By  on March 31, 2005

NEW YORK — Membership shopping clubs generally focus on selling consumers household goods and groceries in bulk, but at the other end of the spectrum, Celux, a private club in Tokyo created by LVMH Moët Hennessy Louis Vuitton, is offering a new definition of members-only shopping.

Located in the Louis Vuitton Omotesando building, the Celux shop is on the sixth floor. The long space has double-height ceilings, wood floors and a staircase leading to the eighth-floor lounge. With Pucci-covered sofas — where members can sit and nibble finger foods and sip champagne or wine — the lounge looks a lot like a frequent-flier club despite the art and fresh flowers.

Members pay an annual fee of $2,000 for the privilege of spending more money with like-minded people. “Celux is a very new concept, and its mission is to define and deliver ‘new luxury’ by being a curator and brand incubator,” said Asako Yano, the general manager of Celux.

LVJ Group K.K., a Japanese subsidiary of LVMH, already is thinking about exporting Celux to other countries. “Hopefully in the near future, we’ll make a move to a foreign market,” said Yano.

Celux features about 20 to 40 brands at any one time. The offerings represent a variety of designers and artists from different countries and a range of prices. Exclusive items such as a special Vuitton handbag and Loewe travel line have been well accepted.

Unique products from the likes of I.C.R. vs. Deth Killers of Bushwick (clothing); Conrad Leach, a painter and silk-screen artist, and an Assouline book box filled with dozens of titles from Lee Radziwill’s “Happy Times” to tomes on Chanel and Paris have sold well. At a small dinner this year, typical of Celux events, the company introduced Japanese sake from Kano Shuzo. 

Celux also has offered new designers such as Rogan, New York; Chatav Ectabit, Los Angeles; BRD from Berlin, and authentic denim brands such as Ossa Mondo and Dania from Japan. There’s also vintage resewn kimonos and Hawaiian shirts from Mai Hosokawa as well as vintage clothes from L.A., Paris and Milan. Then there’s the requisite Dior evening dresses and Pucci sun dresses.Riko Sakurai, Celux’s U.S. consultant, said the cultural exchange can work in reverse with Celux sending Japanese finds here.

The concept gives a certain group of consumers a comfortable place to shop away from the bustle of the street where aggressive young Japanese consumers quickly a store’s trendy garment.

“Our members are looking for a relaxing and mature shopping environment,” said Yano. “It’s difficult in Japan to shop for clothes. So many young people love to shop. The minute clothes are delivered to stores, they’re gone.  Celux is a place to shop without rushing and enjoy the conversation of the salon staff.”

Vuitton has a long-established dominance in Japan, where it has a 30 percent share of the luxury handbag market. An estimated 92 percent of Tokyo people in their 20s own at least one product made by  Vuitton, according to Saison Research Institute, a think tank. Yano said the company’s own research found that more than 40 percent of women between the ages of 15 and 59 use Vuitton products.

“Celux stands for the flip side of this large Louis Vuitton business and focuses on exclusivity,” Yano said. “We feel that people, especially those who are wealthy, culturally sensitive and/or trend leaders, want individuality and something special. Celux’s mission is to reply to such needs one by one. That way, we’ll always be close to luxury customers to understand their behavior and desires.”

Vuitton depended on the Japanese market for 32 percent of its sales in 2004, its single biggest market, and said revenues last year were sluggish. This was partly due to a significant uptick in Japanese travel, as Japanese tourists tend to buy luxury goods overseas. But others note a structural shift in spending patterns and brand preferences and point to Vuitton’s saturation of the Japanese market.

Whether or not the brand is too ubiquitous, it’s clear Celux members want more than just the latest Vuitton handbag style. Yano said she’s catering to a new breed of consumer. “Celux’s mission is to incubate young, new brands,” she said. “Many brands enter the Japanese market, grow quickly to a certain level and disappear. Celux feels a few very creative brands can grow more in the Japanese market. Our members are the influencers of fashion, art and lifestyle culture. When we introduce a brand, it becomes well known with trendsetters and is perceived as a brand with a high premium.”Jacques-Franck Dossin, a luxury goods analyst at Goldman Sachs in London, said Louis Vuitton could use a dose of glamour in Japan. “It’s still one of the hot brands worldwide, but maybe it lost a little bit of ground to Gucci,” he said. In Japan, Vuitton’s sales declined to $11.06 billion in 2004 from $11.35 billion the previous year.

One reason for the brand’s difficulties is that Vuitton raised prices too aggressively in Japan over the last couple of years, said Dossin. He also addressed the travel issue. “The Japanese prefer to buy when they travel because prices are 30 to 40 percent cheaper in Europe, Hong Kong and Singapore. The Japanese spend twice as much when they travel.”

Dossin believes that giving a brand that’s grown common an aura of elitism is the right approach. “The only thing is there’s a risk of insulting the regular customer who wasn’t upgraded,” he said. Nonetheless, it makes sense to create a limited series of products and hold organized events like Celux holds. “Celux is a nice piece of direct marketing,” he said.

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