Japan going frugal with Forever 21 Ginza opening

by Yuri Kageyama - Associated Press

TOKYO — Move over Gucci. Here comes Forever 21. Trend-conscious Japan is outgrowing its longtime love affair with luxury brands and turning to a new passion: Fast fashion.

The star brand of American mall-style clothing – reputed for delivering runway looks at cheap prices – opened Thursday in Matsuzakaya department store in Tokyo's upscale glitzy Ginza district.

In a move symbolic of the shift to bargain hunting in slowdown-struck Japan, Forever 21 is replacing what was a Gucci boutique, packing five floors with colorful racks of 350 yen ($4) tank tops and 1,580 yen ($17) frilly skirts.

"It's a surprise to find good bargains in a department store," said Fusako Suzuki, one of the first customers, clutching her purchase of eight items, including socks and summer tunics, adding up to a thrifty 10,000 yen ($100).

"I used to go to expensive brands when I was single but not any more, now that I'm married," the 33-year-old pharmacist said of former favorites like Burberry.

The department store replaced Gucci with Forever 21 in the hope of drawing more business and is offering freebies and discounts to those who buy merchandise worth 2,100 yen ($22) at Forever 21.

The new Forever 21 store is just its second in Japan.

The first opened in the teenybopper Harajuku district a year earlier, drawing a line a kilometer (half a mile) long. Its aisles are still overflowing with shoppers, who are buying up Forever 21's street-style wear with the same frenzy for local brands famous for "kawaii," or cuteness.

The second store seeks to cater to an older but young-at-heart crowd in Ginza and has a children's section. It drew a shorter line for the opening but it was packed compared to the rest of the department store.

Ginza still boasts its established European brands such as Chanel, Louis Vuitton, Prada and Hermes, carrying price tags of thousands of dollars (millions of yen), including a Gucci store around the corner from Forever 21.

But its landscape is changing with the arrival in recent years of Swedish chain Hennes & Mauritz AB, or H&M, Zara of Spain, and Japan's own fast-fashion retailer Uniqlo.

Analysts say Forever 21, offering 1,680 yen ($18) tops that get marked down to 399 yen ($4) on sale, has a good chance of securing a piece of what Tokyo-based think-tank Yano Research Institute estimates is Japan's 10 trillion yen ($108 billion) apparel business.

Younger Japanese are becoming more frugal than their parents and more confident about how they dress, rather than depending on high-end brands for status.

They also love the variety available at Forever 21, which updates its stock everyday, says Paul McInnes, editor of Tokyofashion.com.

"The stores have copies of luxury brands, but they are produced very quickly – and very cheaply," he said in an interview with The Associated Press.

But McInnes and other experts warn foreign brands can fail in Japan, and the key is not only speed and price but also being in tune with local tastes.

In fast food, Krispy Kreme and McDonald's have emerged big winners here while Dunkin' Donuts and Wendy's have been forced to leave the market.

Among the imports that appear to be struggling is U.S. preppy brand Abercrombie & Fitch Co., which opened in the Ginza, across the street from Forever 21, in December, analysts say.

Although the skimpily clad male sales clerks drew initial media attention, the crowds have dissipated, partly because some of its clothes are sold at double its U.S. prices.

That's something that may have worked in the past but no longer because Japanese check prices online and more have shopped in the U.S.

The look was also all wrong, given the trend here for androgyny in men – just the opposite from the macho casual attire being pushed by Abercrombie & Fitch, says Timothy Schepis, a fashion expert who consults for businesses setting up shop in Japan.


"Japanese consumers' priorities have changed a lot since the recession. They've become more mature shoppers due to the Internet, where they can find the prices of things easily and multiple places to compare," he said.

The Forever 21 chain, based in Los Angeles, has grown since 1984 to 480 stores in 15 countries. It is hoping to open some 10 stores a year in Japan.

Two are set to open in May, said Executive Vice President Lawrence Meyer, while declining to give Japan profit numbers or targets.

"Japan is our No. 1 market in Asia," he said. "We are very pleased with the way the Japanese customer has accepted our brand."

