How Do You Turn 300 Years of Craft into Fashionable "Quality Living," Not Just Souvenirs? | 100 People With Ideas

The chairman of Japan's Nakagawa Masashichi Shoten shares ten years of management experience.

"It's a little awkward to put it this way, but the era that accepts our products has finally arrived. In Japan, people used to care most about housing, cars, fashion. As they came to understand what daily life is really made of, they finally recognized that this age of 'quality living' had come."

The man speaking is Jun Nakagawa, chairman of Nakagawa Masashichi Shoten, a long-established Japanese housewares store. In late May, the 300-year-old company opened pop-up stores at Eslite Bookstore in Suzhou and then at Hengshan Heji in Shanghai. On two consecutive days, Nakagawa gave talks under the title "Brand Renewal and Regional Revitalization: How a 300-Year-Old Store Stays Fresh."

After Nakagawa became the company's 13th president in 2008, Nakagawa Masashichi Shoten grew fast — from a century-old small business rooted in Kyoto, stuck in a sunset trade and struggling, into a fashionable housewares brand. It is now a fixture in many of Japan's big shopping malls, has 140,000 followers on Facebook, and has become the representative name among Japanese housewares stores; plenty of people list it as a must-visit stop on a trip to Japan. Today it runs 25 stores across Japan, with annual sales above 4.6 billion yen.

Much of the credit for that goes to the way Nakagawa runs the business.

Nakagawa Masashichi Shoten was founded in Nara in 1716, selling a hemp cloth called Nara-zarashi. Finely and densely woven by hand, it became a product supplied exclusively to the Tokugawa family in the shogunate era, and in 1898 it was designated for the imperial household. The trade flourished, serving mainly the imperial family and the samurai class. Nara-zarashi was even shown at the Paris World's Fair as an emblem of Japan's land and customs.

By the Meiji Restoration the samurai class was in decline, and demand for Nara-zarashi fell sharply with it. Its production was complicated and its price high; as Japan entered the modern era, it was gradually pushed out.

Until 2008, Nakagawa Masashichi Shoten — which had tried to reinvent itself several times — ran two divisions. The first planned, manufactured and wholesaled everything tied to the tea ceremony: woven goods such as tea cloths, ceramics such as tea bowls, lacquerware. The second made, wholesaled and retailed everyday housewares built around hemp cloth. Tea things accounted for 70 percent of the company's business, while the housewares side lost money year after year.

The trouble lay not only in strategy but in day-to-day management. In the housewares division, items that sold out were not restocked in time, while slow sellers were ordered again and again — because, the reasoning went, "these are easier to make."

All of this settled Nakagawa's mind: he would remake the family business, starting with product development and brand-building.

But inheriting the family business was not his first choice. He grew up in Nara, and as he remembers it, his father rarely told him to do anything and rarely discussed the business with him. After high school he spent a year at a cram school, then got into the law faculty at Kyoto University. He thought about becoming a lawyer, never managed it, gave up partway, and repeated two years of school along the way.

In 2000, at 25, Nakagawa joined Fujitsu in Japan, doing sales in its operations management services division. Two years in, he could see no way up, so he decided to quit and look elsewhere.

Another big company, he figured, would leave him in the same spot. He wanted a small or mid-sized firm with drive, or something outside the IT industry, but those openings were hard to find. He believed he could already carry work on his own; at a large company there was no room to do it. That was when Nakagawa Masashichi Shoten occurred to him: "If I want a higher position, isn't my own family's business the best choice?"

Looking back, Nakagawa thinks the reasoning was shallow. His father objected at the time too: "What do you know after two years of work? The outlook for this industry isn't good either. A big company and a small one are nothing alike. I won't let you come back."

Nakagawa had made up his mind, and after going back and forth with his father several times he got permission. In 2002 he was put in the first division, the hope being that he would start with the basics of doing business.

Within two weeks he saw that the second division was completely off the rails — the same problems of strategy and internal management described above.

With his father's agreement he moved to the second division and took charge of it. In the six full years before he became the company's 13th president in February 2008, the division's revenue tripled and its store count quadrupled.

He did a great deal of unglamorous work: putting production management on computers, reforming the personnel system, replacing door-to-door selling with a sales approach built around product exhibitions, adding directly run stores, setting up a business planning office.

