TOKYO — Japan is buzzing with retail jewelry activity these days.

Cartier opened an 11,090-square-foot boutique on 2 Chome Street in Ginza in July, De Beers opened three stores in Tokyo in September and Bulgari revealed a plan to open an 8,610-square-foot unit in the Kansai district in November 2004. Bulgari’s new Ginza boutique opened last year and is said to generate more sales than the brand’s Rome or New York flagships.

Nonetheless, the nation’s market has been slowing down somewhat. According to a report by the Jewellery Data Bank here, the nation’s jewelry market has been on a steady decline — from $18.9 billion in 1996 to $15.4 billion in 1998 and $13.8 billion in 2000. Dollar figures are converted from the yen at current exchange.

The slowdown is a result of Japan’s economic collapse in the early Nineties, as well as the general dimming of luxury goods, and the difficulties are likely to continue, according to industry experts.

Sales of fine jewelry and watches through specialty and watch stores were $8.2 billion in 2000, a 19 percent drop from 1998. Sales at department stores dropped 2 percent to $2.4 billion, while sales at supermarkets also dropped 14 percent to $1.3 billion. Direct selling from wholesalers to consumers generated $317.3 million, down 19 percent from 1998.

Industry experts estimated that overseas jewelers account for about a quarter of the market, with sales on the rise. Among the top foreign jewelers here are Cartier, Tiffany & Co., Bulgari, Chaumet, Piaget, Van Cleef & Arpels, Chopard and Damiani. These international brands typically sell their jewels at department stores where brand-conscious consumers shop.

As for the domestic brands, Vendôme Yamada, F.D.C. Products and Star Jewelry are the three biggest jewelers, while Mikimoto, with annual sales of $365 million, is often considered the largest international brand.

Sales at specialty stores that deal in nonbranded jewelry have dropped in the recession, while the luxury brands and powerful domestic brands have expanded their shares of the market, according to industry experts. Instead of developing products by themselves, many domestic jewelers now look to import new brands.

Foreign jewelers, meanwhile, have started looking for the business chances in other Asian countries including China. For example, Chaumet experienced a rapid sales increase for these two years in Japan and will open boutiques in Moscow and Taipei. Mikimoto will open a shop in Seoul in November and in Bangkok in 2005.

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