Winners / Selection Rationale


2009 9th Porter Prize Winner Apparel Retailer
Provides “clothes that women want to wear now” to ordinary women in their 20s and 30s on a timely basis with a short lead time

Industry Background

The Japanese apparel retail industry viewed from the perspective of the value chain can be divided into the following three categories. The first category is department stores, general merchandising stores, and apparel specialty stores that specialize in retailing; the second category designs apparel products but outsources the manufacturing; and the third category is manufacturers/retailers that vertically integrate functions ranging from planning and design to manufacturing.

The third category is SPAs (specialty store retailers of private label apparel) who design their own products but outsource manufacturing. Forever 21 belongs the first category, Point is part of the second category, and WORLD, GAP, ZARA, and H&M belong to the third category.

With regard to delivery speed, there are two categories. The first targets fashion-conscious customers, and operates a shorter production-to-delivery cycle. The second targets customers who want basic clothes, and operates a longer cycle. Point, ZARA、H&M、Forever 21, etc., are fast fashion, while Uniqlo is slow fashion.

Executive Summary

Point's strategic positioning is specialization in the "fashion casual" market segment that early majority and late majority customers want. Point quickly introduces "clothes that women want to wear now," as desired by ordinary women, and as the representative of "Yasukawa (reasonably-priced, cute design)" and "petite price (not expensive, but wonderful fashion products)," Points has gained high recognition and trust.

In addition, Point deploys a "multi-brand strategy" (owning 12 brands) that segments each brand depending on customer taste and store location. By opening stores with selected brands that match high growth locations, e.g., fashion buildings in urban areas, station buildings, and suburban shopping centers, Points is able to keep pace with changes in the distribution industry.

Points introduces "clothes that women want to wear now" with a short product development time and short product cycle. All clothes are sold at the proper price through product design with a high hit ratio, excellent inventory control, revision after product introduction, and so on. Point is the fifth-largest in sales volume in the Japanese apparel retailing industry, yet ranked top in terms of the average five-year ROIC and ROS.

Unique Value Proposition

Point's target customers are women in their twenties and thirties who belong to the early majority and late majority categories, and whose priorities are expressed as follows: "I want to enjoy reasonably-priced fashion items, and I also want to follow the trends." They can be described as "ordinary women" and "women with ordinary sensitivity," and they belong to the early majority and late majority categories as explained by the diffusion of innovation theory. Their needs include "they want to enjoy fashion everyday," "they want to wear clothes different from last year's," "they want to enjoy this year's trends," and "they want to enjoy shopping as many times as possible each month," and Point meets these needs. They want to buy new clothes every season.

Point's products are reasonably priced and set at prices that allow women to enjoy frequent shopping without worrying about their wallet. Its prices are far lower and more reasonable than global brands such as Ralph Lauren and Calvin Klein. Point's prices are 50% to 70% lower than the prices at department store. Its prices lie in the "middle price zone," which is slightly higher than the price of basic, less fashionable products. For example, a dress that sells at a department store for 12,000 yen would be sold by Point at 4,900 to 6,900 yen.

Point's products include casual, fashionable clothes and fashionable products that are moderately trendy. In short, their products are "not overly fashionable, but neither are they commonplace," meaning they are "easy-to-wear clothes" that women can wear casually everyday. (Point expresses this as "fashion casual.") In order to encourage even "ordinary women" to adopt the latest trends, Point subtly arranges its clothes with speedy introduction to catch the peak of current trends.

Point's brands place a strategic focus on a different target segment and different store location. Point operates 12 brands. "LOWRYS FARM," offering refreshing coordinates to women who lead an ordinary lifestyle, and "JEANASiS," focusing on materials and details with the appeal of "stylish fashion from the perspective of women," operate stores at station buildings and fashion buildings in downtown areas. In contrast, stores intensively operating at suburban shopping centers for brands such as "GLOBAL WORK," which incorporates basic, casual fashion that also follows seasonal trends, and "LEPSIM LOWRYS FARM," which proposes "casual, unassuming styling" with simple naturalness, target women in their 30s, who are the main customers of suburban shopping centers.

