By  on March 17, 2010

KOBE, Japan — Louis Vuitton and Barneys Japan have just opened stores in this lively port city known for its juicy slabs of beef and its love of luxury labels.

Although many an analyst has issued bearish forecasts for post-recessionary Japan and its hunger for pricy branded goods, both Vuitton and Barneys executives stress the importance of investing in the market and express optimism about its future.

“When the market is difficult, like Japan, you just have to think about the long-term vision. You continue to invest in the market,” said Yves Carcelle, chairman and chief executive officer of Louis Vuitton. The executive, in town for the Kobe opening, said the company is investing heavily in its network of stores in Japan, freshening up their design and in some cases expanding or relocating them to better positions to lure customers back.

“[Japan] is still our biggest market in the world, and that’s why we continue to invest,” he said of the brand’s 57-store network here. “We don’t need more points of sale, but we need better points of sale.”

Kobe’s economy — like the rest of Japan — is hardly booming. The city never fully regained its momentum of the bubble years, especially after the devastating earthquake of 1995 that claimed more than 6,400 lives and damaged much of the city center. That said, there are plenty of well-heeled consumers in Kobe, the country’s sixth-largest city with a population of 1.53 million people.

Large corporations like Asics, Kawasaki Heavy Industries and Kobe Steel as well as the Japanese headquarters of Procter & Gamble and Nestle call the city home. Kobe also benefits from its close proximity to neighboring Osaka, another major urban area.

Kobe and its surrounding area, known as Hyogo prefecture, registered sales of clothing and accessories at large-scale retailers of about 220 billion yen, or $2.5 billion, last year according to data from Japan’s Ministry of Trade and Industry. Also of note, a lavishly produced consumer fashion show for young women called Kobe Collection takes place here twice a year.

“Kobe city and the people here are very conscious [of fashion] and that’s the big reason we chose Kobe,” said Naoki Nakamura, president of Barneys Japan. “The Kobe people are very conscious of what is going on in Tokyo, not Osaka.”

The port city was one of the first parts of Japan to open to foreign trade and settlement when the country ended its period of isolation in 1853, giving the city an international flavor. A smattering of stately European-style buildings breaks up an otherwise anonymous urban landscape; a bustling Chinatown provides an added touch of the exotic. Framed by green hills and an expansive port, the city is a popular destination for weddings as well as tourists from China and other parts of Asia.

The Vuitton and Barneys stores anchor a new luxury development, which aims to inject a dose of vitality into Kobe’s main shopping district.Although the area was already brimming with retailers such as department store Daimaru as well as Dior, Agnes B, Miu Miu, Jimmy Choo, Bottega Veneta and Banana Republic, it had lost some of its buzz as of late. The new complex also houses a wedding dress boutique, a spa and a chic reincarnation of a historic city landmark destroyed in the great earthquake: The Oriental Hotel.


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