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Asia Watch: Prada Expands … Ever Upward … Going Down …

Prada Expands...Ever Upward...Going Down...Going In...Tough Going

PRADA EXPANDS: Prada Japan opened a 10,000-square-foot, directly operated shop in Ginza, Tokyo, last weekend. It will be followed by another Prada shop, with six floors, in Aoyama, Tokyo, in June. The Ginza store was inaugurated by Patrizo Bertelli, chief executive of the Prada Group, who flew in from Milan. The store, which has three floors, is expected to have sales of about $23.3 million in its first year. Prada said the unit did about $432,000 worth of business in its first three days.

Prada Japan, the company’s wholly owned subsidiary, posted sales of approximately $250 million in 2002, up 10 percent from the previous year, with an increase of 15 percent forecast for the current year.

Meanwhile, Prada is looking at another way to expand its brand image in Japan: plans are under study to establish roadside shops in Osaka and Fukuoka on the southern island of Kyushu.

EVER UPWARD: Clothing, stationery and home furnishings retailer Muji had a enormous leap in net profits to $19.6 million for the fiscal year ending Feb. 28 from a break-even performance in the prior year, according to its parent Ryohin Keikaku. The parent company operates 265 Muji shops throughout Japan, 16 units in the U.K., four in France and one each in Ireland and Hong Kong. Muji had sales last year of $960.3 million, 4 percent down compared with a year earlier. Operating profits increased 22.4 percent to $56.3 million. Dollar figures were converted at current exchange rates.

Sales of apparel and miscellaneous goods, which accounted for 32.2 percent of total sales, dropped 6.3 percent last year, although “casual basic items sold well, as well as garments with trend essence,” said the firm.

In fiscal 2002, the firm had extraordinary losses of $49.5 million, including losses from writing off merchandise inventory. In fiscal 2003, Muji had extraordinary losses of $31 million.

For fiscal year ending February 2004, the firm projects sales of $987.5 million, a 2.9 percent increase, and net profits of $33.3 million, 70.2 percent up from a year earlier.

GOING DOWN: Apparel imports into Japan from China declined 15.6 percent in February from a year earlier to $854.4 million, but the country continued to be the dominant supplier to Japan, accounting for a 71 percent share of total imports of $1.2 billion, according to the Ministry of Finance. The yen’s exchange rate for February averaged 119.26 yen to the dollar, an 11.8 percent appreciation from a year-ago level of 133.31 yen, the ministry said.

Apparel imports from the United States in February fell 28.2 percent to $20.2 million, while shipments from the European Union (EU) rose 3.8 percent to $166.2 million, according to the ministry.

GOING IN: Japanese designer Kansai Yamamoto is moving into the Chinese market for designer-brand clothing through licensing. Kansai has engaged the services of Osaka-based Intellectual Property Corp. (IPC), which specializes in managing brand and licensing businesses, according to an executive of the Kansai Yamamoto design house. The move reflects the growing affluence of Chinese consumers, which is attracting foreign design houses in increasing numbers.

TOUGH GOING: Overall department store sales in Japan in February edged down 0.5 percent from a year-earlier level to $4.57 billion, marking the 11th consecutive month of decline, according to the Japan Department Stores Association. But sales of women’s wear rose for the first time in six months on a year-on-year basis to $1.1 billion, up 0.8 percent. Men’s wear sales went up 0.5 percent to $314 million, according to the association’s report, which covered 290 stores of 102 department store companies.