Easton in Japan: good average, but no homers

It’s spring again, when throughout America one can hear the ping of aluminum bats striking baseballs, while U.S. and Japanese trade negotiators amble past Washington’s cherry blossoms, making small talk about supercomputers, communications satellites and lumber products.

What better time, then, to call Easton Aluminum Co., an aluminum bat maker which some observers have held up as an example of the excruciating ordeal awaiting U.S. exporters who seek to penetrate the Japanese market?

“We’re leaps and bounds ahead” of the company’s position at the beginning of the decade, reported Mike Danford, general manager of bat products at the Van Nuys maker of composite fastpitch softball bats , tent rods and arrow shafts.

But Easton’s experience in that market has tempered its executives’ ambitions for further penetration, for reasons that are unrelated to real or perceived trade barriers. Even what must be regarded as a successful long-term effort might not pay extravagant dividends, Danford seemed to suggest.

“We can grow a little more. We wouldn’t mind doubling. But beyond that I don’t know,” Danford said. Easton’s Japanese sales have grown to over 25,000 units in each of the past three years, including one 30,000-unit year, and another strong year is expected in 1990, he said.

Danford’s caution about the Japanese market comes as the company is scrambling to boost its output by 20 to 25 percent in order to cope with burgeoning domestic demand. Easton also is contemplating a growing market in Europe, which Danford predicted could be more important to the company than Japan in a decade. A new, proprietary alloy, EA70, has won warm acceptance from the market as the “second coming” of its earlier CU31 material, he said.

Amid that background of success, Danford’s hesitance to pursue substantial future gains in Japan might seem curious. Certainly, the bat maker has paid its dues to get where it is today – so much so that some observers have held up the company as an example of the gauntlet U.S. companies must run to penetrate that market.

In Trading Places, a 1988 account of his encounters at the negotiating table with the Japanese, Clyde V. Prestowitz recounted how a campaign launched by Easton around 1980 to win needed safety approval from Japanese government authorities required years of effort and high-level diplomatic intervention before discriminatory clauses of Japanese standards were eliminated.

“Four years later, however, the Americans still had less than 1 percent of the Japanese market. The distributors had the last laugh,” wrote Prestowitz. The former Counselor for Japan Affairs to the Secretary of Commerce now is a senior associate with the Carnegie Endowment.

The moral, as Prestowitz presented it, was that even U.S. companies that hew to a long-term strategy in Japan are likely to run into a tangle of entrenched interests and cultural and other non-tariff barriers. That was the subject of talks that continued last week in Washington on “structural impediments” to U.S. exports. Negotiators appeared to be making limited headway in the areas of supercomputers, satellites and wood products, although broader issues like Japan’s opaque distribution system still awaited a breakthrough.

Judging by Easton’s experience in the last couple of years, Prestowitz’ assessment might have been overly pessimistic. Today, Easton itself holds about 3.5 percent of the total Japanese market of 850,000 units – a healthy gain from the 1 percent U.S. share Prestowitz described.

The process of getting established “certainly was frustrating,” Danford acknowledged. Like other manufacturers, Easton eventually realized it had to find a strong domestically – in this case, Mizuno Corp., the biggest distributor in the Japanese market.

It also had to undergo further acculturation to the market – realizing, for instance, that while Americans like their aluminum bats to sound as close to a wooden bat as possible, the Japanese want theirs to sound like a bell. “We couldn’t simply take our baseball and say, here, Mizuno, here’s what you sell,” Danford said.

Even with that out of the way, however, the sheer fragmentation of the market has served to temper Easton’s ambitions. In Japan, one producer’s sales last year of 6,500 units of a new model was enough to have it considered a runaway success. One retailer even was able to win a trip to the U.S. by selling a dozen or so units of a successful model. With Easton able to supply 3.5 percent of the Japanese market with only 2.3 percent of its total output, “We produce more bats in one year than the Japanese market can consume,” Danford said.

In that environment, to reach 100,000 units in annual Japanese sales, Easton would have to develop 20 or so successful models against an array of entrenched competitors. And it would have to freshen them up with cosmetic changes every year or two. Given the marketing and manufacturing realities involved, “your likelihood of striking it rich is slim to none, and Slim’s leaving town,” Danford observed.

