Japan sports retailers cheer as rugby shirts fly off shelves

Japan matches at the Rugby World Cup are played in front of a sea of red-and-white as fans snap up team jerseys. (Reuters)
Updated 09 October 2019

Japan sports retailers cheer as rugby shirts fly off shelves

  • Host nation success a bonanza for clothing brand Canterbury as sales leap

TOKYO: It is early morning outside the sportswear store near the Prince Chichibu Memorial Rugby Stadium and customers are already queuing to get their hands on Japan’s hottest property: A Brave Blossoms replica shirt.

The red-and-white jerseys are flying off the shelves as the Japan team continues to defy expectations at the Rugby World Cup, winning three from three and on course for a historic quarter-final.

Japan games are played in front of a sea of red-and-white shirts and sales have exceeded even the most optimistic forecasts — with 90 percent of the stock for the whole tournament already gone.

Shirts are being sold as soon as they can be replaced, said Danny Robinson, manager of the Rugby World Cup megastore in Tokyo.

“Everybody loves the Japanese jerseys. It’s much, much more than we anticipated. Every day people are waiting at the door and coming in to grab the jerseys. So it’s very difficult to keep them on the shelves. We keep bringing them in every day,” he told AFP.

However, it is not just the Japanese who are snapping up the shirts. Robinson estimates that around half of the people buying Brave Blossom jerseys are foreigners.

Jesai Knight, an Australian rugby fan, has been searching high and low for his souvenir.

“I came today to get one of those Japanese jerseys. We came here yesterday at about 9.30 in the morning, and they were sold out already at that point. And they told us to come back in the late evening today to get one,” said Knight.

The 38-year-old has also encountered an issue many foreigners living in Japan find infuriating — finding the right size for the Western build.

“I am an extra large... it was a little difficult,” he told AFP, gleefully snapping up the one XL jersey available.

The availability of Brave Blossom shirts has not been helped by a supply problem with a warehouse in Chiba, to the east of Tokyo, that was affected by Typhoon Faxai a fortnight before the tournament began.

“The warehouse actually lost electricity,” said Robinson. “So people were picking by hand with flashlights to get the products here.”

The hiccup was resolved “a long time ago” and deliveries are now coming in two or three times per week, he added.

The World Cup has been a bonanza for Canterbury, the company that produces the Brave Blossom shirts along with other rugby gear.

They had forecast sales of 200,000 throughout the tournament — which ends on Nov. 2 — and “90 percent has already been sold,” said Yoshi Katsuta, head of Rugby World Cup operations for Canterbury Japan. “We are truly sorry” that some fans cannot get their hands on a Brave Blossoms jersey, but such demand was “really difficult to predict. We expected foreigners to also buy Japan shirts but not on this scale,” he admitted.

Another feature of this World Cup — the first held in Asia and in a non-traditional rugby hotbed — is how the home fans have “adopted” teams and dutifully bought their replica jerseys.

“I’m not sure we’ve ever seen a World Cup where the home fans have supported all of the teams this well,” tournament organizer Alan Gilpin said in a recent interview.

“And the merchandising sales for replica jerseys for every team being bought by Japanese fans is brilliant.”

The famous black shirts of defending champions New Zealand have proved especially popular, not just because they are one of the tournament favorites but also because “the Japanese love the haka,” said Robinson.


INTERVIEW: Home ownership in the corona era

Updated 9 min 55 sec ago

INTERVIEW: Home ownership in the corona era

  • We want to make sure that every riyal of subsidy is used to its most effective extent

What a difference a pandemic makes. At the turn of 2020, Fabrice Susini, CEO of Saudi Real Estate Refinance Company (SRC), could look back on two years of significant progress toward the provision of affordable home ownership for the Kingdom’s aspirational young population.

Increased property ownership was one of the main aims of the plan to diversify the Saudi economy away from oil dependency, setting a target of 70 percent home ownership by 2030.

It was all going to plan. New mortgage issuance had been “staggering,” Susini said, and SRC had reached its target of facilitating 60 percent home ownership with months to spare.

“It was a very positive story,” he said, allowing him to work on the next phase of Saudi Arabia’s move toward being a home-owning economy — buying more mortgage portfolios from banks and other mortgage originators, injecting more liquidity into the housing market via domestic and international sukuk issuance, and offering new long-term fixed-rate mortgages to potential and actual home owners.

The economic lockdown that took increasing effect from March has changed the figures on which those plans were based. New mortgage applications, which has been running between SR20 million ($5.3 million) to SR50 million per week, dropped into single-digit millions as potential buyers were forced to stay at home rather than go viewing properties and took stock of their spending plans in light of the economic downturn that followed the pandemic outbreak.

“We expect to report a sharp drop for April and May. I would be surprised if the numbers remain the same,” Susini said. “But the fundamentals remain the same. It is still an underserved market, compared with the demands and needs of the young, dynamic population aspiring to home ownership. The process may be slowed by a couple of months, but the demographic is still there. There will be a slowdown but I’m sure a catch-up is coming and the forward movement will resume.”

One reason for his optimism is the action taken by the financial authorities to support the economy in its hour of need, especially the stimulus packages unveiled by the Saudi Arabian Monetary Authority (SAMA) and the Finance Ministry.

