Undeterred by the ongoing economic gloom and increasing competition in Japan's clothing sector, two foreign-owned chains are expanding their presence here by opening their first stores in western Japan this weekend.

Barneys New York is opening its first Japan flagship store outside Tokyo in the port city of Kobe Friday, with a special fashion collection designed in collaboration with British supermodel Agyness Deyn.

Unveiled at the Kobe Collection fashion show on February 27, the "I am Agyness Deyn for Barneys Green" collection hits the shelves in Kobe before becoming available anywhere else in the world. It is also part of the company's efforts to incorporate environment-friendly activities in its fashion business.

On Saturday, Swedish casual clothing chain H&M officially opens its first store in western Japan in neighboring Osaka. The 900-square meter outlet is Hennes & Maurtiz's seventh in Japan, underlining its rapid expansion since opening its first store in Tokyo's upmarket Ginza district in September 2008.

And as the Osaka store is the company's 2,000th outlet in the world, it is offering Y2,000 (€16.51) jeans and other gifts to the first 2,000 customers through the door.

Companies such as Barneys New York and H&M are taking advantage of the newfound popularity of reasonably priced clothing lines in a country that not long ago prided itself on the amount of famous brand-name goods snapped up by consumers. Today, cheaper is chic.

"This has been a horrible time for consumers and companies alike, but I'm also hearing positive comments from both sides now and I think there is plenty of optimism around again right now," Shiho Koike, a spokeswoman for Barneys Japan Co., told Relaxnews.

"People still want to have a dream and in this economic situation I believe it is companies like ours that can give them those dreams," she said. "There has to be balance and I think our fashion lines at reasonable prices deliver that balance."

The latest Barneys store will be in a new retail development in the smart Motomachi district of Kobe, occupying 2,800 meters over three floors of the Kobe Former Foreign Settlement 25 building. (The Independent)