Now a Little Self Promotion

Thanks to the article by Yuri Kageyama of the Associated Press on the changing landscape of fashion in Japan and the opening of Forever 21`s Ginza Asia Flagship store, I too was able to get some press.  Please read on and pass it on to all who may be interested.

Washington Post

Huffington Post

ABC News

Business Insider

Yahoo Finance

SFGate

This are just a few of the media who carried the article and there are many more．Please enjoy! 

Forever 21 Ginza - How to Succeed in Japan

Yesterday morning when the second Forever 21 store in Japan opened their doors at Ginza Matsuzakaya, there were already 1,000 shoppers ready and waiting.  Strangely enough they did not have to wait long...at least on the outside, as the only line you had to wait in was to pay for your merchandise - sometimes over 30 minutes.

This second Forever 21 is billed as Forever 21`s Asian flagship.  With five floors of women`s, men`s, children`s and even one floor devoted to just accessories there is something for everyone, especially with prices from 99 yen for women`s fashionable underwear.

This Ginza Forever 21 is targeting a slightly older teenager and young adult with a little more sophisticated product.  Where they succeed in this offering for the women with dresses, coordinates, underwear and accessories, they failed with the men where all the merchandise could have been dead or overstock from the Harajuku store, just with more variety.  If you like your man in cargo camo-shorts with a printed t-shirt then I stand mistaken.

The new Forever 21 store again succeeded where many foriegn brands coming to Japan don`t - localization; from sizes to colors and a large variety of accessories to keep many people in the store for several hours at a time.  With the average purchase at 8 items most people did not spend more than 12,000 yen and still walked away with some fashionable pieces to their wardrobe.  I personally spent several hours there yesterday and walked out with 5 pices for only about 5,000 yen and was very satisfied.

Ferragamo bucking the sales trend in Japan

With the opening of their new 2,798 sqf flagship across from Roppongi Hills in Tokyo Japan, Salvatore Ferragamo is enjoying 2010 more than other fashion retailers as they experience an 8% increase in sales in the first quarter of the year, and with April sales already increasing this has been the first, four months in a row of positive growth experienced by Salvatore Ferragamo in several years.

The reasons of Ferragamos`s success in Japan vary and can be a lesson to other fashion retailers. While other fashion brands are expanding into China, Ferragamo still sees Japan as a very big market and has continued their investments here by opening new stores (75 now in Japan), and offering more affordable-priced products, i.e., handbags, a new logo and a collaboration with Swarovski as well Ferragamo is focusing on Chinese tourists status-shopping in Japan as for the Chinese customer it is better to buy a bag in Japan than in China where someone else may have the same bag.

Department Store Woes Continue

To add to the decreasing customers, recent closings and the steep decline in sales at Japanese department stores (decrease of 6.58 trillion yen in 2009 from their peak of 9.7 trillion yen in 1991), they are now also losing employees. The top five major department stores have lost 20% of their work force through natural attrition, retirement, layoffs and restructuring.

Leading the way is Shinjuku Takashimaya which in February halved their full-time workers from 500 to 250. Following Takashimaya`s lead, Isetan Mitsukoshi Holdings Ltd. let go of about 25% of their work force of about 6,400 full-time employees. Not to be left out Daimaru Matsuzakaya Department Stores Co. is poised to cut about 30% from their full-time work force of 3,700.

Now, not only do department stores have to worry about declining sales due to decreasing customers, they now have to contend with losing the people that have made the department stores work. There is no bright-side to people losing their jobs though maybe this is an opportunity for Japanese department stores to become more efficient and when they do start hiring again - bring in some new, fresh-thinkers who can help turn the Japan department sore industry around.

More Pop-Ups Popping-Up

With the economy still recovering and brands still going out of business, now is the time to try out if that must-have location is going be a good investment in terms of sales, without signing a long term lease.

When fashion brands move into a retail location it is usually for a long term lease for many years, so, when business does not work out and they move out that leaves a lot of empty stores and with so many vacant retail locations now available landlords have begun renting to temporary tenants instead of leaving an empty store. In 2009 when French Connection, Miss Sixty, Versace, Et Vous and others all closed their doors including all their shops, that left many vacant stores - many still with leases. Some companies renegotiated leases, others took a penalty and still others tried to sub-lease or pass the lease on to someone else.

