressmaker’s shop that had stayed in operation for 100 years, I would often ask myself how such a small store, working at the margins of massive commercial distribution channels, managed to stay in business in such a frenetic market. I realized the answer was in the value customers saw in the service my family provided. In the fashion industry, factories are the places where all the actual ‘making’ takes place. I think they’re at their best when they focus on the ‘real value’ of that service, instead of being carried along by industry fads or superficial marketing tricks. Japan already has advanced manufacturing technology that is admired all over the world. With that kind of advantage, we ought to be able to create Japanese brands that can sell anywhere.”

Yamada spent his twenties building up industry experience in apparel branding and IT, prior to launching Factelier at twenty-nine. He traveled from city to city on overnight buses, taking walking tours of over 400 factories throughout Japan and throwing himself into the manufacturing process wherever he went.

“When I started out,” he reminisces, “absolutely no one wanted to talk to me.” But despite having no operating budget and no standing in the industry, Yamada’s tenacity impressed his listeners. As he kept explaining his vision, more and more factories responded to his passion and energy. Nine months after launching Factelier’s web site, the HITOYOSHI factory — a legendary Kumamoto facility that produces dress shirts for seventy-four different international brands — signed on to produce a shirt. Factelier had arrived.

“I’m driven by a determination to create global brands with the ‘Made in Japan’ label,” Yamada says. “However, that doesn’t mean I’ll work with any factory I see. I choose my partners very carefully, and I always look at the floor layout and the quality of the products they turn out, and ask myself if the place I’m visiting shows real pride in having technology that can compete on the world stage. I’ll admit this is an inefficient management style — maybe even a tactless one. But I believe our customers will notice if the things we’re selling show ‘real value’ or not.”

Indifferent to “Being Loved by the Masses” Yamada’s Pursuit of Noren-ism

As partner factories increase and repeat customers start showing up, Yamada continues to travel around Japan in search of new factories, pouring his seemingly endless energy into the quest for new factory brands. But even today, with Factelier in the national spotlight as a business model that can change the very essence of the clothing industry, Yamada says his vision remains the same. “My only goal is to support Japanese manufacturers who use top-class technology and exhibit a can-do spirit.”

“We don’t accept returns on our products. In addition, we charge shipping fees, and we warn our customers that shipping can take as long as a week. So you might say we’re the exact opposite of most major e-commerce sites, who value efficiency and customer satisfaction above seemingly everything else. But we have absolute faith in our products, and a lot of our repeat customers demand that level of quality. That ethic of ‘the customer is always right’ — of trapping customers in ubiquitous marketing instead of selling them quality products — is what put the Japanese apparel industry in the mess it’s in today. So even if only ten percent of people support what we’re doing, we need to be the sort of business that becomes a ‘global brand’ by inspiring absolute faith from its customers.”

Yamada uses Ginza, a high-end area of Tokyo that has been an active shopping district for centuries, to explain his vision — a business philosophy he calls “noren-ism.” The word “noren” comes from the name of a type of cloth sign hung from the eaves of old-fashioned Japanese shops. Since their designs often became synonymous with the businesses they advertised, noren might be considered the first Japanese “brands.”“In the future, I think e-commerce is going to move from the type of flat service provided by big online retailers to specialized, localized, and even less efficient services that don’t fit that mold. I think that’s the direction online consumer culture is headed, and I think fashion and manufacturing are going to play a bigger and bigger role in that change. I believe our ethic of noren-ism — our ambition to build a sense of deep camaraderie with the one customer in ten who sticks with us — will be a harbinger of what’s going to happen, regardless of how, exactly, the times are going to change. Today I’m doing exactly what I’ve always dreamed of doing with my life, but I still want to keep piling up new skills, little by little. I want build to create the kind of business where today is better than yesterday, and tomorrow is better than today.”

Factelier Web site:

(photo: Daisuke Hayata translation: Michael Craig)

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