Bvlgari off to a slow start in 2010

Coming off of Q4 (2009) sales increases and putting the sales woes of 2010 behind them, luxury brands are optimistic for the new year. Unfortunately high-end cosmetics, watches and jewelry are not enjoying this optimism -especially Bulgari. Bulgari reported a global 5.1% decrease in sales due mainly to heavy wholesale di-stocking and continuing woes in Japan. 2009 saw the departure of long time Bulgari Japan President Stephen Lafay as well the beginning of the acquisition of Daniel Roth & Gerald Genta - this though was not enough to stop the slow decline in sales in Japan which experienced a 27.3% decrease in sales in Q4 2009. With sales of Bulgari decreasing in Japan there currently are no plans on restructuring the retail network, instead Bulgari will focus on more localization, a wider variety of product assortment and a wider range of prices. Bulgari is a strong brand with history and prestige, and optimistically, I am sure with the new appropriate steps they are taking they will be poised to be back on top in Japan and globally.

Chanel CoCo CoCoon

After a tough first three-quarters of 2009 Chanel's sales increased in the fourth quarter due in a large part to their handbags, and not just any handbag but the new(ish) Chanel CoCo CoCoon line. The line is made with nylon and leather (think puffy leather) and is reversible. Although prices are not as high as traditional Chanel handbags and accessories they do start at around 40,000 yen for small accessories; purses, key cases, etc...up to 400,000 yen for handbags and travel bags. In Japan this collection is targeted to a younger female audience with money to spend...or for someone to spend on them.

The full line of Chanel Coco CoCoon can be found at Chanel boutiques throughout Japan.

Canali Fall/Winter 2010

Thanks to Canali tailored clothing is making a bit of a comeback with consumers - if not exactly on the runways in Milan. The 2010 Fall/Winter line is full of tapered suits with strong silhouettes and wool topcoats accessorized with knotted scarves as well as sports jackets with silk neckerchiefs tucked into open collar dress shirts. The Fall/Winter collection is sharply tailored and reflects the style and mood of the Milanese man.

Canali started in 1934 by brothers Giovanni and Giacomo Canali designs and manufactures 1400 suits and 1600 pairs of pants per day exporting 70% of their merchandise. Everything is made in their headquarters in Sovico near Milan.

There are no Canali boutiques or shop-in-shops in Japan instead Canali sell wholesale direct to department stores and specialty boutiques from their showroom in located in Tokyo's Shibuya ward. You can view the new Fall/Winter 2010 collection at 5-11-5 Jingumae, Shibuya-ku, Tokyo.

Charlotte Ronson

Charlotte Ronson has signed a new distribution deal with the Wall Co. Ltd., after parting ways with her former licensee of 5 years, Sanei International.  The new distribution deal with the Wall not only includes distribution in both the Wall's stores; Adelaide and Addition Adelaide but the Wall will also be responsible for PR and sales in Japan with Charlotte Ronson retaining full creative control in Japan.  Charlotte Ronson's new fall collection will enjoy less distribution with the Wall than she experienced with the recently closed 13 shop-in-shops and flagship in Shibuya but with the Wall she will reach a more a more sophisticated customer to match the fast-forward direction of her new line, and will share floor space with the likes of Alexander Wang, Balenciaga, Givenchy and Ric Owens.

Sayonara to a landmark

Earlier today it was announced Seven & I Holdings will close down their landmark Yurakucho Seibu department store on 25 December 2010. After surviving the bubble burst in the 80's and the merger will former-competitor Sogo, Seibu Yurakucho is now another casualty in Japan's department stores. For the 13th straight year in 2009, Japan's nationwide department store sales fell 10% to 6.5 trillion yen; the first time in 24 years Japan's nationwide department stores did not earn more than 7 trillion yen.

Constructed on the former site of the Asahi Shimbun newspaper office and Nippon Theater, Seibu Yurakucho was built in 1984, and is located in an area adjacent to the Ginza, Tokyo's most popular downtown area. Seibu Yurakucho shared a twin tower with Hankyu Department Store and were co-tenants.

There are currently 16 Seibu stores Japan-wide, grossing about 5 billion dollars in annual sales and stores in Hong Kong and Indonesia. In addition to department stores, Seibu operates the specialty stores Loft, Shell garden, Parco and Muji.
The closing of Seibu Yurakucho is the most recent closure in Japan's department store industry, as department stores are still reconciling with over a decade of declining sales and influence and attempt to adjust to decreased consumer consumption and competition.

