Japanese bow to Mr Smith

PAUL SMITH can slip through his shop in Covent Garden virtually unnoticed. If he's spotted in one of his Tokyo stores, chaos ensues. Once the word has spread, people pour in brandishing T-shirts, books, motorcycle helmets - anything for him to sign. These personal appearances help the best-known foreign designer in Japan to shift pounds 4m of goods through his main Tokyo branch alone.

Twenty-five years into his business Smith has probably the most saleable name in British fashion. The UK industry is still tiny, though. Annual sales of British designer clothing are worth pounds 200m. This barely registers against the billions that names such as Calvin Klein, Ralph Lauren, Armani and Chanel turn over.

Smith's problem is not how to get bigger, however, it is how to maintain personal control over his sprawling fashion empire. America is the obvious prize for any expansionist company, but Smith has already shut a pounds 9m operation there because he did not think licence-holders were using his brand the right way. "I must be mad, but I just stopped it because I did not like it."

While Smith may be little known in his native country, his image and name are household words in Japan. He is now deciding how to capitalise on it. "We will expand," he says. "We are aggressively trying to look at opportunities all the time. But it's not about more and more money - it's about having a great day and enjoying life."

Smith 's arrival in Japan was a low-key affair. He was invited over in 1984 by the Japanese company C Itoh, which was interested in getting a licence to sell his label. "I never went there thinking I was going to have a huge business," he says. "I went there because I was invited and I just thought 'I love this'." There is now a licensed operation of more than 150 shops.

Japan contributes three-quarters of the annual pounds 102m worldwide sales of Paul Smith labels. All the company's lines sell in Japan: the top-end Paul Smith collection, the jeans, Paul Smith for Women, children's wear and the new R Newbold workwear.

Where Smith differs from many foreign designers in Japan is in the personal control he holds over the operation. He is currently on his 39th visit to the country. This week he has been showing his new collection to sales reps and shop managers. There have been seminars on display detailing everything down to how to arrange the socks. All new staff watch a video chronicling his life and setting out company philosophy. He says this way they get real Paul Smith. "I worked very hard at it so every glass they drank out of, every doormat, every coat-hanger I was personally involved with choosing."

Smith sells to Japanese teenagers, executives, arts and media folk - but perhaps most noticeably to the young salary-men. These are the 20- year-olds who come in with their mothers to buy their first business suit. For the novice salary-man with a life of conformity ahead, the Paul Smith image of "classic with a twist" appeals.

Walk into the main Paul Smith shop in Tokyo and you could just as easily be in Covent Garden. The antique wooden fittings are imported from England. There are brass fixtures and soft lights. The only Japanese is written on the fire extinguisher. Old Beano comics, Bakelite radios and snowstorm ornaments vie with pounds 600 suits for expensive floorspace. This quirkiness is a vital part of the carefully controlled image Smith is selling.

At the Nottingham headquarters two of his most avid collectors of junk and ephemera, Art and Leslie Bates, unpack their latest haul. Boxes of old football annuals, coronation souvenirs and plastic flamenco dancers are laid out on trestle tables. Smith is delighted. "We'll take the lot. Football goes down well in Japan, put that down for Tokyo. They love comics, especially the Beano."

Smith admits his company is reliant on its Japanese operation. "In my opinion it's far too weighty towards Japan. We're consciously levelling out now." He is expanding elsewhere in the Far East - Seoul, Singapore, Taipei - and has just opened in Thailand after being surprised when someone told him he already had a shop in Bangkok. He hopes the real thing will keep the pirates at bay.

q The author is the producer of 'Why the Suit Fits', on BBC2's 'Money Programme' at 8:20 tonight.