Easton also has encountered a level of fussiness among Japanese consumers that Danford views as extraordinary. Bats sold there are divided into 10-gram gradients – and even then, retailers keep scales on hand so customers can refine their choice further. Even with bats commanding $130 or $140, it’s tough to make money under those conditions. “It makes for small production runs that are expensive production runs,” Danford said.

By any standard, however, Easton would have to be considered a success story in exporting to Japan. Surely, Easton’s long development effort wasn’t a waste of time?

Straight ‘A’ basics: early on in the back-to-school selling season

Retailers agree that basic styles drive back-to-school (B-T-S) shoe sales, particularly in the US’ more conservative regions. Warm weather and careful spending by parents have, as of mid-August 1995, held down B-T-S sales. Market conditions in the East, West, South and Midwest are discussed. Little Capezio, Nike, New Balance and Reebok are among the popular brands on the East Coast.

Across the nation, kids are just beginning to buckle into the back-to-school mindset. While some retailers still hear the word “jellies” ringing in their ears, as sandal sales have continued mainly due to the heatwave and the appeal of the colorful plastic styles, others are just opening shipments of school shoes.

Basic, say retailers, sells running shoes with good arch support for school, especially in conservative Southern and Midwestern locales. Some brands mentioned by retailers are not traditional children’s brands, as big-footed kids move onto adult sizes in their teens. The upside of the adult size trend is that the ever-maturing tastes of girls and boys em be satiated by grown-up shoes.

Across the nation, warm weather coupled with cost-conscious parents have mounted an early roadblock for a blockbuster back-to-school season, said retailers. Few have afl their fall goods in, anticipating that most b-t-s shopping will be done in mid-to late August. Still those that are selling goods, report a variety of items doing wee, including outdoor gear from Nike and Stride Rite, as well as sneakers and rugged looks from vendors such as Skechers.

The East Coast

Brands: Little Capezio, Jumping Jacks, Nike, Reebok, New Balance, L.A. Gear

Styles: Velcro or other hook-and-loop fasteners, high-top sneakers, maryjanes, basic school oxfords in blue and red, boat shoes, suede bucks, patent party shoes for girls.

Prices:: $35-$65

Comments: The consummate cry from retailers is that parents are buying skads of sneakers, while just a few have started buying traditional school shoes. Omar Warren, salesperson, Two Steps, New York, said sales on summer shoes are just finishing up and all the new styles for b-t-s are just now coming in.

“Last week the back-to-school traffic began,” said Tony Gagliardi Jr., manager, Heathcote Bootery, Scarsdale, N.Y. “People have been cutting back on the number of shoes they’re getting,” he said, noting that hand-me-downs are coming into play as parents pinch disposable pennies. He expects his store to be busy starting this week and continuing through to the end of September when the Jewish holidays hit.

The South

Brands: Nike, Fila, Keds, Valencia and L.A. Gear

Styles: For boys, Nike’s leather GTS and Fila’s Grant Hill; for girls, Keds’ Ashley in black or brown, Valencia’s Rachel brand – specifically its Savannah and brown waxy leather Wyoming styles – Willets’ Hawk style boot, and L.A. Gear’s lighted shoes. Overall, the demand is for sneakers, conservative looks such as loafers and slipons, and oxford laceups.

Prices: $30-$50

Comments: “Right now the hottest thing we’ve got going is the Rebel boot with a high heel for girls. For boys we’re doing real good with Nike Airs,” said Juan Gomez, manager, Stride Rite, North Miami Beach, Fla.

Gretchen Jordon, owner of If the Shoe Fits, Charleston, W.Va., said “Right now there’s a boot from Jumping Jacks called the Hard Hat, a boys’ construction walking boot for plantar fasciitis for $42-$46 retail, that the girls are just cleaning the shelves on. No one’s even blinking an eye on the price.”

