Japan gets back on its feet

di Fabio Gibellino

Following the crisis and the tsunami, growth is once again being recorded in the Land of the Rising Sun, a key luxury market. The race is on to generate 19.5 billion euros in the top-of-the-range sector by the end of 2012.

Japan gets back on its feet
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Once upon a time there was Japan, the largest and most prestigious theatre dedicated to the world of luxury. All designer labels wanted to play a leading role on the Japanese stage. And so it continued for decades. Year after year, the Land of the Rising Sun churned out record growth, supported by a relentless economy and a culture extremely attuned to the concept of beauty and quality production. Unfortunately, like all good things, this was also destined to come to an end. In 2005, the Japanese economy began to go into a tailspin, the country failed to withstand the global crisis in 2008 and, as if this were not enough, a massive earthquake struck in Tohoku on 11 March 2011, followed by the tsunami which destroyed the Fukushima nuclear power station: this was the final blow. Japan was no longer the largest and most prestigious theatre in the world. By a twist of fate, it had been supplanted by its great historic rival: China. On a superficial note, the story could end here with memories of what used to be. Indeed, following a sequence of adversities worthy of Voltaire, any country in the world would have taken years to recover. However, this is not true of the country of the samurai. “Japan has displayed an incredible, emotional, psychological and reconstructive reaction on a general scale. It has managed to repair the damage caused by the tragedy within a very small space of time, so that things are now the same or even better than before,” explained Armando Branchini, secretary of Altagamma. And there is more: “After everything that had happened, we expected a very negative impact on the market, but instead things have gone much better, and just three weeks after the tragedy sales recovered immediately.” This unexpected reaction was sustained over time: “By the reconstruction investments which had a Keynesian effect, stimulating sales and rewarding excellence.” The Japanese mind-set is one of rigour and discipline, in which the concept of emotion must be kept very private and must never exceed the limits established by common sense. A good example of this is the attitude displayed by one of Japan’s most important fashion houses, Issey Miyake. “The first anniversary of the earthquake has given us the time to reflect upon and applaud the spirit and courage of the Japanese people in their reconstruction efforts. Issey Miyake has concentrated on supporting all our production partners in Japan, because we want to protect and promote traditional trades, and to bring them to the attention of the global market,” explained Tempe Brickhill, president of the Japanese label’s European division, which is one of the leading players on the French scene. Moreover, the Japanese response was one that could not fail to arouse admiration. “The post-tsunami period provides an example of this country’s strong will and ability to react. Very few peoples have succeeded in displaying the determination and capacity for recovery demonstrated by the Japanese after this catastrophe,” added Gianluca Brozzetti, Managing Director at Roberto Cavalli. However, we are not talking about a normal country here, but about an archipelago just a little larger than Italy, but with more than twice as many inhabitants, and a country which is still actually the second highest valued market in the luxury sector, with its 17.3 billion euros generated in 2010 (source Altagamma) second only to the 46.5 billion of the United States. And this is from a country with just over one third of the US population and one tenth of China’s population. Therefore, crisis or no crisis, Japan is not only an important marketplace, but a fundamental one for the luxury balance sheets. This is especially true if we consider that the projections for 2011 (the official data will be available in the autumn, ed.) indicate growth to 19.1 billion euros, partly sustained by favourable exchange rates, while the forecasts for 2012 speak of a further 2% growth to reach 19.5 billion euros, coming close to the golden year of 2006, when the Japanese top-of-the-range segment was worth 22.2 billion euros. The big names are therefore taking another look at that great stage. Chanel has already done so, making Tokyo the capital of its initiatives, beginning with a fashion show of the items from its latest Parisian haute couture collection, followed by the opening of a pop-up store and, lastly, by a six-week exhibition on its historic tweed jacket. “2004 was the last time we held an important event for this market that has proved so loyal to us,” stated Bruno Pavlovksy, head of the fashion division on Rue Cambon. “This is certainly an area we really believe in and in which we intend to invest a lot more energy in order to grow even