Happy accidents


POSTED: Thursday, November 19, 2009

The flood of MBA graduates that began in the 1980s led to the rise of a generation schooled in business plans and balance sheets to the point of nausea. How refreshing, then, it is to sit down with Tatsugo Yoda.

If there is a god of fortune, he or she is certainly looking after Yoda. The entrepreneur launched Aloha Rag without a plan, yet succeeded in overcoming adversity in what can only be described as happy accidents, though backed by hard work, open-mindedness and steadfast optimism.

The last serendipitous “;accident”; involved sitting down for an interview with a writer from Women's Wear Daily back in August. Yoda was asked if he was ever going to develop a clothing line for Aloha Rag. His answer was that he had no immediate plans, but it was something he was willing to try at some point in the future.

Perhaps out of misunderstanding his Japanese-accented English, when the story broke in September, it said that he was introducing a clothing line.

His phone line started ringing with requests to carry the line, so he felt compelled to produce one. By the end of October, he had a small collection in production. The AR collection for men and women, with about 11 pieces for each, will hit the boutique racks early next year, perhaps a couple of years ahead of schedule, but it marks another level of growth for the Hawaii-born company.

ALOHA RAG started 19 years ago as a small vintage boutique occupying 400 square feet in Waikiki. Yoda had grown up in Japan with the enthusiasm of a kid in a candy shop when it came to looking at clothing.

These days, he has a tendency to “;buy everything I like,”; but back then, “;it was hard to buy,”; he said. “;My parents don't give me money.”;

He moved to Chicago when he was 20, surviving by working at Japanese restaurants, before heading west to San Francisco, where his love and eye for collecting vintage clothing turned into a business of wholesaling to vintage boutiques.

After moving to Honolulu and spending eight years running his rag shop in Waikiki, he moved to his current Kapiolani Boulevard location and might have been content to continue offering vintage threads if he hadn't discovered the work of Belgian deconstructionist Martin Margiela. Rejecting perfection, Margiela refashioned vintage garments into minimalist, off-kilter forms that woke Yoda's avant-gardist-couture sensibilities.

He still speaks of Margiela with hushed reverence. “;Everything he has is very simple, but has small details that are very surprising.”;

At the time, few in Honolulu understood how a shredded T-shirt could be worth $400 to $600.

“;People asked me how come it's so expensive. People don't understand it's one-of-a-kind, very special pieces,”; Yoda said.

Undaunted by the lack of understanding and unwilling to wait for the rest of Honolulu to catch up to his aesthetic, he forged ahead and his store evolved to feature high-end American and luxury European brands, with some of the most vaunted names in fashion: Balenciaga, Lanvin, Balmain and Givenchy.

Although European luxury brands such as Chanel, Gucci and Louis Vuitton had already found homes in Waikiki and/or Ala Moana Center, Neiman Marcus had not yet opened, so smaller brands had no place in the market.

Yoda got lucky again after spotting one of Balenciaga's motorcycle bags in a magazine. “;It was very eye-catching, so I tried to contact them.”;

It turned out the company wanted to enter the Hawaii market, but was not quite ready to open a flagship boutique. They were willing to take a chance on the lone, relatively unknown boutique, and until recently, Aloha Rag had the exclusive right to market Balenciaga handbags in Honolulu. “;It's a very unusual story,”; Yoda said of the company's willingness to work with him, establishing its first shop-within-a-shop concept.

Balenciaga's success at Aloha Rag, which doubled its sales every season, cleared the way for other high-end designers—usually fearful about setting the wrong image—to work with the boutique.

YODA'S BUSINESS took another turn when his love of art led him to Art Basel, the world's biggest art market, three years ago. The economy was still going strong and Yoda said Picassos and other major art pieces were selling for millions on the first day.

“;I thought art is a good business. After that, I didn't come back to Hawaii. I thought, maybe I start an art gallery in New York City.”;

Without a track record in the Big Apple, he couldn't find any landlords willing to rent to him.

“;My dream is New York City, so I didn't want to give up.”;

Luck was on his side again when the financial crash came and retail spaces started emptying, with no takers. Just as he was about to sign the lease for his space on Broome Street, his accountant tried to give him a wake-up call, suggesting that perhaps it was the wrong time to open an art gallery.

“;I had no plan. I just signed to take the space. I don't want to give up.”;

He said he suddenly remembered that, having launched an Aloha Rag Web site, many of his customers hailed from Japan, Hong Kong and New York.

“;I thought that maybe, first, for two or three years I could sell clothing, and maybe I have customers in New York City. Maybe they would come to the store.”;

He didn't think he'd have any problem stocking his store with the same brands as his Honolulu store.


While there are few head-to-head competitors on the high end in Honolulu, in New York he was up against the likes of Saks, Bergdorf Goodman, Barney's and Bloomingdale's, plus a host of designer flagship boutiques, and many of the brands he carried limited themselves to five doors in a city.

“;I had good relationships with vendors, and they said, 'Oh congratulations, but we cannot sell to you in New York City,' even Balenciaga.”;

He had to come up with a new formula and found it in a mix of Japanese brands and designers, as well as young American designers.

In a town that prizes discovering new, unknown and up-and-coming brands, Aloha Rag became an immediate hit, hailed by the New York Times and numerous magazines and fashion blogs.

Since then, Yoda has entered into collaborations with such major brands as Converse, Nike, Jil Sander, Thakoon and Golden Goose.

“;I always want to try new things,”; Yoda said.

Aloha Rag's Honolulu boutique is at 1221 Kapiolani Blvd. The store starts its end-of-year sale on Nov. 27. Call 589-1352.