JAPAN. Japanese consumers have not given up their love affair with luxury goods, both at home and abroad. But there are signs that the market is starting to ebb.
Luxury goods are continuing to invest huge sums in domestic Japanese stores. This week Prada opened a US$85 million megastore in Tokyo. In April, leathergoods house Coach was the latest hot brand, when it opened its first flagship store. Coach has doubled its sales in Japan in the past nine months. Last September the Louis Vuitton opening in Tokyo’s Omotesando district broke daily sales records for the company. Other luxury retailers opening soon in Japan include: Ferragamo, Cartier, Gucci and Christian Dior.
“Despite the recession, luxury brands still sell well,” Dentsu Institute associate research director Seiko Yamazaki told Business Week. A stunning 94.3% of Tokyo women aged 20 to 30 own a Louis Vuitton product, according to Saison Research Institute.
Yet as more and more “brand palaces” open, driven on by retail deregulation and investment decisions taken one or two years ago, other leading bodies say the market is ebbing. According to Yano Institute, Japanese domestic luxury goods sales are forecast to shrink -4% to US$10.32 billion this year, from US%10.75 million in 2002 and US%11.38 million in 2001.