further.” And while this Parisian fashion house has demonstrated its ongoing belief in Japan, Comme des Garçons has also opened two new shops in the capital: the Ginza Komatsu Market, a seven-storey megastore with floor space of 32,000 m2 and a smaller shop (4,500 square metres) in the Marunouchi business district. These are the first in a series of new showcases to be opened in all the most important cities in the country, ready to display the conceptual design developed by Rei Kawakubo and Adrian Joffee, key figures in a group that brings together two big names in Japanese style: Comme des Garçons and Junya Watanabe. Naturally, Italian labels have not just been looking on, particularly those that, for one reason or another, do not have a historically established position on the market. “Versace is in the start-up phase in Japan, therefore our performance on the Japanese market can only be one of great growth. The Japanese economy as a whole, and the luxury industry in particular, have had to deal with a difficult situation but I would say that now, with the exception of the northern region, the rest of the country is gradually returning to the levels prior to the catastrophe,” added Gian Giacomo Ferraris, Managing Director of Versace. “For us, Japan is a relatively new market, where we launched the first Roberto Cavalli line just three years ago. Moreover, we opened our first flagship store in Tokyo last November and, just a few months on from the opening, we are recording very good results. In substance, this remains a strategic market for us, which still has much to offer,” added Brozzetti. And so, for the fashion house which features the Medusa on its label: “Versace’s presence on the Japanese market was insufficient for the standing of the brand and the previous management had rightly decided to withdraw. In January 2011 we returned, because it is obvious that a global brand cannot remain outside one of the most important markets in the world. We are now present on a retail and a wholesale level and we are looking for the right opportunity to open a freestanding shop in the heart of Tokyo,” clarified Ferraris. This is more or less what happened with Roberto Cavalli. “It’s still too early to be able to talk about Japan’s percentage incidence on our figures, although we have made a significant investment in this market, which we consider to be strategic, by opening the Roberto Cavalli Japan branch, owned entirely by the group,” clarified Brozzetti. “Our strategy is therefore to continue to grow with the first Roberto Cavalli line, both through our new flagship store, and through the presence of a series of shop-in-shops in the main department stores. In keeping with this strategy, in February 2012 we opened our fifth shop-in-shop in Isetan, a department store in Tokyo, which immediately registered excellent sales results. Moreover, we have developed an intense trunk show programme in partnership with the most important department stores in the country and we are present with Roberto Cavalli products in over 20 prestigious multi-brand stores. Lastly, with Staff Japan, the Japanese branch of Staff International, licensee for designer contemporary Just Cavalli, we are developing our brand’s presence in the younger market and the casual market, and over the course of 2012, Coty Inc, our licensee for perfume, will be launching the new Roberto Cavalli pour Femme fragrance in Japan.” Versace also has major plans for development. “We hope to reintroduce all the group labels and lines. Some of them have never been available in Japan before, and we have specific and dedicated strategies in place for each of them. But that which is most pressing is a flagship store,” specified Ferraris, “because Japan is one of the most important markets in the world and we are focused on acquiring a significant portion of it.” In the meantime, home-grown Japanese style is also continuing to look to the future despite the problems. During Paris Fashion Week the great masters of the Land of the Rising Sun dominated the scene, from Yohji Yamamoto to Comme des Garçons, Junya Watanabe and Issey Miyake, without forgetting the up and coming ranks (first and foremost Limi Yamamoto, daughter of Yohji and the woman behind the Limi Feu label, ed.) or Sacai, the new entry designed by Chitose Abe. Tokyo is also focusing on growth on the fashion front with its fashion week. Held from 18 to 24 March, it featured 39 designers on its catwalks, with names ranging from Yuima Nakazato to Hiroko Koshino, Somarta and Matohu, as well as Yoshio Kubo, Motonari Ono, Araisara, Yasutoshi Ezumi and Mintdesigns. However, in order for Japan to truly go back to what it once was: “A Monti-style solution would be needed, because the very high public debt problem is a crucial issue that no government to date has wanted to tackle for electoral reasons,” concluded Armando Branchini. That said, in consideration of the Japanese passion for European style and the strong will of the Japanese people, it may be that the Land of the Rising Sun is yet to reach its zenith.