Forever 21 forever expanding

With the successful launch of Forever 21 in Tokyo last year and the announcement they are taking over Shinjuku Marui's In Your Room this spring to launch their 2nd flagship, Forever 21 is already planning their 3rd and 4th flagships in Ginza and LaLaport Tokyo Bay in Funabashi.  Setting up shop in close proximity to H&M and competing in prices with both H&M and Uniqlo; jeans ¥1,500 and t-shirts ¥450, Forever 21 sees Tokyo as a key to their expansion moving forward as they look to open up another 96 shops across Japan.  Adding a limited urgency to their products Forever 21 is refreshing their merchandise daily - so you better get yours before they are gone.

2010: What's Next for Fast-Fashion

With the success of Fast Retailing's Uniqlo on the minds of all Japanese and non-Japanese apparel firms, it seems that every company has or is planning its own fast-fashion line, i.e., Azul by Moussy and Free’s Mart. Fast-fashion companies have a strong opportunity this year to further grow as high unemployment and tight credit still challenge the economy's recovery. Currently targeting low-income and price-conscious consumers, fast-fashion so far has been able to diversify and quickly adapt to changing demands and fashion. The one threat which up until now has not surfaced, even in Japan, is the quality of goods as the prices have been low enough to draw in consumers looking for quick and trendy disposable fashion. Uniqlo which prides itself on low-cost meeting quality is one of a few companies that can claim so, as many of the companies now entering the fast-fashion market are doing so quickly and only to capitalize on the consumer's preference for trendy and affordable fashion that can be easily disposed.  Most of these fast-fashion companies/lines will not be around for the long term, but for now, price may be enough, at least until young consumers run out of money and stops spending. 

Tory Burch Reva Ballerina Flats

Recently everywhere I look I see people wearing Tory Burch's Reva Ballerina Flats. In Tokyo and Kobe (Japan's two most fashionable cities) and Osaka I am seeing the famous flats adorning the feet of many Japanese females. The Reva flat, with the Tory Burch signature logo medallion and rounded toe are named after Tory Burch's mother and popularity is quickly reaching cult-status among Japanese women. With many colors and prints to choose from is it the casual chicness or unsurpassed comfort that make them so popular? Selling for under 30,000 yen you should definitely try a pair and decide for yourself why you like them best.

You can buy the Tory Burch Reva Ballerina Flats as well as the full Tory Burch collection including ready-to-wear, shoes, handbags, small leather goods and accessories in Ginza at the Fuji Konishi building 1-2F, 5-5-18.

United Arrows Embracing The Season's Trends

According to United Arrows this season consumers want a relaxed feeling with some adventure.  With last season's mountain influence the brands this season are pushing the look further with an outdoor look pairing heavy shoes & boots and detailed coats, which already reflect the themes of some of the men's wear collections at Milan.  The explorer theme of this season's collections focused on the great outdoors, especially hiking and skiing, with outerwear and knitwear prominent in chunky textures and earthy colors.  United Arrows reports an increase in sales from their December and January same-store-comparative sales from a year ago and expect sales to keep increasing as customers are becoming more aggressive and expecting new merchandise, which is why  United Arrows is also mixing in more younger designers along with the big brands like Prada, Bottega Veneta and Moncler to offer a wider product mix.

Glamour Sales Expands in Japan and China

Glamour Sales the exclusive, invitation-only online marketplace for discounted branded goods and lifestyle services announced today that they have completed their first round of financing, securing AXA Private Equity and Mandra Captial as investors.  With $13million USD in their first round of financing GLS (Glamour Sales) will continue their expansion in Japan as well as launch an online marketplace in China.

Currently GLS has 80,000 members in Japan and have partnered with over 100 brands since the web site's launch on 27 August 2009.  So far the most expensive product that has been purchased on GLS was a PEUGEOT 207 convertible car and the most affordable and very exclusive was a Christmas cake “Buche Matelassee” by BEIGE (Alain Ducasse).  With the ecommerce business model of online private sales seeing rapid growth in the US and Europe, GLS will be well-positioned in Asia as they grow to 300,000 members and 1 billion yen in sales in Japan along with the launch of their online marketplace this March in China.

Lead by a strong management team in Japan with CEO Guillaume Davin and COO Negishi, Hiroaki, GLS is unique in the online retail marketplace by the way they collaborate directly with the brands, a benefit that allows them to offer the best and most exclusive merchandise and services to it's membership.

With China expected to become the world's #1 luxury market by the end of this year GLS will be poised and waiting.

Would you wear a brand tattoo?

