A Bathing Ape Takes a Final Bath

In Summer 2000 I came back to Tokyo to research the popular Ura-Harajuku street fashion brand A Bathing Ape for my senior thesis. My makeshift mentor was an editor of Hot Dog Press — a men’s lifestyle magazine from Kodansha that ceased publication in 2003 — who had covered the Fujiwara Hiroshi family of brands over the years.

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.

The brand hit their second wind, however, when Nigo met Pharrell Williams, and for about three years in the mid-2000s, Bape became one of the hottest brands on earth — this time framed as an integral part of the American hip hop scene. Nigo made one of the least plausible yet most accepted visual transformations in recent history, dropping the Cornelius-lookalike routine to slot in gold teeth and wayward baseball caps (or worse, a skull cap).

Despite this international expansion, Bape’s days at the top of the Japanese brand hierarchy were long over. The Ape head had become too ubiquitous, and the brand was spread way too thin. When the U.S. bubble for Bape burst around 2008, parent company Nowhere started heading towards serious financial insolvency. Now we have learned that Nowhere — A Bathing Ape’s parent company — had been suffering massive losses. The Wall Street Journal states that fiscal year 2009 ended with ¥267.4 million and 2010 ended with ¥119 million in the red. Nowhere also has debt in the range of ¥2.6 billion.

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.

In 2009 Nigo — seemingly bored with his crumbling empire — stepped down as CEO of his own company, giving the reigns to an ex-World executive. (Perhaps not so coincidentally World also bought up former Ura-Harajuku brand Real Mad Hectic.) Nigo lately has been working on not particularly significant side projects such as “Human Made” and suit brand “Mr.Bathing Ape.” Meanwhile things were not looking good for Nowhere post-Nigo: the L.A. store closed in 2010.

Bape did, however, have one remaining ace in the pocket: massive support from consumers in Greater China especially Hong Kong and Taiwan. Hong Kong in particular had always been attracted to the Fujiwara Hiroshi empire of Japanese street brands, and since 1999, HKers had been intimately familiar with A Bathing Ape. That year Nigo teamed up with locals Eric Kot and Jan Lamb to open an Ape boutique on the 17th floor of an office building. The result was the most draconian shopping policy in Ape history. Potential shoppers had to apply to become Busy Work Shop members, which required a Hong Kong passport. This excluded all non-Hong Kong residents from using the shop. Moreover the applications would be sent to Japan for ultimate approval. Once customers were approved as members, they would have to make an appointment before being able to enter the store — no casual walk-ins allowed. The image, however strict, matched perfectly with the super-exclusivity of the original Japanese strategy.

Although the first Busy Work Shop Hong Kong was never a huge phenomenon in itself, the brand’s sudden presence in the Chinese language media put A Bathing Ape in the wider Asian pantheon of hot labels. The Baby Milo shirts in particular were a huge sensation in Hong Kong, making the evening news as a noteworthy youth trend. While Japanese lost interest, the rise of a new youth consumer in East Asia balanced things out for brands. Anecdotally-speaking, most shoppers I have seen inside or near A Bathing Ape in Harajuku have appeared to be from Greater China. Nigo has also directly targeted fans in these locations with a Taipei store in 2005 and an enormous new store in Hong Kong in 2006. Beijing and Shanghai opened in 2010.

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.

But just as Japanese apparel companies like Onward and Renown bought up heritage Anglo brands like J. Press and Aquascutum in the ’80s and ’90s, Chinese companies are likely to be the future bulk purchasers of Japanese brands. The Japanese fashion ecosystem relies more and more on the flow of East Asian cash, and the desperate fire sale of Nowhere is likely the opening paragraph to an entirely new chapter of Japanese cultural history.

W. David MARX
February 2, 2011

W. David Marx (Marxy) — Tokyo-based writer and musician — is the founder and chief editor of Néojaponisme.

58 Responses

  1. aza Says:

    it is another reason nigo created an image of hiphopish style in the NY store with workers who are up and coming arits and actors such a kid cudi who used to work at the NY store and now has background support from within the us ape division to wear a bape items for promotion. I believe they aided in his stardom as well with bapes connection to the music business

  2. charlie flash Says:

    Historically speaking, this really shouldnt be too much of a surprise, to anyone !
    people flipping over the sale price… ummm you obviously all missed the fact that IT DID take all debts also ! !

    What nigo did was fantastic no doubt! BUT…. the idea that cool can live for ever can only really be applied to ‘things’ that arnt based on the NOW… Items that are normally labeled timeless are so because they break the codes of now-ness ! this is cool RIGHT NOW isnt cool tomorrow… everyone knows that… some hold on hoping… but until your era goes through a recycle of cool stage…. it aint cool after the used by date.

