TOKYO — Gleaming luxury towers keep springing up in Ginza here, and Bulgari is the latest to join the crush.
The Italian jewelry and leather goods brand has taken things a step further, however, opening not one, but two major stores in Tokyo in the last few weeks. On Wednesday, Bulgari feted its largest store in the world, in Ginza, which followed the opening earlier this month of a flagship in the Omotesando region.
The stores signal the brand's commitment to Japan, a stagnant yet strategic market for jewelry and other luxury goods. They also show that, when it comes to the Japanese market, a store alone is no longer enough to lure consumers. The 10-floor Ginza tower features a glass facade, rooftop lounge and panoramic restaurant, while the 6,500-square-foot Omotesando store has a cafe and gourmet chocolate shop.
"Japan remains an enormous market, the biggest market in the world. It's very important to be a leader here," Bulgari chief executive officer Francesco Trapani told WWD in an interview on the Ginza tower's bridal floor, which carries everything from modest engagement rings to diamond tiaras.
Trapani said the Omotesando store is performing "very well" in its first month of operation and his expectations for the Ginza tower, featuring more than 10,000 square feet of selling space, are just as high. The ceo said the retail portion of the tower, excluding the bar and restaurant, should break even as early as next year.
"These two [flagships] are both image statements, but their overall purpose is to do business so we're hoping that they generate great results in terms of sales and profits right away," he said. The two stores commemorate the 20th anniversary of the brand's debut in the Japanese market.
Bulgari's Ginza tower, across the street from rival Cartier and down two doors from Tiffany & Co., opens to the public Friday. Jewelry and watches occupy the ground floor, while handbags, eyewear, scarves and accessories are displayed on the second level. The third floor houses the bridal salon and VIP shopping rooms for high-end jewelry. Bulgari Japan's corporate offices are located on the fifth, sixth and seventh floors of the structure, which is designed to resemble a jewel case.Bulgari inaugurated the store on Wednesday morning with a special performance featuring a traditional Japanese drummer and a pair of Kabuki performers sporting face paint, gilded costumes and floor-length manes of hair. Later that evening, model Ai Tominaga, a handful of geisha and local celebrities, including actresses Yoshino Kimura and Kurara Chibana, toured the tower.
In 2009, the Ginza tower will also feature a special area dedicated to Bulgari's new skin care line and in-store beauty treatments, Trapani said. An in-house team of architects designed the flagship's interiors of Trani marble and oxidized steel.
The restaurant and cocktail bar occupy the top three floors of the tower, offering stunning views of Ginza's electric skyline by night. Chef Michele dell'Aquila, who migrated here from Bulgari's resort in Bali, turns out a menu of Italian fare like tagliolini with porcini mushrooms and a few notable variations like a Caesar salad with artichokes.
To fete the Ginza location, Bulgari is displaying vintage jewelry in its windows and more than a hundred one-of-a-kind jewelry pieces throughout the store. These special gems include a 144-carat sugar loaf-cut sapphire necklace fetching nearly 713 million yen, or $6.6 billion.
Bulgari is also offering a line of special products exclusive to the Ginza store, including two diamond-studded models of the Asimov D watch, jewelry pieces featuring inlaid antique Roman coins and clutch bags in crocodile.
Products unique to the Japanese market are another lure brands are using to try to jump-start sales in the country. While luxury executives have been more optimistic in recent weeks about business in Japan, it follows a year of stagnant growth in what is the largest single market for many brands.
Meanwhile, it's surprising there is any room left in Ginza for another luxury megastore. The opening of Bulgari's 10-story tower follows the launch earlier this month of Giorgio Armani's 12-story flagship with much fanfare and a $20 million price tag. Gucci and Bottega Veneta also added major stores here recently, joining the likes of Chanel and Christian Dior. Bulgari declined to disclose its investments in the Ginza or Omotesando spaces, both of which it is renting. However, capital expenditures this year, including the two Tokyo flagships, will total 100 million euros, or $149 million at current exchange.These flagships for luxury brands are proving to be a costly game of one-upmanship and sparking plenty of debate among industry observers.
"[Bulgari] needs to convince the market that its new stores due in [the fourth quarter] are enough to sustain a reversal of current declines," Morgan Stanley analyst Louise Singlehurst wrote in a research note last month. "We believe capital consumed by these stores may have been better deployed in higher growth markets (China and Russia)."
However, Noboru Ikeuchi of Yano Research Institute Ltd. justified the ongoing building blitz in Ginza. In tough times, European luxury brands need to reassert their presence at the forefront of hesitant consumers' minds, he said.
"They had to do it now to avoid finding themselves in a worse situation," he said. "It's risky, but they had to do it."
In fact, competition is intensifying here as luxury brands face static demand and a weak yen that is curbing consumer spending power. Bain & Co. estimates Japan's market for luxury goods will grow just 2 or 3 percent this year. In 2006, the market inched forward by just 1 percentage point to 22 billion euros, or $33 billion.
"Regardless, given the importance of this market in terms of tradition, aspirational spending and sales volumes, we definitely expect a recovery [at some point]," said Claudia D'Arpizio, a partner with Bain.
Trapani said he is hoping the Ginza and Omotesando flagships, along with additional plans to expand other stores in the country, will help Bulgari steal market share from its competitors.
Japan is currently Bulgari's second biggest market after Europe, accounting for almost 22 percent of revenues. Third-quarter sales in Japan recovered slightly, but were flat at 56.3 million euros, or $77.1 million. Despite Japan's sluggish performance of late, an aging population and the destructive power of a weak yen, Trapani stressed the importance of succeeding here given the sheer size of the market and the intensity of its wealth.
To wit, Bulgari used to focus on its more affordable jewelry lines like its gold coil Bzero jewelry, but the company is shifting its strategy to higher-end jewelry pieces costing upward of $100,000, Trapani said."We don't just cater to the vast Japanese client base, but also to the more sophisticated part of this market," he said.
Still, Bulgari isn't exclusively targeting the superrich, as the restaurant and cafe can attest. Bulgari already has some credibility in the restaurant world through its hotel ventures in Milan and Bali. Trapani noted how Bulgari's chocolates, made in-house at the Omotesando store, are generating both foot traffic and cash register receipts. Each chocolate features a unique filling, such as truffles from Alba or limoncello from Amalfi, both in Italy, and can fetch as much as 1,500 yen, or about $14, for a single piece.
"We sell as many as 700 to 800 of them a day during the weekends," Trapani said. "We are in luxury and, in the end, luxury is entertainment."
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)