He had also realized that the company had no brand to speak of. It had always manufactured and wholesaled, and consumers barely knew its name. "If an ordinary consumer goes to buy an appliance, they might look at Sony first, compare it with other brands, and in the end buy the Sony anyway. That's where the brand premium shows up, so we had to build up brand strength."

What makes someone want to buy something, in his view, is not the object alone; they also have to feel something for the story and the thinking behind it. Without that, even a genuinely appealing object will not win people over.

It was in those six years that he overhauled Yu Nakagawa, the sub-brand built around Japan's traditional crafts and customs, and in 2003 started Kisara, a new brand of curated Japanese-craft shops, opening Kisara's first flagship on prime ground in Omotesando, one of Tokyo's top shopping districts.

Later came Nakagawa Masashichi Shoten, a housewares brand closer to daily life — a curated shop that sold the company's own products alongside the work of craft makers from around the country.

That was perhaps where "quality living" began to serve as the guiding spirit of the family business.

The flagship store in Nara looks from the street like one of the old machiya townhouses around the Nara-machi district. Push through the noren curtain and you are in a "trendy space" where tradition meets modern style, showing off the refinement of everyday housewares and the plain, natural quality of traditional craft.

In business, Nakagawa is an amateur, with no MBA or anything like it. Summing up these years, he says it may be that his methods were never bound by settled ideas or industry convention. Many of his ideas came from reading business books and then thinking things through himself, learning from other people's thinking — but what mattered was doing them, because only then did anything really change.

"After I read, all sorts of things I have to do come to mind. I usually write them straight down in a memo and do them the next morning as soon as I get to the office. I just keep repeating that."

Take the founding of Kisara. In his first year at the company, Nakagawa noticed that most of what Japanese home-goods stores sold was made by overseas manufacturers. As the descendant of a traditional Japanese maker, this shamed him — and it also showed him an opening. "Things suited to Japan's climate and customs can be grown in our own place, so I wanted to get into that market. That is the biggest reason I founded Kisara."

The company then had a single brand, Yu Nakagawa, founded by his mother. Depending on one brand was a high risk, and he wanted to spread it.

"I wanted to take on something new. What Yu Nakagawa took 20 years to achieve, I wanted the new brand to do in three. I wanted these brands to be like gears, each growing bigger one after another, so the company could get hold of that huge gear and turn it."

In November 2003, Tokyo held the textile fair JAPANTEX. One of its curators, Kazuko Hori, who ran Home Fashion Labo, wanted Yu Nakagawa to show its products. But Nakagawa found that the fair's dates did not match the timing of Yu Nakagawa's new releases. This, he thought to himself, might be the best moment to bring out a new brand.

Kisara, the other brand, had no sales at all in its first two years. Its debut at JAPANTEX drew a good response and even praise from the organizer of a Paris home décor fair. After the show, though, the team pitched it everywhere and could not sell a single product.

After more than six months of "no sales" and "no feel for the products," the team began asking what Kisara was actually for.

In the end they decided to dig out traditional Japanese materials and techniques and put them to work in modern life, offering products that balanced function and design well. Under the concept of "a brand-new Japanese form," they developed a line designed and made with Hakone yosegi marquetry, a traditional craft.

Kisara then took part in Tokyo Designers Week, spending 5 million yen — an enormous sum for the company at the time. After the show they also realized that Kisara should not be pitched only to students and designers; it had to reach retailers.

Just at that point, Japan's Mori Building was putting up Omotesando Hills on Omotesando, designed and supervised by the architect Tadao Ando. It was drawing a great deal of attention, and its tenants were being chosen by open call.

"Here's the chance," Nakagawa thought.

Three rounds of judging cut several thousand applicant businesses down to 80. The "philosophy of making" that Kisara wanted to convey won the judges over, and it became one of the tenants of Omotesando Hills. But the day after it was selected, Nakagawa began facing one problem after another: how to pay the steep rent, how to prepare Kisara's merchandise. The opening was a year away.

He boiled the Omotesando Hills flagship down to three elements — merchandise, staff and display — and brought in three key people to handle them: Nobuhiro Yamaguchi, a designer at the Origata Design Institute, who took the store from overall concept to graphic design; Makoto Koizumi, a product and interior designer; and Reiko Takimoto, who took on the weight of running the store.

Working with Yamaguchi, Nakagawa says, his biggest gain was grasping the feeling of "seeing Nara in Tokyo."

He did not want Kisara to be an ordinary souvenir shop. He wanted a store that moved and changed, holding regular "planned exhibitions," each one approached through the theme of gifts.

