The gleaming flagship stores of Louis Vuitton, Chanel and Gucci in the Ginza district of central Tokyo are no one’s idea of discount outlets. They were designed by top architects and offer sumptuous displays of luxury goods in Japan’s most expensive patch of ground. But they have been filled with bargain hunters in recent months — Chinese tourists who have flown to Japan’s capital to buy items more cheaply than at home.
The yen’s weakness has provided an opportunity for those who would once have shopped in mainland China, or acquired clothes and accessories in Hong Kong or Europe. China’s aspirational consumers, who have helped to drive the growth of the global luxury industry in the past two decades, are watching their money carefully. The fragile domestic economy has made them more cautious and they have pulled back from a surge of “revenge shopping” after lockdown.
The Asia-Pacific sales of brands such as Burberry and Gucci have fallen sharply outside Japan. The broader fall in luxury consumption has come as a shock to an industry accustomed to attaining ever greater heights, apart from in its pandemic slump. Gucci’s parent company Kering has been hit particularly hard by the change in mood: Its shares fell by 8 per cent on Jul 25 (Thu) after it warned that operating income could decline by up to 30 per cent in the second half of this year.
This pushed the value of Kering, which also owns brands including Yves Saint Laurent and Balenciaga, to a seven-year.