Update on Japan’s luxury market

Isaac Mostovicz writes...

Retail sales in Japan have plunged in the biggest drop in 13 years. According to the latest data by the trade ministry, sales fell by 8.5% last month compared with March 2010. This data shows the affect that the disaster has had on consumers. Symptomatic of an uncertain economic future, consumers have avoided non-essential spending, such as luxury items and consumer electronics.

However, in the luxury sector, optimism is abundant. Dior’s Chief Executive has joined other executives from top luxury brands in the belief that Japan is on the mend. Christian Dior told Reuters that luxury goods sales in Japan are improving and are likely to recover to a normal level.

The earthquake and subsequent nuclear power station crisis hit sales in Japan by 25 percent in March 2011, according to luxury goods company LVMH. Burberry is another brand that has shown confidence, despite their stocks taking a 4% knock after the earthquake. Japan is the third-largest market for luxury goods globally, after the US and China.

Yet despite these luxury houses having no fear about their future success in Japan, it is likely that this attitude of careful spending may remain in Japan for a long time – not only as a precaution, but also as a consequence of a terrible disaster putting into perspective what luxury can really mean to the individual.

tiffany silver says of this article...

Yet despite these luxury houses having no fear about their future success in Japan, it is likely that this attitude of careful spending may remain in Japan for a long time – not only as a precaution, but also as a consequence of a terrible disaster putting into perspective what luxury can really mean to the individual

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