He also brought in Manabu Mizuno, the designer who created Kumamon, as art director for the brands under Nakagawa Masashichi Shoten. Mizuno, in his view, has more than good ideas; he has a head for how a company is run.

Once Yu Nakagawa and Kisara were both on track, for instance, Mizuno pointed out that neither brand gave customers any sense of the company's long history and tradition. The two began planning a third brand, Nakagawa Masashichi Shoten, aiming to make anyone who thought of hemp think of Nakagawa Masashichi Shoten.

Talk about the company's direction now and many people probably find it neatly laid out, but Nakagawa knows the process was one round after another of agonizing, mistakes, wrong turns and confusion. Today, alongside Nakagawa Masashichi Shoten, Yu Nakagawa and Kisara, the company has developed a number of in-house brands including Nihon Ichi, 2&9, motta, Hanazono Jusai and Kuru.

What the in-house brands share is design sense, good manufacturing and usefulness. Nearly all of them are basic everyday things, but their shape, their materials, or both together carry an innovation that catches the eye, and it usually has something distinctly Japanese in it: chopstick rests and bookmarks shaped like Mt. Fuji, say, or small coin purses and tote bags embroidered with Nara's deer.

They break daily needs down finely — this rainy-day set, for example.

For a long time the company's center of gravity was manufacturing and wholesale. By the time Nakagawa was in charge, that model made a brand image hard to build, which was his biggest reason for pushing into retail: "delivering it into the customer's hands ourselves."

"Most people think good advertising is enough. Advertising alone can't do it. What matters most is putting care into the place where the customer and the product meet."

That means the design of the store, and the packaging too. The packaging the Origata Design Institute developed with Kisara follows a traditional gift-wrapping style that goes back to Japan's Muromachi period: the paper, the cord decoration and the shape of the wrapping all change according to what is being given, who it is for and why.

The nerve and the strategy behind reviving the family business earned Nakagawa a good name. Small craft businesses began coming to him to talk and ask for advice.

In the past, these small and mid-sized Japanese traditional-craft firms mostly concentrated on improving their own techniques and products. As brand marketing has grown more popular in recent years, they have begun to take brand management seriously too.

From 2009, with the aim of "restoring the vitality of Japan's traditional crafts," Nakagawa opened a management consulting practice, and published a run of books: How a Small Nara Shop Succeeded in Opening at Omotesando Hills, How to Create a Brand, How Small Businesses Survive and The Happy Relationship Between Management and Design.

"The material we handle is hemp," Nakagawa says, "but the thinking behind creating a brand works for all kinds of goods. I don't only want us to survive; I want the industry we're in to survive." His goal is for "the brightest star of its production region" to appear in every region, so that a hundred years from now Japan can be called "Japan, the great crafts nation."

His first client, Maruhiro, a pottery maker in Hasami, Nagasaki Prefecture, was close to bankruptcy in 2009. Working on both fronts — rebuilding the existing brand and creating a new one — Nakagawa made HASAMI, a new brand of stackable mugs in many colors. It sent the reputation of Hasami pottery up sharply and repaired Maruhiro's finances: annual sales went from 85 million yen in 2010 to 300 million yen in 2016.

Another client, the knife brand TADAFUSA, founded in 1948, had as many as 900 product types by 2011. Sorting through the line, Nakagawa cut it to seven knives, enough for ordinary use, under the concept of "the three essential knives, and the next one," and built a new brand around them: Hocho Kobo, the Kitchen Knife Studio. Its bread knife was a hit.

The bread knife is sharp. The wave along its forward edge opens the hard, crisp crust of a loaf; the finely honed edge then runs quickly through the soft bread inside. Even with a soft interior it takes off a clean, thin slice without wrecking the loaf's shape, and it leaves few crumbs on the table. It is still one of Hocho Kobo's best sellers.

He has since helped five companies start new brands. The degree of success varies, but every one of them has produced real results.

Nakagawa was recently promoted to chairman. From here he plans to put more of his energy into the consulting business, looking for more of those "brightest stars" of Japan's production regions.

The 14th president's seat, meanwhile, will go to someone outside the family — the first such attempt in 300 years. A family business, as Nakagawa sees it, has no particular advantage and may even carry great operating risk. This may be one more of his innovations.

Image credits: store.tsite.jp, Nakagawa Masashichi Shoten