Luxe a Strong Spot For Japanese Retail

Japanese retailers had another tough year in 2007 due to unusually warm weather and a variety of economic factors.

TOKYO — Japanese retailers had another tough year in 2007 due to unusually warm weather and a variety of economic factors.

This story first appeared in the March 5, 2008 issue of WWD.  Subscribe Today.

As well as a warm winter, price increases caused by the strength of the euro against the yen, inflation and a falling stock market discouraged Japanese consumers from loosening their purse strings. As a result, Japanese department stores saw sales decline for the 11th consecutive year.

This year has been tough as well, given Japan’s struggling economy, and increased competition among luxury brands should continue in 2008.

Some luxury brands, however, are enjoying significant growth in Japan despite the recession. The winners all have things in common: They have an established status, are capable of developing new products with high added value to beat the strong euro, and offer attractive and well-priced products that follow trends.

For example, at Louis Vuitton, the release of Never Full brought favorable momentum, enabling the brand to increase its popularity. The firm also offered a slate of innovative ideas, like new colors for Damier Azur and Vernis. The Louis Vuitton store in Matsuya Ginza was so popular it had to restrict admissions before Christmas and enjoyed the highest sales ever on Christmas Eve.

Other strong styles last year included Chanel’s quilted bag, as well as the Kelly and Birkin bags by Hermès, while Cartier has enjoyed strong sales of products like the Santos and Tanker. In recent years, Bottega Veneta also has become a special brand, with its leather accessories a hot performer at Christmas, and its bags priced over $4,000 also in great demand.

Miu Miu enjoyed the best sales growth rate at Isetan Shinjuku for fall, and its Umeda Hankyu shop achieved an annual increase of 165 percent. Although sales were not as brisk as at Miu Miu, Jil Sander also is keeping steady traffic in Isetan Shinjuku, Matsuya Ginza and Daimaru Shinsaibashi.

During the Christmas shopping season, brands like Louis Vuitton, Bottega Veneta, Prada and Chaumet enjoyed solid sales. At Prada, having a variety of products in stock and strengthening leather accessories, proved successful, while Chaumet and Van Cleef & Arpels expanded their customer base with jewelry retailing for $1,000 to $2,000. Cartier, Chanel Fine Jewelry and Giorgio Armani also achieved consistently growing sales, while Balenciaga was strong at Shibuya Seibu.

Another brand registering high sales was Stella McCartney in Matsuya Ginza, while Valentino also attracted a lot of attention.