The Midwest

Brands: For boys, Jumping Jacks’ CL Kids; for girls, Graphique; and for both, L.A. Gear Lights. Styles: Branded sneakers; hook-and-loop fasteners; lug-heeled styles from Rebels; Skechers’ low and mid-tops in suede and canvas with chunky heels; maryjanes; lug-soled penny loafers in leather and suede; Kinderland’s boot with sock attached; Birkenstock sandals; Converse One Star; Airwalk for older kids.

Prices: $30-$70

Comments: Many Midwest store owners were too busy to comment. But the quick-talking ones said sandal sales were dying off as the mid-to end-of-summer mindset seeps over parents. As far as school shoes go, many have the same sentiment: “It’s a little early to tell,” said Dave Gotskind, owner of two-unit Gotskind Shoes, Oak Park, Ill. “The parochial schools out here still want them in fairly basic shoes – basic straps and ties are selling. And for boys, it’s that little chunkier heel that is still selling. The time of imports at $65, forget it; they don’t want to mess with that anymore.”

We do a promotion for b-t-s in August, so people start early, but some wide shoes for bunions haven’t come in yet. A lot of the industry is late in shipping,” said Beryl Bloch, co-owner, Kickers, Northbrook, Ill. “Doc Marten has some new colors, with the Analine shiny leather selling great,” she added. At Kickers, fast fashion sells, said Bloch, and price has little effect on customers. Of the high-priced Doc Martens, Bloch said: “They’re all sold out. I tried to reorder already… We’re very forward fashion for junior high to adult. We have five-year-olds, too, but our strength is in the junior market.”

The West Coast

Brands: Grendha, Nike, Stride Rite, LA Gear

Styles: Fisherman jellies from Grendha for $10.99; Nike’s Air Turmoil, $46, and Nike Air Diamond Fury, $49; Stride Rite Rimrock hiker; L.A. Gear’s L.A. Lights series for $47-$53; Stride Rite Sprint, a Velcro-hooked sneaker in black and teal, $40; Leo ballet flats, $17.99; Stride Rite Sweet Pea sandal in white, $24; Stride Rite Supercharge, a Velcro low-top for $41; Stride Rite Splashdance leather casual, $40.

Prices: $25-$45 is average

Comments: The weather, if it has delayed the fall buying period, has also prolonged the summer sales. Mike Padilla, a buyer with Brooks Shoes for Kids, Los Angeles, said, “jellies, jellies and jellies” are one of the moving items at his store. Other than that, however, he noted, “we’re in the doldrums right now. We never had to reorder [this summer].”

Others agreed. “There’s not much of a big bang of anything right now. Some of the Skechers’ items are starting to sell along with some hiking boots, but that’s about it,” said Frank Burmann of Chalk Talk Bootery, Thousand Oaks, Calif.

“I can’t even figure a trend out yet,” said Gary Manprin of Burch’s and Combs Footwear, Eugene, Ore. “We don’t know if lighted shoes, hikers or high-tops or going to be big. People are starting to look, but they aren’t buying…but then we only have about half of our fall stuff out yet.”

China goes shopping

The Chinese went on a spending spree last year, laying out a record $107-billion for consumer goods, and demand for luxury items is increasing, the Commerce Ministry said Thursday.

Retail sales rose 17 per cent in 1984 and could go up by nearly 20 per cent this year, the ministry told the New China News Agency and the newspaper China Daily.

It said luxury goods, clothing and better food were in demand.

The ministry said sales of food last year increased by 18 per cent, clothing by 16 per cent and household goods by 20 per cent.

This year refrigerators, television sets and high-protein foods are expected to be popular.

Fancy electrical goods have replaced the three status symbols of only a decade ago – bicycles,watches and manual sewing machines.

Western economists said the spending spree, while reflecting the success of an incentive-led economic boom, could also cause inflation. They said the Government would have to tread very carefully with its far- reaching economic reforms.

China has announced that during 1985 it will adjust prices to even out the distorted state- set price system, but workers’ real incomes will be protected where needed by wage increases.

This means more money will be chasing a limited number of consumer goods. Light Industry Minister Yang Bo said recently that supply might sometimes fail to meet demand.