Chanel is betting the Japanese consumer will with the release of their branded-tattoo transfers. First seen on last fall's runways, Chanel's transfer tattoos were developed by creative director Peter Philips. Chanel will sell 55 designs under "Les Trompe L’Oeil de Chanel" with one of them giving the illusion of wearing Chanel's chain braclets. "Les Trompe L’Oeil de Chanel" will retail for around 7,500 yen and will go on sale online, in Chanel boutiques and in department stores in Japan and worldwide on 1 March 2010.

Japan: The World's Largest Luxury Goods Market...For Now

According to Robert Polet, CEO of Gucci Group, China will take over the US as the world's 2nd largest luxury market by the end of 2010. Just like the Japanese in the past though less now, Chinese consumers purchased 60% of their luxury goods when they traveled overseas. Traveling abroad has become the important factor boosting luxury goods consumption. Last year, the wealthy from Chinese mainland purchased one quarter of the world's luxury goods. Estimates are Chinese consumers will spend up to 14.6 billion U.S. dollars on luxury goods in the next five years, taking over Japan and marking China's status as the world's largest luxury goods market- now another good reason for brands to enter and expand into China.

Miss Sixty brought to you by Toyota

In one of my earlier posts I wrote about Sixty Japan closing down operations in Japan. All operations have closed down under Sixty Japan but Miss Sixty and Energie products are still available in Japan through a new import and distribution deal with Toyota Tsusho Corporation, through their trading department. Toyota, best known for its core business of auto-industry related activities also has interests in the fashion business in which it is slowly and steadily expanding, with Sixty SpA being their latest venture into fashion.

Bvlgari Merges

Bulgari announced the merging of Daniel Roth & Gerald Genta into Bulgari. The integration will upgrade Bulgari's technical and aesthetic watchmaking with the cutting-edge skills of Gérald Genta and Daniel Roth. The full integration which will take place by the end of 2010 will result in redundancy for both the Daniel Roth & Gerald Genta brands.  For those of you who are attending Basel Watch Fair this year please visit the Salon Mondial de l'Horlogerie on March 18th, 2010 to see the latest creations of the new merged brands.

Global Quiksilver Artist - Peter Webb

It is amazing how someone as talented at Peter Webb can keep himself out of the spot-light. If you have worn a pair of board-shorts, t-shirt, jacket, jumper – pretty much any Quiksilver product over the past 20 years, chances are you are wearing a Peter Webb design or in the least, something he had his hand in!

As the Global Art director for the brand, there is no doubting the talent and vision that is Peter Webb. He has helped build an iconic brand, taking niche surf wear into main stream fashion. He has produced copious amounts of commercial designs for Quiksilver; and his designs can literally be found in every corner of the world. Designs he did in the 1980s are being re-visited by many designers today and their style is just as relevant as 20 years ago! An amazing endurance and reflection of his relevancy in design.

As a fine artist, Peter utilizes vibrant, bold colors. His work is easily distinguishable and often uses photo-realism, neo-expressionism that certainly can be described as provocative and sometimes shocking.

Rumors in the industry, say that Peter is now no longer under permanent contract with Quiksilver and is looking to use his substantial, world-wide recognized talent to explore collaborations with a range of global brands. Being a Japan and Asian observer I can certainly see that many brands would hugely benefit from having Peter Webb collaborate with them to make lines of products that will capture and inspire the youth and young adult market. After seeing some Chinese brands entice international designers to work with them to help them gain prominence and enter the global market, I am sure Peter is going to be in demand. Having a line of Peter Webb designs can only give new and even existing brands a huge boost in credibility!

Ambercombie & Fitch - Did Not Get the Memo

No, I am not an A&F hater. In fact I was a big fan and spender of all things A&F while I was in university. I am just disappointed with how they have entered Japan. First they set up operations in 2007 and then pulled out leaving everyone including employees and a billboard in fashion purgatory and this time around they lack vision in their localization of the Japan market including doubling the prices of their merchandise in Japan. I guess A&F missed that there was a recession in Japan and globally last year. They must have also missed how fast-fashion has taken reign in Japan lead by Fast Retailing's Uniqlo, where low-prices meet quality. Really, 25,000 yen for jeans, 12,000 yen for a t-shirt? For years Japanese consumers has been traveling to Hawaii and Guam and getting their A&F fix there for half the price. I know Abercombie's sales in Japan are already decreasing and they have to pay rent for their land and building in Ginza, but isn't there a better way?

