The purpose of this paper is to analyze the change in the relationship between suppliers and retailers in the Japanese apparel industry from the 1970 to 1980s. In the 1970s, the Japanese apparel market entered a new phase. With each season, the price of apparel products began to fall more sharply than ever before. Both the suppliers and retailers tried to cope with the new market conditions, and in the process their relationship changed, with the large apparel suppliers integrating retail functions into their business.
Some new apparel suppliers, who had wholesaled their products mainly to specialty shops, tried to maintain the value of their products by controlling the way they were sold to consumers. World Co. Ltd. established its own sales network from the late 1960s because most big specialty shops controlled their shop floors and were reluctant to sell World's new sets of products under World's instructions. Then a number of medium-sized specialty stores were organized and managed under the guidance of World. Some smaller apparel suppliers, called Designer's and Character (DC) brand-makers, produced fashionably designed products and made a big hit in the early 1980s. Their products were sold mainly at shops under the direct management of DC brand-makers. These new apparel suppliers established their brand value and rapidly expanded in the 1970s-80s.
The large and established apparel suppliers had wholesaled their products mainly to big department stores. In the 1970s-80s, many big department stores left the management of each division and selection of products for sale in the hands of large apparel suppliers. But even these established apparel suppliers had little choice but to integrate retail functions in order to keep their transactions with department stores. They soon adopted the same strategies as the new suppliers had, and they integrated retail functions on their own initiative to enhance their production and sales systems.
In this way, the relationship between suppliers and retailers changed, and quite a few suppliers acquired retail functions, and the Japanese apparel industry continued its transformation until the early 1990s.

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