Just a few days ago, the street and fashion world was met with the shocking sale of over 90% of A Bathing Ape and its parent company NOWHERE to Hong Kong fashion conglomerate for minute sum of less than $3 million USD. In an article by Neojaponisme‘s W. David Marx, he parlays his own personal experience with A Bathing Ape and details its subsequent up and down success over the last 10 years which ultimately led to the sale of the brand. Many have speculated as to why the brand was sold for so little, however the Wall Street Journal painted a sobering picture in regards to how I.T is now in possession of NOWHERE’s ¥2.6 billion JPY (approximately $32 million USD) in debt. Looking back at Marx’s article, he speaks about the downfall of BAPE, it’s slight resurgence thanks to Pharrell Williams, and its relationship possessed between A Bathing Ape and the Chinese market. Ultimately, the sale of such a defining piece of Japanese fashion will leave many uneasy but then again, the Japanese economy has been slumping for some time. With ageism becoming a defining factor in its lack of progression on a corporate level, there seems to be larger issues than just the sale of a popular fashion brand. Excerpts can be seen below while the full article is seen here.
One day he drew a triangle on a piece of paper with the x-axis being number of consumers and the y-axis being brand cachet. He explained, “At the top point here are very cool but low-selling brands. At the bottom of the triangle are all the mass market brands with huge sales but no cachet. The secret to A Bathing Ape and the Ura-Harajuku brands is that they keep themselves right in the middle of the triangle and don’t let themselves slip down. They have a healthy number of consumers but they make sure to never go all the way to the bottom.”
This was the general understanding about A Bathing Ape’s success: They would always use specific marketing techniques to appear underground even when selling to millions of young Japanese across the country. I understood this “brand cachet über alles” strategy to be so integral to their success that I ended my thesis with the prediction, “Once the Ura-Harajuku cultural complex disintegrates, Ape may lose its subcultural base and will be subject to the normal forces of fad market structures. [Founder] Nigo will probably stop producing Ape before this point in order to save the brand’s reputation.”
How wrong I was.
Within a year of writing that overly-confident forecast of Nigo’s future fate, the brand embarked on an extremely conspicuous tie-up campaign with soda maker Pepsi. Bape then quickly dropped all of its previously-important artificial brand barriers to mass market appeal and tried to win over anybody and everybody. When I moved back to Japan in 2003, things looked pretty grim for A Bathing Ape: The Tokyo stores were empty during weekdays, and the only consumers seemed to be the high school kids who came into the big city on weekends.
In 2001, we believed that A Bathing Ape had mastered the dynamics of the brand life-cycle pyramid so that it would never fall prey to the dangers of becoming too mass market and seeing their consumer base quickly dry up. But with the changes in 2002, the brand went on an expansion spree that could rival Uniqlo. There were Busy Work Shops in every single major and minor regional city from Kyushu to Hokkaido despite declining demand. At some point Nigo established a Bape-themed hair salon, a restaurant, an art gallery, shops for his secondary lines like Bape Kids and Baby Milo. Meanwhile they were so desperate for consumers that Nigo stopped any sort of passing attempt to be cool. Most famously, Nigo made $15 yellow Ape-head T-shirts for Nippon Television’s charity telethon 24 Hour TV in 2007, which could often be seen on the backs of housewives and elementary school kids.
So if Nigo’s 18-year old pet ape is being primarily consumed by the Chinese in its old age, it only makes sense that a Hong Kong based company — I.T Ltd. — would buy out the whole thing (including the debt). The depressing detail was the 90% equity purchase only cost the acquirers $2.8 million. Nigo has easily put more than that in his art, toy, and vintage LV trunk collection alone. This sell off of A Bathing Ape is an incredibly dramatic flame out for a company that defined the potential of Japanese independent brands to go abroad and changed the face of global fashion. It’s better than bankruptcy but not exactly a feel good denouement to an otherwise remarkable success story.
Source: Gary Warnett
Undoubtedly, many have felt the downfall of A Bathing Ape has been sometime coming, however does the sale of the brand to a Chinese-based company have any change on your outlook of the brand?