In March, Marui in Shinjuku rented out a temporary space to apparel company Cross Plus selling women's outerwear.  The space will be open for business for only around two weeks.  Again in March, apparel retailer Mac-House Co., opened a pop-up store in a Tsukuba City shopping center selling menswear, and as well they will also use it test-market women's apparel. This space will remain open for about six months.
These brands along with Chiyoda Co., a shore retailer, opened a pop-up store for one week and Konaka Co., a menswear company, opened a pop-up store for two months, all experienced an increase in sales, and were able to test a market without a long term commitment.

Taking advantage of these retail locations and trying them on to see if they are a good fit for their brand is only natural in the fashion industry, after all as everyone who works in retail knows one size, like one market does not fit all.

Part I: Brand Watch 2010

As the economy improves worldwide and in Japan, certain brands have set themselves up to succeed in Japan's fickle and competitive retail market. What sets these brands apart from other brands are the appealing personalities of their designers as well as their sharp business-sense.

Marc by Marc Jacobs has several strong qualities going for it. First a famous and well-known designer who is approachable and whose designs are both affordable and attractive as well as localization in the Japan market and only a small retail presence; Marc by Marc Jacobs has a few stores keeping it both special and profitable.

Tory Burch took Japan by storm last year entering Japan with shop-in-shops and her flagship store in Ginza. With her down-to-earth friendly personaIity and recognizable brand emblem Tory Burch is building a strong and popular brand in Japan. Tory Burch's team are seasoned fashion professionals who understand localization and market entry - this combined with her incredibly fashionable and comfortable RTW & ACC will make Tory Burch a strong-growing brand in Japan and Asia.

Kate Spade has slowly built her brand in the US and in Japan. With fun, playful accessories that suit the modern-women in Japan, Kate Spade has built a strong brand-following smartly, slowly and with just enough stores to keep her brand new and exciting. Furla has gone through some major changes in management in Italy and Japan. With those changes have come more efficiency, better sales, and stronger products, and marketing. With an affordable price point and just under fifty shops in Japan, Furla is set for strong growth. These are just a few of the brands you can expect great things from in 2010. And some of the characteristics that make these brands great are strong management, a committment to Japan through localization and not saturating the marketing keeping their brand and products new and exciting.

Check back as I review additional brands moving forward.

Japan Department Stores: 25 Straight Months of Losses

The numbers in this headline alone would cause many retailers to close doors, but not Japan department stores. Resilience, pride, blissful ignorance, call it what you will but department stores in Japan keep operating - well, not all of them. The remaining department stores will continue to be thinned out with the weakest closing and the strongest claiming the remaining customers and sales, as once again department store sales in Japan fell *3.5% to 543.6 billion yen in March, the 25th straight month of decreases - sometimes double-digits. Not all is bad as recently the sales decreases themselves have decreased holding steady below 5% declines instead of the over 10% declines the department stores were experiencing a year ago.

Could the improving declines in sales have anything to do with department stores changing their mentality and shifting their business strategy from a highly jurassic strategy to a strategy that is now in-line with today`s economy and consumer? Yes and no. Some of the improving sales declines have to do with clearance sales and store renewals - a short-term fix, and some of the improving decreasing sales can be attributed to a shift in business strategy with the best example being Matsuzakaya opening up the Forever 21 Asia Flagship store on 29 April in to attract the increasing Chinese and customers as well as reclaim family-customers who long ago turned away from department stores in favor of suburban shopping centers and outlets. This move will also be followed by Takashimaya opening up three Uniqlo shop-in-shops over the next year and the aggressive pursuit of Chinese customers by other department stores; arranging tours, offering translating services and shipping. Matsuzakaya has never been the strongest of the department stores (** number 11 in terms of sales in 2009) but now they are at the forefront of a shifting business strategy that is taking risks and openly courting customers instead of just waiting for customers to come to them.

Let us hope this shift in strategy will be adopted by all Japan department stores, though for some it may already be too late and for the others it is now time to do or simply fade away.

