Family business

Yamagata Dantsu’s miraculous rebirth reveals the resilience of family enterprises

Yamagata Dantsu

Yamagata Dantsu’s miraculous rebirth reveals the resilience of family enterprises

When Takashi Watanabe was growing up, even as a young child he understood that his family’s company was going through a very tough period. ‘I remember adults with serious faces walking around and dad was sometimes in a bad mood,’ he recalls. ‘There was a sense of discomfort, even though I was little.’

His family’s business, Yamagata Dantsu, was founded in 1935 and is today one of the world’s finest manufacturers of impeccably high-quality, custom and handmade carpets. Its workshop in Yamanobe, Yamagata Prefecture, has created carpets for buildings including the Kabukiza Theatre and the Imperial Palace in Tokyo. Yet, in the early 2000s, during the period Takashi is remembering, it looked as though his family’s business, then called Oriental Carpet, might become a late casualty of Japan’s prolonged economic downturn. The manufacturer that had once employed over 100 workers now had fewer than 50. ‘We were at the stage where we weren’t sure if we could continue our business or even survive,’ says Takashi’s father, Hiroaki Watanabe, looking back.

Hiroaki took over the company in 2004 and from there managed to lead an astounding turnaround – a reversal of fortunes that demonstrates the true resilience and resourcefulness of family enterprises. A key turning point came in 2013, when he took the decision to rebrand the business and rename it, leaning more on the company’s and the family’s roots in Yamagata Prefecture. But this meant replacing a name and company emblem that had endured since the company’s foundation way back in 1935. ‘My mother-in-law, who was like my real mother to me, hesitated,’ says Hiroaki.

Looking back, he partly puts his boldness then down to the fact that he was something of an outsider to the carpet business. After graduating from university, Hiroaki got a sales job at Yamagata TV station and only joined the family business when he took it over at 30, when his uncle fell ill. ‘I had no knowledge of carpets whatsoever when I inherited the company,’ he explains. ‘Because I entered the company from outside, I managed to, in a way, close my eyes to the significance of changing the company name.’

The rebrand gave the company a new lease of life, stronger brand recognition outside of its home region, and the potential to find new customers further afield. At the same time, Hiroaki shifted the sales model to give more prominence to craftsmanship – although really that word is deeply inaccurate, as Yamagata Dantsu’s workshop is entirely staffed by craftswomen, ranging in age between 18 and 75. ‘We mainly have female workers, because we think female sensibilities have been the reason behind the success of creating very delicate, high-quality carpets,’ says the company president. ‘They are essential for us.’

“Designers don’t want to release their work to the market unless they are completely satisfied with the final products.”

Following the rebrand, the workshop also began working with renowned Japanese designers, such as the industrial designer Ken Kiyoyuki Okuyama and the esteemed architect Kengo Kuma, in a smart move to attract more international buyers. Again, Yamagata Dantsu’s reputation for craftsmanship helped seal these collaborations. ‘Designers don’t want to release their work to the market unless they are completely satisfied with the final products,’ says Atsushi Watanabe, Hiroaki’s eldest son and Takashi’s older brother. The upshot of all this was that the company not only survived but thrived. From a point of near collapse in the early 2000s, it reinvented itself and returned to its previous successes.

Today, however, the company is once again facing external threats, with the coronavirus pandemic chief among them. ‘Covid-19 has hit us hard,’ says Atsushi. ‘The hardest thing is that products aren’t sold as they were before. Manufacturers like us have traditionally sold products via dealers like furniture stores and department stores. If people don’t visit stores, you simply can’t sell.’

We have to increase the number of customers who will talk directly with us. This is a big step for a manufacturer like us.”

As before, though, the Watanabe family is facing these challenges head on with guile, hard work and innovation. In October, for instance, Yamagata Dantsu will open its first ever showroom, situated in Bakurocho, Tokyo. As ever, the crisis has brought a sense of clarity. ‘Our ability to communicate with customers has been insufficient,’ says Atsushi, who joined the family business in 2015. ‘We have to find a way to increase the number of customers who will talk directly with us. That is why we are opening the showroom. By doing so, you can connect with customers directly. This is a big step for a manufacturer like us.’

At the same time, the business is looking more at e-commerce, flying in the face of received wisdom which suggests that high-luxury items must be handled by customers, seen with their own eyes, before being purchased. Atsushi cites an example of a customer who bought a 6.5-million yen (€50,000) carpet online, ‘without looking at the actual thing’. Moreover, the global restrictions on movement that Covid-19 enforced have also created a positive trend for Yamagata Dantsu. ‘The pandemic has led people to direct their attention to the inner space – to the home,’ says Hiroaki, seeing the renewed focus on the home as an opportunity for future carpet sales.

Yet, as he tackles the second great crisis of his reign as the head of Yamagata Dantsu, Hiroaki Watanabe also acknowledges something far more human about what it takes to lead a family-owned enterprise. ‘I think it’s the family you need in order to make it through difficult times,’ he says. ‘Anyone can be the president when it’s easy.’

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