Kiyotaka Fujii

Louis Vuitton, while firmly established in the Japanese market, still has room to grow.

TOKYO — Louis Vuitton, while firmly established in the Japanese market, still has room to grow.

So say analysts as well as Kiyotaka Fujii, who last month became the head of the Japanese arm of the French luxury brand, just in time for its huge fashion show and party last week, attended by Marc Jacobs and top brass of Vuitton parent LVMH Moët Hennessy Louis Vuitton.

“I want to lead the brand on to the next stage,” Fujii said last week, two days after 1,000 people celebrated disco-style under a huge dome erected in Yumenoshima Park for the brand’s show. “Louis Vuitton has a long-term vision and executes business of high quality. It is also a good balance between innovation and tradition.”

It is understood that the brand’s Internet business, as well as a foray into children’s wear, are among growth vectors for Vuitton. The brand, which operates 52 stores, including 40 shop-in-shops in department stores, in Japan, is also successfully charting expansion into tertiary markets here. “Sales of our new stores in Urawa and Mito, both middle-size cities, have been more than expected, and there is a possibility of opening shops in cities of that scale,” Fujii said in a recent interview with WWD Japan. “In the metropolitan area, we will review locations as well as sizes of the stores. After land prices declined [when the nation’s bubble economy collapsed], there were some changes in people’s places to live and shop. We will review them carefully and reconsider the lineup of merchandise.”

Newer product categories for Vuitton — such as jewelry, watches and eyewear — are growing rapidly in Japan and exceeding expectations, according to Fujii. “Ready-to-wear is another category to grow, and this communicates the message from Louis Vuitton to consumers and increases the brand value of Louis Vuitton,” he said. “Business on the Web is another possible approach to consumers.”

Fujii’s arrival as president and chief executive officer of Louis Vuitton Japan Co. represents the first change of top management during the brand’s illustrious 28-year history in Japan. He succeeded Kyojiro Hata. Fujii is also president of the Japanese arm of parent LVMH Moët Hennessy Louis Vuitton.

This story first appeared in the June 12, 2006 issue of WWD. Subscribe Today.

Fujii, 49, comes from the worlds of consulting and information technology. He joined Louis Vuitton Malletier from Quintiles Transnational Japan K.K. in December as director and executive committee member. Before that, he worked at the New York headquarters of First Boston and McKinsey & Co. He graduated from Tokyo Uni­versity and Harvard Business School with an MBA.

“Fujii’s career as a consultant who offered services to top management of major companies has been highly appreciated,” Yves Carcelle, Vuitton’s chairman and ceo, said when announcing the landmark personnel change. “Also, the person who is to be selected has to be Japanese and familiar with the Japanese culture. So far, thanks to Hata, ideas such as a collaboration with Japanese architect Jun Aoki, artist Takashi Murakami and introducing kabuki to Paris, were successfully realized. We want to keep introducing creative Japanese people to the world. Taking good points from various cultures into new teams is one of our strengths.”

In recent years, Vuitton has pursued an aggressive marketing strategy in Japan, opening glittering, sprawling flagships in Ginza, Omotesando and Roppongi, for example. This spring, Louis Vuitton opened two shops and renovated four stores. Today, the company employs 2,000 people in Japan.

“We are very positive in marketing in this market,” Carcelle noted. “The economy is growing and the market has become more sophisticated, but we invest a lot in creation, quality control and distribution control as well as opening stores. Introducing new products is also important.”

“There is still room for Louis Vuitton to grow in Japan,” said luxury analyst Kana Sasaki at the equity research division of Mitsubishi UFJ Securities. “For Louis Vuitton, the Japanese market is not considered saturated yet. The strength of Louis Vuitton is its high recognition among people of wide generations, so opening more shops in middle-size cities makes sense. That’s the integrated power of the brand that includes product development and image management.

“Since last winter, consumption has been increasing, and the number of visitors at the nation’s department stores has been also in the rising phase, while the whole economy is picking up as various figures indicate,” Sasaki continued. “And when the market warms up, it’s time for the brand to expand business.”

There are broader challenges, however. Japan’s population has been in a long downward spiral, and the average age of the population is among the oldest in the world. “That’s one reason why Louis Vuitton is improving the positioning of the market in Japan, which definitely leads the brand to expand in other Asian countries, eventually in China,” Sasaki noted.

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