* Source: Japan Department Stores Association
** Source: Japan Department Stores Association

Forever 21 Forever Expanding

Continuing their expansion in Japan Forever 21 already has plans to open up their third shop in Chiba at LaLaport Tokyo-Bay in Funabashi.  The shopping center store will be 1,750 sqm and will be Forever 21`s first  store in a suburban area in Japan and will come less than a month after their second store opening in Ginza Matsuzakaya department store on the 29th of this month.

Costello Tagliapietra for Uniqlo

The newest designers to join the fast-fashion collaboration craze are New York-based designers Costello Tagliapietra, and they are designing for none other than Fast Retailing`s Uniqlo.  The women`s wear design duo will debut a limited edition capsule line consisting of 14 different style-dresses for spring in a variety of colors including rose, grey, mustard yellow and cornflower blue, and fabrics including jersey and silk.

The collection will hit Uniqlo stores on 20 May and will sell for 3,000 to 3,000 yen.

LVMH Leading the Luxury Recovery

With Q1 2010 over, Louis Vuitton Moet Hennessy reported strong growth in the US and Europe with a sales increase of 11.3% compared to Q1 2009. The increase in earnings was a good sign as LVMH beat analyst`s expectations and were rewarded with a 1.5% increase in their stock price. Sales were up in all categories including watches, perfumes, champagne and fashion & leather goods - not including Japan which defied the rebound around the rest of the world. While sales were up in the US 20%, Europe 11% and the rest of Asia 20%, Japan saw a total drop of 7%, with only watches & jewelry sales increasing 1% and a small percentage increase in fashion & leather goods.

LVMH was one of only a few companies that stood by their core values of quality and craftsmanship during the recession and has emerged a stronger brand because of it.  With demand increasing it is nice to see LVMH leading the way to the luxury recovery

* Financial Data Source: WWD

Helmut Lang Gets a New Designer

Helmut Lang of Link Theory Holdings Co. Ltd. which is part of Fast Retailing has appointed a new designer for their menswear line. 

Naoki Takizawa, former designer of Issey Miyake will head up the currently expanding menswear line where he will continue the tradition of simple, elegant and urban clothing designs made famous by Helmut Lang from 1986.

The Helmut Lang brand of Fast Retailing posted sales of 2 billion yen in 2009 and is one of the only non-fast-fashion brands of Fast Retailing.

New President for Valentino Japan

Yesterday after calling the Valentino Japan office and speaking with several different people I was not able to confirm the hiring of Rolf Kambli as the new president of Valentino Japan.  However when I called Valentino SpA headquarters today in Milan, Italy I spoke to someone who was able to confirm...Rolf Kambli, former CEO for Bally APAC, will be the new president of Valentino Japan.  Mr. Kambli will be responsible for all day-to-day operations for Valentino Japan and their 25 stores.

Paul & Joe Beaute

Not to be content with just having Jil Sander design the successful +J line, Fast Retailing`s Uniqlo has now joined other fast-fashion companies H&M and Topshop with a designer collaboration. This collaboration is a t-shirt collaboration with Paul & Joe and is called Paul & Joe Beaute, desgined by Sophie Albou from Paris. The t-shirts are all theme-prints and are very affordably priced at 1,500 yen.

Takashimaya: Looking for a Silver Lining

First Takashimaya announced there would not be a merger with H2O, and then they announced that after 17 years they are closing their flagship store in New York, and now this - Takashimaya announced in February 2010 they had a 34.4% decrease in net profit from the same time last year.

Takashimaya blamed the decrease on the continuing woes of the department store industry in Japan as well as continued weak consumer spending due to the slow-recovering recession in Japan. Fear not as Takashimaya has made a partnership with Fast Retailing to open up three Uniqlo shop-in-shops in Shinjuku Takashimaya as well as Saitama and Chiba in Sogo department stores. This partnership could be just what they need to reclaim customers and increase profits.

Peter Webb signs with Asia expert and top advertising /consumer consultant Tyron Giuliani.