Point realizes stores where new products are displayed at short intervals, stores that encourage customers to visit repeatedly, stores where customers can enjoy selecting clothes, and stores that maintain constant freshness.

Unique Value Chain

Point's value proposition is supported by its ability to develop the right products that can be sold without discounting, introduce new products at short intervals to keep the stores fresh and fun to visit often, and maintain an appropriate amount of inventory.

Product development
Point's product planning policy is "life-size merchandising," which means producing clothes that Point's employees want to wear and not selling products that they do not understand. As Point targets ordinary women who belong to the early majority and late majority categories, customer needs are relatively easy to understand. The accuracy of Point's product planning is supported by its multi-brand strategy that clarifies the target customers, by unique qualification eligibility and selection method of buyers, by methods to understand customer needs and reflect these needs in product planning, and by the transfer of authority to buyers.

Point operates 12 brands, and it subdivides its target customers based on store location and favorite tastes in order to clarify the concept of each brand. For example, its major brand "LOWRYS FARM" emphasizes refreshing coordinates that are moderately trendy, "refreshing impression making parents comfortable with their daughters' choice of clothes," and "cuteness from the perspective of women." On the other hand, Point's semi-major brand "JEANASiS" emphasizes trends that focus on materials and details, and promotes "stylish fashion from the viewpoint of women." Point's buyers are not clothing professionals with specialized skills in design or pattern making. Instead, Point seeks buyers in the same age bracket as its target customers, buyers who are supporters of the brand and are "in-house customers," buyers who have experience as retail clerks, and buyers who possess the ability to grasp and express customer needs. All buyers are headquarters employees, but they often visit stores and attend customers, and listen to the voice of customers and the opinions of store employees. This aspect is unique to the type of work called buyers who tend to have specialized skills(※1). Customer needs are fed back quickly from store employees to the headquarters. In addition to the monthly store manager meeting, MD meeting, and area meeting, IT infrastructure such as the TV conference system has been developed, and store managers propose product ideas and evaluate samples. The last is the transfer of authority, and buyers assigned to each brand have the authority to make decisions on overall products within the range of the overall plan, such as product structure and total purchase volume based on category, e.g., inner and outer wear. In terms of the selection of seasonal themes, product planning, and order volume of each product, application and detailed reports to superiors are unnecessary.

Point is able to achieve a very short lead time for delivering products to its stores. Products are displayed in stores within 1.5 to 2 months of their conception. This is due in part to the coordination process between Point and the trading companies, developed over many years. At Point, roughly 50 buyers and trading house staffers allocated to each brand share information as if employees of the same company, and produce products in close collaboration. Surveying and grasping information on products that sell well and formulating new ideas are the responsibilities of Point's buyers, and the trading houses are mainly responsible for design sketch drawings and material selection. Point decides on the colors, designs, and order volumes, and the trading houses draft the specifications, and sample production begins very quickly. It takes only 1 to 2 weeks from product planning to sample completion. The trading houses select the best fabrics and manage the operations from production to delivery. After delivering the products to Point, with a seven-time weekly delivery system, products are then quickly delivered to stores. With a short lead time, product planning can improve the ratio to reflect customer needs. In addition, the concept of "sales completion date" that sets the expiry date for each product is introduced. Even though sales may be good, the sales period is restricted to three months at the longest and products are successively replaced.

Last is revision after product introduction. Based on a two-month merchandising period, roughly 30% of the product plan is initially introduced, with additional products introduced in 2- to 3-week intervals in order to optimize product distribution to stores. During this period, materials, colors, etc., can be flexibly revised to ensure product fit with the target customers' desire of "clothes that they want to wear now."

