WORLD> Asia-Pacific
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WORLD> Asia-Pacific
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Economic woes cramp style of Japanese luxury shoppers
(Agencies)
Updated: 2008-10-20 10:17 Young Spenders The downturn has also erased another much-cited Japanese phenomenon, the so-called "parasite singles", young professionals living with their parents who would spend all their money on Louis Vuitton wallets and Chanel bags.
After the decade-long 1990s recession and the bursting of the technology bubble in 2002, Japanese companies fired employees and hired temporary workers, drying out the young spenders. "Now, many young people are on short-term contracts. Their income is low, so they have to live with their parents and their spending is very low," Kato said. Luxury firms used to love Japan for its broad consumer base with a traditional fondness for quality, craftsmanship and the ability to blend in by wearing certain brands. At France's Hermes, Executive Vice President Patrick Albaladejo said in September that his business had suffered with Japan's soft economy because many of his customers were middle-class consumers. His solution: focus on Japan's next-door neighbour, China, and on the super-rich. "We expect to see very, very solid growth in our existing stores in China," he said at the time. As Japan's middle crumbles, many other luxury executives turn their attention towards the very top, and towards the island's neighbours. But they too are not immune to the global economic gloom. In Hong Kong, retail sales in August grew 3.9 percent by volume from a year earlier, the weakest growth in 16 months, though stellar compared to Japan's 0.7 percent rise for that month. Over the past couple of years, brands such as Armani, Bulgari and Gucci have opened huge, glamorous Tokyo flagship stores complete with restaurants and even a spa, hoping to attract wealthy fashionistas from all over Asia. They are also aggressively targeting the one domestic class that is still spending: the new rich who have emerged in sectors such as information technology and like to show off their wealth. Elite buyers can be seen at the Louis Vuitton boutique in the Roppongi Hills complex, which houses the Japanese headquarters of Goldman Sachs and the apartments of several billionaires. |