Peter Webb’s designs have been worn globally and have been a major contributor and influence on the artistic direction and product design of surf-wear giant Quiksilver for well over 20 years. As the Global Artist for Quiksilver, he has either created or worked on nearly every artistic theme that was launched in recent memory, including Echo Beach, Surfers of Fortune, The Crossing, Warpaint and Ghetto Dog just to name a few.
Peter Webb helped take Quiksilver from the surf fringes to a world-wide mega-brand. From 2010, Peter is now independent of Quiksilver (however still consulting on a country-by –country basis) and is looking at options to collaborate with various brands throughout Asia and the globe.

Peter has resurfaced signed with Tyron Giuliani as his Artist Manager -Asia. Tyron, a 12 year veteran of Asia, has consulted in Japan and Asia for a range of mega-brands; including Quiksilver, Paramount Pictures, Apple, Adidas, Nokia, MasterCard, 20th Century Fox, Nike, Red Bull, Japan Fashion Week etc.

Tyron shares the view with many observers, that Peter’s proven success throughout the world, could indeed play a major role in helping to shape developing brands in Asia. Since many Asian brands focus on product lines, it is perfect timing for them to penetrate deeper into the consumer psyche by developing their corporate brand that can interest, captivate and take these brands from the sporting arena to everyday fashion. Brands like Quiksilver, Nike and Adidas have mastered this cross-over. It is understood that Peter is going to be considering expressions of interest from a range of Asian and global brands developing in Asia, for new lines, designs, artistic themes and to help make a brand appealing to a global audience. With major Chinese brands and other Asian based brands certainly wishing to develop globally, it will be interesting to see who gets the first chance to work with Peter and develop a new line. Based on a 25 year career of successful designs for Quiksilver, Peter is surely capable of producing commercial success for any brand that engages him and is targeting the youth and young adult market.

For expressions of interest to engage Peter, please email direct to his Manager, Tyron Giuliani at
ty@asianetjapan.com

Fast-Fashion Meets Department Stores

Japan department stores may have finally found a solution to their years of decreasing sales, albeit maybe only temporary - a partnership with fast-fashion companies who currently are the darlings of the retail industry.  In a bid to increase sales Fast Retailing`s Uniqlo, H&M and Forever 21 will open doors insides some of Japan`s major department stores.

This month on the 29th, Forever 21 wil open a 3,000 sqm flagship inside Ginza`s Matsuzakaya.  In attempt to draw back family-consumers who have turned to suburban shopping centers, Forever 21 will offer women`s, men`s and kid`s clothing - I just hope the selection for men`s and kid`s is larger than their Harajuku store.

Not to be out done Fast Retailing`s Uniqlo will open three new shops in department stores including Shinjuku Takashimaya as well as Saitama and Chiba in Sogo department stores.  Uniqlo, which already has a strong presence in suburban shopping centers is now expanding additional retail doors in Tokyo.

H&M is also rumoured to be interested in opening up doors in department stores and shopping centers throughout Japan.  They better act fast or there will not be any space left as besides the well-known fast-fashion retailers Uniqlo and Forever 21, lesser-known fast-fashion retailers Kobe Leather Cloth Co. and Point are also joining in the department store expansion.

Can this happy marriage between low-cost brands and high-end retailers save department stores?

Must Read article in Japan Times on Fast-Fashion

Here is a very informative article by Paul McInnes from Japan Times on fast-fashion in Japan - with a few quotes from me.  Please read on...

http://search.japantimes.co.jp/cgi-bin/fl20100411x4.html

Dont` Call it a Comeback...They Were Never Really Down

After a rough two-month start to the year and a drop in their stock prices this week, Fast Retailing`s Uniqlo first-half net profit rose 55.7 percent to 55.36 billion yen.

Sales were driven by such key products as the HeatTech line of thermalwear, Neo Leather series, and ultralightweight down jackets as well as increasing sales of international Uniqlo sales locations in London, Paris, New York, Moscow, Singapore and several Chinese cities.