    BAPE…. WAS cool. It was cool when it was hard to get. It was cool when you copped a numbered T and it was cool when it was growing. The ideas were cool. The execution was cool.
    What wasnt cool and again, realistically, what has caused its downfall in the markets we know is the the “YELLING”…. YOU ARE NOT COOL IF YOU ARE NOT BAPE……… That mixed with appauling in store attitudes (in EVERY SINGLE walk in store across the globe) has in a nut shell all added to what was ultimately inevitable.

    Nigo prancing around buying and showing off his personal wealth…. that got boring.. ripping off other major brands … again…got a bit boring…. having other so called “now coolers” hand in hand… well… they fall…you fall… Kanye… hes def NOT cool. Pharrell….his time of cool is also on the whine….
    and again and again and again… how many times does the consumer need to be told…. THIS IS COOL….
    so really…. is any of this that surprising to anyone in the biz or anyone whos followed streetwear culture for the last 20+ years ?
    Fact is… most labels specializing in a “culture”…. eventually go under or get consumed by the larger ! thats the nature of the beast.

    what will be interesting to see is how BAPE moves forward from this. How will IT move forward…. can BAPE be cool without NIGO, and or can it even be COOL AGAIN?……

    The net is as powerful or is as reflective as general moods and tastes….
    “kids in asia” wondering whether they really want to buy into a label that has been sunk in the “real world” … that will be interesting to see.
    As will NIGO’s next move….. because all said and done…BAPE’s cool date may have expired but NIGO’s IDEAS have always been a few steps ahead.
    the man’s personal wealth has not been hammered. maybe halted for now… but you know… a private sale here and there and before you know it he’ll be back ! that is fact !

  3. pinkmenace Says:

    im just worried of wad is to become of the brand. change in quality? for the good or bad? how bout exclusivity? would I.T open more stores and totally wipe of its exclusivity? and how bout the design?

    and yes, i would love to noe if this has any effect on bbc icecream?

  4. A Bathing Ape RIP? | The Style Raconteur Says:

    […] 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. Excerpts can be seen below while the full article is seen here. […]

  5. Sudeep Says:

    Great article… And a sad story to boot.

    Sure brands go from being cool to uncool and they have their unique idiosyncrasies, but the root of the problem here seems to be that Nigo just wasted all the money!

    To think that the entire BAPE empire was sold for $2.8M is insane, yes they bought the debt too, but how someone gets to the stage that all their wealth, fame and talent disappears like this is insane.

    As the article says, Nigo’s art collection would be worth more than the price paid.


  6. Rolo Says:

    He’s said it himself, he was just really bad at business. He clearly spent profit as if it was his wage and spent years working towards economies of scale to increase the value of that ‘pay’ rather than logical re-investment into the company.

    To all those saying that ‘this is normal, a brand can only be cool for a certain period’ etc…come on now…Some of my favourite brands have and will be around for ages, and it’s those brands with a strong heritage that people, especially in fashion, love.

    With better management Bape could’ve retained all of the elements that gave it initial success, if your core consumer stops wearing the product, the idea is that you make an effort to understand ‘why’ and then sort it. Or if you care so much about the brand as it is, end it and start something new.

    But I’m talking business here, not life. He’s human, not perfect, and has made lots and lots of money, and had lots and lots of fun. He’s made sure he has all the nice things and friends that he has ever wanted, and a nice bank balance to keep him going. I don’t think running an efficient business that looks after shareholders interests etc etc has ever been his concern.
    And now he’s a creative director, employed by a massive company, which will also be fun.

    So for me, in a nutshell, none of this is confusing – it’s just a kind of interesting behind-the-scenes moment.

    Also, I don’t know if the fact that the Soho Bape store looks different is a ‘bad’ thing? And I don’t know if it will even close. A change of ownership doesn’t mean that it has to.

    This article was really intersting and it’s also been good to read all of the comments. Nigo sure does know how to create a buzz!


  7. Elvis Says:

    I work in a boutique that sells Billionaire Boys Club and we have just received our first drop of the season, it says made in China which is a first for a company that has prided itself on being made in Japan. So do you think that Nigo sold the company a couple of seasons ago when these goods got produced? It seems a bit of a coincidence that their clothing is now made in China.

  8. W. David MARX Says:

    You can’t run one of the most successful Japanese brands in history and be “bad at business.” What ridiculous, after-the-fact self-deprecation. Maybe he got bad at business. But he had a good run.