More Tom Ford

Following the success of his first shop in Osaka Hankyu, Tom Ford opened his 2nd shop (shop-in-shop) in Shinjuku's Isetan last year in September. With is expanding line of men's RTW, ACC, fragrance and licensed merchandise of sunglasses, Tom Ford is going to continue his expansion with a new shop sometime this year in Ginza as well as a women's RTW line to be possibly launched in 2011. Tom Ford is definitely one of my favorite designers if not my favorite and his slow and steady expansion in Japan and globally is working as he steadily outperforms other men's brands.

Tokyo Girls Collection moves to Yokohama

Breaking with previous years Tokyo Girls Collection will not take place at Harajuku Olympic Stadium this year but will move to Yokohama Arena. This shift in venues occurs as TGC enters their 10th year and after a record breaking year (2009) in terms of sales. This year's TGC take place on Saturday 6 March from 3pm to 9pm with doors opening at 130pm. Tickets go on sale today for VIP members of Girlswalker.com and for everyone else from 13 January. Prices are 7,500 yen for the 1st floor and 5,500 yen for the 2nd floor and TGC is expecting to sell more than the 20,000 tickets sold for last year's fall 2009 show. Can TGC also outsell their record of 56 million yen in sales over two days for the spring 2009 TGC?

Reed Krakoff Japan

With the launch of Reed Krakoff's signature line already beginning in the US, Japan is now readying the much anticipated launch here with the first buying of the collection next month.

RK, designed by Reed Krakoff, the current President & Executive Creative Director of Coach, Inc., is being financed fully by Coach, Inc., and will launch in the US first and then Japan.

Starting out with women's ready-to-wear, handbags, shoes, jewelry and fragrance the brand will eventually expand to home furnishings and a men's line. Reed Krakoff Japan will start out with two shop-in-shops in department stores and one flagship store in a yet to be announced location. The line will be priced from 50,000 yen to 120,000 yen for Reed's mix of contrasting textures and new textiles including a soft cashmere sweater trimmed with leather, and an appliquéd organza top. The line's logo and tags will feature the initials "RK," as well as other signature branding items such as quilted ribbons on the handbags and a "gold bubble" on jewelry and small accessories.

With Reed Krakoff's strong design pedigree and the backing of Coach, Inc., can Reed Krakoff be a successful international luxury brand?

2010: A Reason for Optimism

The year of the tiger is already roaring in with US fashion retailers reporting an increase in same-store-comparative sales from 1% (at high-end department stores) up to 14% (at low-end department stores) with mixed results among specialty retailers and brand-name boutiques. According to Retail Metrics, a sales tracking firm, retailers increased same-store-comparative sales an average of 3 percent in December 2009. While in Italy Federmoda/Confcommercio, the Italian retail and commercial association for fashion, expects to see an increase of up to 21% this month in same-store-comparative sales from the same time in 2009. Most of the increases in sales can be attributed to end-of-season sales in December 2009 and January 2010 and most retailers are optimistic their sales will continue to increase although not at the high levels recently and currently seen. With all the retail-optimism coming from the US and Italy as well as Japan's Fast Retailing and other fashion brands in Japan beginning to posts gains, this blogger is becoming more and more optimistic for retail fashion in Japan.

More Good Fast Retailing News

Fast Retailing announced their Q1 earnings ending 30 November 2009 increased 57.2% to 34.85 billion yen with sales increasing 38.9% to 263 billion yen. The sales increase was helped by the new Paris flagship in Paris as well as the Spring/Summer +J collection by Jil Sander and a cold winter pushing sales of their heattech wear.

Rebecca Taylor's Japan Expansion

After years of languishing in a partnership with Renown, Inc., Rebecca Taylor has cut ties and signed a new deal with Itochu Fashion System Co. Ltd., starting February 1 2010. The cutting of ties with Renown and signing with Itochu signified a modernization in their Japan operations that will match their US operations. Currently Rebecca Taylor has 16 shop-in-shops in Japan which will be fully redesigned by Itochu to reflect their modern US brand, as well, Itochu will open up 4 new shop-in-shops as well as distribute a 2nd casual line for Rebecca Taylor in Japan. With sales split about 50%/50% for RTW & ACC, Rebecca Talyor will also offer more Handbags and ACC in Japan as well as open an additional 15 shop-in-shops in Japan and eventually a flagship boutique in Ginza. Is now really the time for another fashion brand to open a store in Ginza?