Outbound logistics
Point operates its three warehouses through its subsidiary, while outsourcing transport services. Thanks to an automatic replenishment system, automatic selection system, and daily delivery services to all its stores, any item sold at a store will be replaced by the delivery of an identical item to the store next day.

Point's inventory turnover ratio was 9.6 times for the term ending in February 2009. This ratio is one of the highest in the industry. By adopting layouts that minimize inventory, 594 stores across the nation are unable to hold excessive inventory. However, by delivering products, even if only one shirt, by the following day, Point can prevent the loss of opportunity resulting from the shortage of products. Products that do not sell well are shifted to Point's outlet stores at an early stage, and this prevents slow selling products from remaining at stores. Restricting seasonal leftover inventory to less than the designated ratio of sales is set as the in-house assessment index for each brand and as the key sales target.

Store operation
In order to realize attractive retail areas, the headquarters regularly compiles a visual merchandising instruction booklet that simply explains retail area layouts and product displays through photographs and sends (e-mail) the booklet to each store. Area managers visit and instruct stores under their management control, and store operation is maintained at a high level.

Marketing and sales
Point spends less on advertising. Instead, Point promotes its products through grassroots marketing, especially by gaining exposure in magazines, catalogues, and websites, and on shopping bags, as well as by hosting music events. In addition, employees can purchase products at lower prices, and store employees who attend customers and sell products wear company products. In this way, store employees play the role of "walking advertisements." Point keeps the stores fresh by putting new products in the stores often, to encourage customers to visit their stores regularly and buy products when available. To do so, it launches products at short intervals. Most of its products are replaced with new designs within a month. Point also sets a sell-by date - the date by which sales of a product will be ended, so that the same products are at the store no longer than three months. This applies not only to unsuccessful products but also to successful products.
Dealing with customers and sales at stores is based on "careful distance," and customers are not handled with excessive service or a pushy attitude. Employees always think from the customer's perspective and place emphasis on not missing the smallest of signals, for example, "I want to know about this product." The corporate message "enjoy?" has penetrated among store employees who handle customers cheerfully with a smile. Natural communication with customers not only contributes to building store patronage, but also leads to the discovery of new customer needs. In addition, work at stores is minimized to allow staff to take sufficient time to attend each customer. For example, inventory control and placing orders are infrequent tasks, and product inspection at stores is unnecessary.

The "order sheet" used when buyers place orders with suppliers is standardized and systematized for all brands. In addition to improving work efficiency, this also prevents human error such as mistaken orders, and the brand head understands and inspects the order value and order quantity by each buyer in real time.
Point constructs a stable, long-term relationship with its trading houses, but it also understands and inspects the monthly purchase volume, rate of return, and product shortage ratio of its suppliers by each brand in order to manage suppliers by not placing too much emphasis on any specific supplier and preventing abnormal fluctuations. In addition, based on each supplier, Point manages the ratio of products that cannot be introduced to stores due to defects or customer returns due to quality problems, and these concerns are passed on to the suppliers. Based on designated standards, measures that include instructing suppliers or halting business are taken. New trading houses are periodically allowed to participate in order to maintain a degree of tension with suppliers.

Human resource management
Point employs an in-house staff recruitment system. Most of the employees start off as retail assistants. After rising through the ranks, they become store managers. As store managers, they then have the option to become: 1) area managers, who manage several stores and train store managers and staff; 2) buyers, who plan and order new products; 3) visual merchandisers, who are in charge of store layout and display; or 4) press officers, who work to establish the brand image externally.

When hiring and evaluating personnel, Point emphasizes the abilities "to act independently without the fear of failure and to revise quickly."

Point assigns capable employees to important positions regardless of age. A 33-year-old woman was appointed executive managing director in 2006. The person in charge of the JEANASiS brand (with annual sales of 10.5 billion yen) is 31 years old, and the person in charge of the Heather brand (4.6 billion yen) is also 31 years old. Compared with other companies, its employees are young, but significant authority over overall brand operation is given nonetheless. Eight years ago, Point started hiring qualified part-timers as employees without asking their educational backgrounds.