To reach their forecast of net profit 71 billion yen, Fast Retailing will pursue an aggressive marketing campaign for their underwear lines Serafine and Silky Dry, the summer version of HeatTech.  Uniqlo expects to sell 17 million units of their underwear line, with sales increasing by May.  Fast Retailing will also increase their doors over the next year beginning on 15 May in Shanghai.  At 39,094 sf the Shanghai store will be the largest store in the world, followed this fall by their largest store in Japan in Osaka’s Shinsaibashi as well as three new shop-in-shops in Japan including Tokyo.

Even with a turbulent start to the month and week Fast Retailing`s future looks bright.

Tokyo* Fashion Daily Fashion Round Table...Coming Soon

Are you interested in the personal brand tastes of women in Japan?  Well, I have put together a round table of thirty women of different ages, backgrounds, and nationalities, living in Japan and asked them several questions about their personal brand tastes?  Come back soon for the first official Tokyo* Fashion Daily Round Table.

The ABC`s of Retailing in Japan

Not everyone did poorly in fashion retail in Japan during 2009.  Though not exactly high-street fashion ABC-Mart, Inc. the shoe retailer, reported 14.4 billion yen in profit for fiscal year 2009, an increase of 31% from 2008.  Boosting those earning were the opening of 75 new stores in Japan bringing their total store count to 507 stores in Japan.  While most companies stopped expansion or closed stores entirely in Japan in 2009, ABC-Mart actually opened up 20 more stores than their planned 55 locations seriously bucking the store-closing trend.  Actual sales increased 17% to 113.5 billion yen with men`s shoes accounting for about 26% of the increase and women`s shoes for about 33%.  Forecasts for 2011 expect a 12% increase to 126.7 billion yen with net profit to increase 5% to 15.1 billion yen, with profits of course boosted by another 70 new stores  this year in Japan.
 
* Source: Nikkei

The Fall of Japan Department Stores

Almost two years have past since department stores in Japan have experienced a positive increase in sales and still very little is being done to improve the way business is being done - in fact it is business a usual. How can an establishment that once was so important and had so much economic might fall so far into obscurity.

For over a decade analysts, economists, financiers, fashion executives and the press have spoken about the fall of what once was a mighty icon of not only the Japanese economy but Japanese everyday life. Over this last decade Japan`s department stores have become too expensive, losing customers to online shopping, fast-fashion chains and outlet malls. Even the ever-reliable food basements and first floor cosmetic counters cannot even be count on for steady sales. With an out-of-touch management and failed face-saving attempts at long renewals department stores have merely put an expensive band-aid on their inevitable fall while other retailers are adjusting and adapting to the changing tastes of the Japanese consumer.

Even before the recession department stores in Japan were in serious trouble and since the recession their troubles have quickly become more visible. Reading the list of department store closings is like reading a retail obituary. Not only are small department stores closing throughout Japan but also the major ones. At the end of the downward spiral of decreasing department stores sales only the strong will survive. Only the companies brave enough to change direction, brave enough to try a risk will succeed. Don`t be sad for department stores because like fashion retailers they oversaturated the market even during years of declining sales. In the end more department stores will close and in their place will be electronic stores, fashion complexes and possibly even a Don Quioxte discount store - when that happens Japan department stores will truly have hit bottom.

* In 2009 department stores experienced negative sales including the top 25. Below are the top 10 and their percentage sales decreases.


1. Isetan Shinjuku -11.3%
2. Hankyu Umeda -6.8%
3. Mitsukoshi Nihonbashi -14.6%
4. Kinetsu Abeno -16.9%
5. Seibu Ikebukuro -5.4%
6. Takashimaya Osaka -12.5%
7. Takashimaya Yokohama -10.9%
8. Takashimaya Nihonbashi -11.6%
9. Daimaru Shinsaibashi -8.5%
10. Tobu Ikebukuro -8.1%

* Source Nikkei & Japan Department Store Association

Tokyo* Fashion Daily New Layout

With change comes new things and in this case the change is in the form of a new layout for Tokyo* Fashion Daily.  All comments are welcome.  I hope you like it and please enjoy!  Timothy

Japan is Black Gold for Diesel

In a strategy to further increase growth Diesel has separated Diesel Black Gold from their main Diesel line. With General Manager Andrea Baldo, a long-time Diesel veteran at the helm, Diesel Black Gold will target the "millenials", the next generation of customers. Using mostly Italian fabrics Diesel Black Gold will have a new logo and more competitive prices from around 20,000 yen up to 50,000 yen as well as a new advertising campaign. To further separate the brand Diesel will launch a new contemporary shop-in-shop concept worldwide, so look in Japan soon for Diesel Black Gold shop-in-shops and corners with a distinctive Diesel Black Gold decour.