Abercromie & Fitch; How not to enter Japan

With the lines and excitement already dying down from Abercrombie & Fitchs' 50 million yen first day opening in Tokyo there are already signs of discontent. Anyone who has been to Ginza can smell and hear the Abercrombie store from blocks away as the scent machines blow the A&F fragrance and house music pulses through the open doors - needless to say this makes A&F's neighbors none to happy. There have been complaints regarding the half-nude male models who greet you at the door (though no complaints regarding the female models, though they are not half-nude). Besides this, apparently there have been some cultural challenges for the company as they try to import a total American culture and resist localization. Currently the make up A&F Japan's organization; top management is mostly American, the store managers, floor managers and over 20% of the shop staff are non-Japanese and non-Japanese speaking, and the Japanese employees who do work there are Japanese returnees who have lived abroad and almost 100% Americanized/Westernized - not that it is a bad thing to import American culture into Japan but resisting all localization will only lead to failure, i.e., American Apparel, Ikea (the first time), etc...Marketing Entry Strategy 101 dictates when you enter a foreign market you have to localize.

If you have been in the store the first thing you notice (besides the half-nude) male models is the enormous atrium and staircase taking up most of the first floor and when you do make it to each of the 11 floors what little there is in merchandise is stacked neatly from floor to ceiling. There is very little room to navigate the floors and the aisles can barely fit two people standing side-by-side. The waste of sales space in this store is huge - I am very curious as to what A&F's sales by square meter revenue is generating. The next A&F store opening is in Fukuoka...yes, that is right Fukuoka. Now Tenjin City is known for it's fashionable crowd but it is still a small market, wouldn't it be better as far as market-size is concerned if A&F would open their next store in Osaka, especially as H&M, Forever 21, Top Shop are not even there?

Now the positives - everyone I have heard from is happy with the store aesthetically, how can you not be with all the beautiful models, hawking jeans, t-shirts, and fragrances as well as dancing and just looking gorgeous. So, from a visual experience A&F in Japan is successful but from a market-entry localization and sales aspect we will have to see if they finally get it that Japan is not the US.

Is the love affair between luxury brands and Japanese consumers over?

Walk by or into almost any luxury-brand store in Japan these days and it seems there are always more sales staff then customers - have Japanese consumers finally lost their love for imported luxury goods? The answer could be "yes". Along with luxury goods sitting on shelves due to a drawn out financial recovery and the the emerging fashion-credibility of fast-fashion brands setting up shop and expanding the break-up could be real. After years of saving, overspending and going into debt for imported luxury goods they could not afford the Japanese consumer has finally realized it is just not worth it, that they do not need to be dressed head-to-toe in luxury. Now the mature and informed consumer in Japan will have one or two luxury items, i.e., watch, handbag, shoes, suit, etc...and mix and match it with items from fast-fashion brands. Not only does not anyone notice but no one cares anymore either - well not one except the import luxury brands who saw their sales decrease from 10%-30% last year and in some cases more. Has the Japanese consumer really moved on?

Richemont to Buy Prada?

This is the latest rumour circulating in the fashion world. It seems with Prada's debt of over $1.5 billion yen hanging over their heads, they are looking to sell one third of their company, possible to Richemont. Rumours that Miuccia Prada has been shopping around shares of Prada have been around for years without ever amounting to anything, though this time with this amount of debt something has to be done for Prada. Both Richemont and Prada both deny the rumors but if they were true, imagine the world's current number one luxury-group company, Richemont, with their portfolio of brands competing head-on with the world's number one luxury group company LVMH...only if.

Uniqlo's Same Store Comparative Sales Increase 11.5% in December

Can Fast Retailing ever stop growing? I am not sure and right now I hope not as they are one of the few companies that have shown in increase in sales in 2009 and 2010 seems like it will be even better with their low-cost G.U. brand and of course Uniqlo where Japan same-store comparative sales increased 11.5% in December 2009. The sales increase could be attributed to the +J Spring/Summer collection launch as well as their always popular Heattech apparel.

GU You!

Fast Retailing, attempting to become the largest retail apparel company in the world, is doing so not only through Uniqlo but with their very low-cost brand GU of their GOV Retailing business wing. We all know the success of Uniqlo and GU is quickly gaining ground in Japan. GU, founded in 1973, manufactures and sells casual outfits and shoes currently has 83 stores in Japan and is expanding. With price points on denim at 990 yen you won't find a GU store in city centers though you will find them in deep in the suburbs where they are taking business and market share from GAP USA and other low-cost apparel retailers. GU's positioning is too not compete with Uniqlo but to provide the same quality of Uniqlo at even lower costs, a strategy that is currently a success.