Store employees represent the majority of the personnel cost in the chain store industry, and Point operates a special system to manage its personnel cost. Point not only manages the personnel cost of stores based on value, but also allocates budget for "operation hours," which is the total of monthly shift work (working hours of employees and part-time workers) by store each month. Stores set daily shifts within the range of the budget set aside for operation hours. This enables optimal staff allocation for the daily sales budget and increases the accuracy of controlling personnel costs at the same time.

Firm infrastructure
As the brand manager makes quick decisions and revisions centered on sales, purchases, and inventory data, an information system has been developed to facilitate the understanding of the status of operation of each store by brand on same day. The corporate culture of Point is to "Enjoy fashion, work and life. Enjoy through fashion." In order to provide enjoyment to customers through fashion, employees must also enjoy their work, and "it is essential for Point to be a company where its employees can boast to family and friends that they work at Point." At the "managers' meeting," where managers across the country gather, the overall policy is conveyed by Point's top executives and information is shared. This is also an opportunity to commend and praise those employees with excellent performance who have greatly contributed to the company. The reception held on the first day of the meeting is organization by store employees, much to the excitement of all participants, including top management. In-house newsletters, employee handbooks, and other materials incorporate a degree of playfulness.

Another characteristic of Point's corporate culture is the closeness that exists between the top management and the frontline. Instructions to subordinates are given quickly and directly. The functions of the headquarters are concentrated, and many meeting spaces are made available to allow quick reporting, closer contact and consultation. The top executives frequently visit stores and hold dialogue with staff employees, and they provide on-the-spot instruction if any problems are discovered. The top executives also actively participate in socialization gatherings, as well as frequently participate in major group training, and they passionately speak on their expectations of employees and on the targeted direction. As a result of these activities, the culture of "act first and revise quickly" and the cycle of sharing information, judging and acting quickly have taken root.

(※1)With regard to establishing in-house design functions, three patterns are seen in the fast fashion (short product lifecycle) strategic category. The first pattern is ZARA and H&M, each with a level of 100 in-house designers. The second pattern is Forever 21, which does not plan its own products but purchases from trading houses and manufacturers. The third pattern is Point, and buyers (not designers) plan the products. Point concentrates its management resources to "absorb customer needs, plan needs as products, and introduce products quickly to stores."

Fit among Activities

Point's reasonable price setting is a key factor in its appeal to target customers, and the reasonable price setting is attained by increasing the product turnover ratio without discounting. In order to sell all products without discounting, product planning with a high hit ratio and outstanding inventory control are essential. Product planning with a high hit ratio is supported by buyer activities to absorb customer needs, feedback from stores on customer needs, operation method and personnel system that can select excellent buyers, and so on. In dealing with customers, buyers and store staff absorbing customer needs also contribute to building store patronage. In addition, the short product cycle and small lot production contribute to inventory control as well as contribute to maintaining store freshness. (Refer to "Point's Activity System Map" at the end of this section.)


  • Instead of staff with special skills, such as designers or pattern makers, allocate employees as buyers who are the same generation as the target customers.
  • Stores without any inventory space.
  • Merchandise delivered daily to stores.
  • Introduction of a "sales expiration date." (Even for products selling well, the maximum sales period is three months, and products are replaced without question.)
  • Monitoring of the number of hours worked at stores instead of personnel expenses.

