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TOKYO — Harry Winston and Tiffany & Co. confirmed Wednesday that they are raising prices in Japan this spring to offset a weakening yen.
This story first appeared in the March 11, 2013 issue of WWD. Subscribe Today.
That news comes just a few weeks after Louis Vuitton said it was hiking up its retail prices in Japan by an average of 12 percent to compensate for exchange rates. In January, LVMH Moët Hennessy Louis Vuitton chairman and chief executive officer Bernard Arnault warned that currency fluctuations would force the company to lift its prices in Japan.
Harry Winston Japan will raise prices on jewelry but not watches as of March 22, according to a spokeswoman. Tiffany is planning to raise the prices of some merchandise as of April 10, a spokeswoman said. Neither spokeswoman quantified the size of the price increases.
It is still not clear how many other luxury brands will jump on the currency issue.
Coach, Giorgio Armani and Chanel have no immediate plans to adjust their pricing in Japan, according to spokeswomen for the brands. Gucci and Prada declined to comment on their Japanese pricing strategy. Dior did not respond to requests for comment.
Last month, Jean-Marc Duplaix, chief financial officer of PPR, said that the group may raise prices in the future. “There will be opportunities to increase prices on a case-by-case basis, and according to product category, if the impact of currency fluctuations is as detrimental as the latest trends currently suggest,” he said as the company released 2012 results.
The yen has depreciated considerably in recent months as Shinzo Abe, the newly elected Japanese prime minister, has vowed to attack the country’s long-term deflation trend. The currency has shed more than 12 percent of its value against the dollar and the euro since early December.
Still, Hiroshi Onishi, president and chief executive officer of Isetan Mitsukoshi Holdings Ltd., downplayed the immediate impact of currency on luxury pricing in Japan.
“Even when the yen was stronger, not all of the prices were [lowered]. I think luxury brands set their prices based on the cost of [materials], so we still haven’t seen any effect of rising prices,” Onishi said. “But there is a possibility that we may see that happening from this autumn.”
Regardless of potential price increases, Japan remains an intensely competitive retail market. Case in point: Isetan’s flagship in Shinjuku unveiled Wednesday, the last of its ongoing renovations in a bid to reach new customers.
More than just a redesign, the Isetan renovation project completely changed the layout of the store, organizing each department by a particular type of customer, rather than by the type of product on offer. Isetan has been refurbishing and expanding different areas of the store for several months now. One of these new areas on the second floor, which aims to attract women in their late teens to mid-30s, includes a large section designed for the “urban mother” and her various lifestyle needs. There is also a small gift section and florist.
Also on the second floor is a new department called Re-Style Tokyo, which includes offerings by many Tokyo-based brands, such as Limi Feu, Mint Designs, Theatre Products, Tsumori Chisato and Tricot Comme des Garçons. International brands with a similar customer base, including Vanessa Bruno, Paul & Joe, A.P.C. and Vivienne Westwood Red Label, round out the selection.
“We have had an edited section called Re-Style [for some time now], where we introduce new designers, both Japanese and international. This time, we made a section for Japanese designers on the second floor, so some of the designers that used to be on the fourth floor were moved down to the second floor, and we also increased the number [of Japanese designers],” said Onishi.
On yet another side of Isetan Shinjuku’s second floor is an area dedicated to edgier fashion brands from both Japan and abroad. These include Hysteric Glamour, G.V.G.V., Rag & Bone and Isabel Marant. The section includes the women’s denim bar, with jeans from a wide variety of labels. The center of the floor around the escalator wells includes several spaces for promotions or short-term shops-in-shop. Currently on offer in one of these spaces is the latest collection by local brand Jenny Fax, which shows during Tokyo Fashion Week and takes inspiration from anime and manga.