FashionArtsTokyo

That is right, some more self-promotion.  One of my readers sent this to me today.  Even though it is from October 2009 it is still very relevant. 

Thanks you Paul McInnes of FashionArtsTokyo and the Japan Times for giving me an outlet to comment on Retail Fashion in Japan.

To see more of Paul`s excellent work at FashionArtsTokyo and my comment please click here.

Fast-Fashion Stocks Are Dropping Fast

We all knew the fast-fashion boom was not going to last forever as the once aspirational-luxury consumer and now price-conscious consumer is already starting to move away from low-priced merchandise and beginning to return to higher-end brands albeit not like before.

Investors are now dumping shares of Fast Retailing and other retailers of low-priced and affordable goods that until now helped prop up the retail economy. With Fast Retailing reporting a decrease in same-store comparative sales two out of the first three months of 2010, investors are now adopting a new trend and buying up shares of retailers of high-priced merchandise on the expectation they will rise from an economic recovery. This is already benefitting companies like United Arrows and Isetan Mitsukoshi Holdings Ltd. who yesterday saw their stock prices hit a year-high.

Did fast-fashion companies like their luxury predecessors oversaturate the market too quickly missing a unique opportunity in the fashion-retail economy to build a brand-bond with their customers and just exploit it for profit purposes?

I guess Uniqlo`s world domination of 1 trillion yen in sales by the end of 2010 and 4,000 stores worldwide by the end of 2015 just got a little further out of reach.

Uniqlo`s Weather Forecast: Winter is Cold

After Fast Retailing`s Uniqlo reported a 16.4% drop in March for Japan same-store-comparative sales, the market reacted by dropping Fast Retailing`s stock by 10.6%. This is the third time since 2009 Uniqlo has experienced a drop in same-store-comparative sales and each time it blamed the weather for lackluster sales, with this time a company representative blaming the sales decrease on the cold weather - well, it is winter. Not too worry though as the temperature rises so should Uniqlo`s sales.

Sales at Harry Winston Japan Still Down

As the rest of the world`s luxury economy slowly recovers from the prolonged recession on the back of the Asia market, Japan`s luxury economy is still lagging behind.  No where can that be seen more than in the sales of luxury jewelry and timepieces.  As an example Harry Winston has recorded sales increases in Asia of 52% at $26.9 million, excluding Japan where the only thing increasing is operating costs. 

With positive momentum still left over from the holiday season, sales in the luxury jewelry  and timepiece markets are expected to increase during 2010, as the U.S. and European markets recover and Asia and emerging markets continue to grow. 

The question is when will Japanese consumers start spending again and when they do are they still going to buy luxury jewelry and timepieces?

Uniqlo Sales Fall in March 2010

Fast Retailing`s Uniqlo reported a drop of 16.4% same-store-comparative sales in Japan for March 2010, with the cold weather as the main cause for the sales decrease.  This is only the 3rd time in two years Uniqlo has reported a drop in sales; July 2009 and most recently January 2010, with both previous times also being blamed on the weather.


Fast Retailing`s Uniqlo operates a network of 779 stores across Japan, as well as several international stores including their first store in Moscow, Russia opening this Friday in the top shopping center, the Atrium.

Demand for Luxury Goods by Region

According to a recent Bernstein Research report, Japan currently accounts for 12% of the world's demand for luxury goods while Greater China (including the mainland, Hong Kong, Taiwan and Macau) accounts for 10%.  Meanwhile Europe accounts for 39% and the Americas account for 29%.

Demand for Luxury Goods by Region

1. Europe 39%

2. Amercias 29%

3. Japan 12%

4. China 10%