Apparel Distribution: Inter-Firm Contracting and Intra-Firm Organization

Prepared for a forthcoming book on the distribution sector in Japan, this essay introduces the distribution network in the apparel industry. We note the varying patterns of cross-market contracting and intra-firm organization in the industry, and trace the economizing logic involved. More specifically, we show how the decision at the firm level of whether to integrate wholesale, retail and production depends crucially on an informational and incentive-based logic, and how that logic is in turn driven by patterns of consumer demand.