Consistency of Strategy Over Time

  • Point began as a men's apparel retailer called Fukudaya Yofukuten in 1953; it changed its business line to a men's casual wear retailer (1973) and later created a chain in the same business line (1984). In this way Fukudaya Yofukuten developed, but not without its share of problems. For example, it did not have the price-decision right when purchasing and selling national brands; they were unable to secure sufficient purchases depending on the area; their profit margin was low; and Fukudaya Yofukuten constantly faced inventory problems. In order to break through this situation, Fukudaya Yofukuten began brand development through its own planning, and one of the current strategic cores was formed.
  • The strategic cores developed after this included "fashion casual," "store brand," fresh retail area, and multi-brands.
  • "Fashion casual" meant adopting trends to its basic line. It belonged to the reasonable "middle price zone," and targeted the market that was neither department store nor mega store. The second "store brand" referred to product development based on the "stores" closest to customers. It was the development of its own brand based on the ideas of "producing clothes that we want to wear," "not selling products that we do not understand," and "life-size merchandising." These two cores have been maintained consistently since March 1992 when Fukudaya entered the ladies' casual retail industry with the current major brand "LOWRYS FARM" and began store brand operation.
  • The third core of "fresh retail areas" became essential as store brand operation through its own planning began. For store brand operation through its own planning, inaccurate product planning and order volumes can lead to the holding of large inventories. Because of this, the "Fourth Computer System" to enable timely analysis and verification of sales, inventory, and purchasing was introduced in February 1994, initiating improved accuracy of merchandising management. This effort resulted in the 30~45-day product development period and the everyday delivery system.
  • In September 1994, the new store brand called "The Works (currently Global Work)" integrating men's and ladies' fashion began. This was the beginning of the multi-brand strategy. As of the end of May 2009, 12 brands are being operated.


  • Does not deal with extremely low-priced products without fashion sense and quality or products with high absolute prices.
  • Does not have designers and pattern makers in-house.
  • Does not have its own factories. (In addition to maintaining low fixed costs, also allows flexible purchasing based on the volume of demand, production in optimal production areas depending on the circumstances at the time, and quick response to the market.)
  • Does not carry inventory at stores. There is no space to keep inventory.
  • Does not employ mass-market advertising (i.e., does not use television commercials).
  • Does not push sales at stores. Does not aim at self-service operation. (To minimize the number of store employees by arranging the store layout and adopting creative product displays.) (Attending customers and conversation with customers offer clues to planning the next products. In addition, natural communication contributes to building patronage at each store.)
  • Keep activities other than attendance on customers at minimum in stores. (To secure sufficient time for customer service, e.g., attending customers, optimally allocate store staff, and operate stores efficiently.)
  • Does not open a store smaller than a specified minimum store size. (To use different brands for stores depending on the location.)
  • Does not introduce products that do not match each brand's positioning. (To prevent sameness.)
  • Does not operate franchise stores. (To be able to implement flexible measures, e.g., feed back information obtained from communication with customers to product planning, scrap and build stores, change operating brands, and operate multiple brands in the same store.)
  • Minimizes paper-based communications such as written requests for management decisions or reports. (To emphasize direct communication to link actual feelings and experiences at stores with product planning and operation improvement.)
  • Does not conduct activities that do not fit the corporate slogan, "enjoy?"


Both the return o6n investment capital and the return on sales substantially exceed the industrial average on a consistent basis, and the difference shows a tendency to widen.

Return on invested capital (ROIC)   (Unit = percentage point)
Difference from industry averag
over 5 year period
Difference from industry average, by year
2004 2005 2006 2007 2008
52.6%P 45.0%P 49.2%P 51.0%P 52.5%P 59.0%P
Inter quartile range (IQR) = 18.3%P
Return on invested capital = Operating income / Average invested capital

Return on sales (ROS)   (Unit = percentage point)
Difference from industry average
over 5 year period
Difference from industry average, by year
2004 2005 2006 2007 2008
13.6%P 12.7%P 12.5%P 13.3%P 12.2%P 16.1%P
IQR = 4.6%P
Return on sales =Operating income / Net sales

Activity System Map

Winners PDF

22th Porter Prize Application period

From 9 May 2022 (Mon)
  to 6 June 2022 (Mon)
Please send the application form to the applicant during the period mentioned above.
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