“There has been a lot of support coming through for small to medium businesses and private companies, and that will balance and smooth out the process. I don’t see a big hit coming,” he said.

Effective monitoring and control of SAMA liquidity injections would ensure they reached the SME and private sector organizations they are mainly intended to help, he added.

“I’d be very surprised if any significant proportion was not properly channeled to the private sector and SMEs,” he said.


BIO

BORN: Rome, 1964

EDUCATION: 

  • Law degree, Paris X Nanterre University, France
  • Banking and finance degree, Sciences Po, Paris
  • Master’s degree, finance, Dauphine University, Paris
  • MBA, London Business School

CAREER

  • Relationship manager, Societe Generale
  • Analyst, Bayerische Landesbank
  • Global head of securitization, BNP
  • CEO, Saudi Real Estate Refinance Company

The mortgage industry in Saudi Arabia enjoys significant subsidies from the government for its products, and while some of these have been changed in recent week, reducing subsidies to mortgages for military and some civilian personnel, he does not see this as the beginning of a trend to remove subsidies for mortgages in the broader scope of SRC’s business.

“There is no danger to mortgage subsidies that I am aware of. The budget has been carried out, the resources are there. But of course we want to make sure that every riyal of subsidy is used to its most effective extent,” Susini said.

“When we saw the situation was becoming more challenging, the SAMA package was a great help by injecting liquidity into the financial system, but we also wanted to be more proactive ourselves in the relationship we have with our borrowers and our partners. We didn’t just want to wait until people were actually in difficulties before we acted,” he added.

The result was the “forbearance” plan for borrowers, by which SRC asked its mortgage partners to offer a three-month mortgage holiday to those who felt the need, and many took up the offer. “A big majority has gone for it. We see ourselves as a ‘citizen’ company and we do not just want to rely on the authorities. We asked ourselves what we can do in terms of citizenship and public policy initiatives,” Susini said.

There seems little prospect of a cascade of mortgage defaults as long as the current policy of government support continues, and SRC and mortgage originators persist with the policy of showing patience and understanding in difficult economic circumstances.

Nonetheless, prospective home owners are facing big challenges. Not only has the lockdown made the market mechanics of home-buying more difficult, with viewings almost impossible in the light of curfews and travel restrictions, but there is also the question of whether people will hesitate over such a life-changing decision. Will they want to buy a house or apartment while the pandemic continues to rage?

Susini thinks customers will learn to prioritize their financial decisions more carefully. “You might defer the purchase of a new car, but still want to buy a home. You would direct your choice toward those things you regard as more important. Home ownership is probably regarded as more essential,” he said.

The appetite of Saudi citizens for house purchase in the new circumstances will be better judged when SAMA and other financial bodies publish official figures in the near future, he said.

With regard to the overall health of the real estate market, Susini said that he has not seen a significant fall in property prices, but underlines the fact that SRC caters mainly for the affordable segment of the market, where big falls in value are less likely. He noted that apartments have been holding their value “quite well” in comparison with bigger units like townhouses and villas.

In an era when global interest rates are falling toward zero in many parts of the world, there could be an incentive for customers to go for the long-term fixed-rate deals SRC is offering.

“We’re seeing the need for more awareness of the benefits of fixed rates. Borrowers can grasp the benefit of remortgaging at rates that are significantly lower now than they were before. It is a choice for the borrower really. They can either own their home more quickly than before, or maintain their payments on more sensible terms. It can be beneficial for them whether rates are subsidized or not,” he said.

SRC reduced its lending rates for long-term fixed mortgages last month, is first cut this year following two rate reductions in 2019. Borrowers could now take advantage of a 5 percent rate on a 25-year mortgage, Susini said.

SRC is also working hard on the digital space, with online facilitators becoming more crucial to home purchase. The company is in the early stages of a study on fintech and digital mortgage origination, and some initiative could be forthcoming by the summer, he said.

“If you can talk of a silver lining from the current situation, it is that it is accelerating the digitization of financial processes. The payment processes are already quite well developed, but the sale of processes presents more of a challenge. The health ministry has organized some innovative processes around the digital market place, and the justice ministry has done good work on the digital origination of contracts.”

The strategy of including mortgage originators in the SRC set-up will continue, and Susini is holding talks with financial and corporate firms to bring more products under its portfolio. 

SRC is owned by the Public Investment Fund, the Kingdom’s $325 billion sovereign wealth fund, so it has access to finance at the highest level. But under Susini’s stewardship there has also been a willingness to raise money in local markets via domestic sukuk issues. Two have already been launched, and a third is lined up to take place in the summer.

After that, the company will be work on an international bond offering toward the end of the year, though he declined to say how much would be raised.

“We want to ensure we can continue to finance mortgages, to have sufficient tools and channels so that no bank or finance company is stopped from offering mortgages because of issues to do with capital ratios of liquidity,” Susini said.

He viewed recent downgrades by ratings agencies of banks’ creditworthiness or prospects as a “gray cloud” over liquidity.

“We want to be ready so that primary originators of mortgages have all the tools necessary to keep operating regardless of the problems they might face,” he added.