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Excellent piece in BoF re: Abercrombie's attempt to launch in Japan. Marx goes over all the key areas (so many!) where Abercrombie is failing in Japan.

TOKYO, Japan -- After several years of "will they or won't they" speculation, American casual fashion retailer Abercrombie & Fitch finally opened its first retail store in Japan this past December. The 11-story shop in Tokyo's upscale Ginza neighbourhood is just steps away from Uniqlo's flagship store and Swedish fast fashion brand H&M.

As with every big retail opening in Tokyo, the first day of sales saw long lines of customers and swift business. The rumoured haul: ¥50 million (or about $550,000). Even without the benefit of an opening party or major press event, Abercrombie was able to rely on a small group of Japanese fans who had previously bought the brand's products as souvenirs on trips to Hawaii or the continental United States.

But the big question is, will Abercrombie be able to win over new fans in Japan and replicate the unbelievably successful Japanese market entries of other mass fashion brands?

So far, the signs do not look good.

If you're not reading Evan Osnos' "Letter from China" blog in the New Yorker, you should be.

For much of the past two decades, the obstacles facing foreign entrepreneurs have been structural: bureaucratic delays, restrictions on moving foreign currency, and so on. But in my conversations with foreign business people these days, the current malaise centers on a less concrete--and, thus, fixable--sense of obstruction. The concern these days is not about the vagaries of what was once called the Iron Rooster, but about the reality of a canny, powerful, well-equipped, urbane counterpart in the global economy, which is beginning to express its own beliefs about fair trade and free flow of information. That, I'm afraid, is a far more difficult gap to bridge.

And the Time piece that is improperly linked to from Evan's blog post is this one (also worth reading):

In my more than two decades in China, I have seldom seen the foreign business community more angry and disillusioned than it is today. Such sentiment goes beyond the Internet censorship and cyberspying that led to Google's Jan. 12 threat to bail out of China, or the clash of values (freedom vs. control) implied by the Google case. It is about the perception that antiforeign attitudes and policies in China have been growing and hardening since the global economic crisis pushed the U.S. and Europe into a tailspin and launched China to its very uncomfortable stardom on the world stage.

The China Fix - TIME "The China Fix"

Two unrelated news pieces from Business Week today caught my eye:

Japan Is Best Investment Idea for 2010, Wien Says

Japanese stocks may be the best bet among the world's biggest markets in 2010 as the economy improves, according to Blackstone Group LP's Byron Wien.

The Topix Index, which posted the lowest return among benchmark guagues in the 20 largest stock markets in 2009, has risen the most this year, gaining 4.1 percent. Companies are projected to turn profitable in 2010 after producing a combined loss of 40 yen per share in the past 12 months, according to data compiled by Bloomberg.

"I would definitely start buying now," Wien, 76, vice chairman of Blackstone Advisory Services and the former chief market strategist for hedge fund Pequot Capital Management Inc., told Bloomberg Radio. "Everybody who could sell Japan has sold Japan. Everybody is on one side of the boat. My view is that we have a pretty good chance of having this one be the best of the major industrialized markets. It's not a boom, but things are getting better."

Traders are opening funds after the industry posted its best returns in a decade last year, gaining 20 percent, according to Hedge Fund Research Inc. Assets may rise to $1.75 trillion by the end of 2010, according to Morgan Stanley estimates.
...
Aristarc will invest in stocks using a market-neutral strategy that bets on, and against, companies in the same industry. Feldschuh's strategy at FrontPoint returned 14 percent in 2008 and 19 percent in 2007, according to the marketing materials.

Let's hope the Nikkei turns around this year. NO DOUBLE DIP!

One day before US Secretary of State, Hillary Clinton's speech on Internet freedom, the New America Foundation has hosted a panel discussion on Chinese censorship of the Internet with Alex Ross of the State Department, Rebecca MacKinnon of the Open Society Institute, Tim Wu of Columbia University, and Evgeny Morozov of Georgetown University. The discussion was moderated by James Fallows of The Atlantic Monthly.

Authority, Meet Technology: Will China's Great Firewall Hold?

For those who prefer the audio, you can download the MP3 Recording of This Event.

Richard Katz of The Oriental Economist provides a counter-argument to the mainstream worries about Japanese government debt. I'm leaning more towards Katz but am looking for more guidance.

Now Is Not the Time to Fret About Tokyo's Debts

Last week Hiroko Tabuchi's article in the NYT, Rising Debt a Threat to Japanese Economy, painted a pretty grim picture of Japan's significant debt and what that could mean to the future of Japan. What many may not have seen is Paul Krugman's comment on his blog, Is Japan on the fiscal brink?, where he basically says that the market does not see any problem in Japanese bond yields being low- that the market expects this. If you were concerned by Tabuchi's article, which is more speculative, it's important to look at the market itself, as Krugman does, to see that that this issue is not much of an issue at present.

After the GLOCOM event on Oct. 20th, I'm headed to the Good Ideas Salon, Tokyo, where three people I know are speaking. I've known Peter Rojas since the early days of Gizmodo, where I was an early contributor. Danny is also a good friend as is Mark Dytham. Should be an interesting evening.

Just a quick note to mention that I will be attending the GLOCOM Forum 2009 event, as Kevin Werbach (who I know via Jerry Michalski) is speaking.

For those of you who are watching or reading about the upcoming election in Japan, please ignore that crazy Op-Ed, A New Path for Japan, in the FREAKING New York Times by DPJ leader Hatoyama. If you try to read it, you'll see it makes no sense because it was written in Japanese and not intended to be translated or as MTC says:

"Just-ignore-what-the-essay-says-it-is-only-meant-for-domestic-consumption-and-contains-a-lot-of-code-phrases-that can only be understood-in-the-context-of-Japanese-election-propaganda-and-in-Japan-nobody-believes-anything-printed-especially-when-the-author's-stringing-together-of-platitudinous-utterances-makes-him-sound-like-he-is-stoned"

Instead, read Tobias Harris' piece in Foreign Policy: Japan's New Shadow Shogun. Silly title, but I'm sure Tobias didn't write that.

Now, Yukio Hatoyama is the DPJ's leader and the presumptive prime minister. But [Ichiro] Ozawa remains kingmaker: the DPJ's chief election strategist with the fealty of a band of party members in the Diet who could ultimately number up to 100. Thus, he and his supporters will be critical to the success or failure of a DPJ government, especially leading up to Japan's upper house elections next summer.

I look forward to seeing the results of this election next week.

Lewis is so funny and kudos to Bloomberg for running this:

Bashing Goldman Sachs Is Simply a Game for Fools: Michael Lewis

Rumor No. 5: Goldman Sachs is “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Those words are of course taken from a recent issue of Rolling Stone magazine and they are transparently false.

For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident. And nothing that happens at Goldman Sachs -- nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does --ever happens by accident.

(Michael Lewis is a columnist for Bloomberg News and the author of “Liar’s Poker,” “Moneyball” and “The Blind Side,” soon to be a major motion picture. The opinions expressed are his own.)