RETAIL IN JAPAN; SEVEN-ELEVEN, DEPARTMENT STORES, AND BRAND-NAMES

RETAILING IN JAPAN

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19th century basket seller
Japan has a $1.28 trillion retail business, including $23 billion in direct door-to-door sales.

Japan has managed to keep major department stores and shopping areas downtown--rather than relying on suburban shopping malls--which have kept downtowns alive and prosperous. As of the early 2000s, there were only 1,600 malls in Japan compared to 40,000 in the U.S.

Underground malls are a fixture of Japan’s large train stations. The 80-year-old Sudacho Store underground mall at Tokyo Metro Kanda Station---believed to be Japan’s oldest underground mall---opened in 1932 a year after the station opened on the Ginza line and closed in January 2011.

Aeon is the largest retailer in Japan and Asia. It operates Jusco and MaxValue supermarkets. In 2008-2009 it had a profit of $17 billion on sales of $50.4 billion. Supermarket sales fell by 1.4 percent to a 22-year low of ¥12.37 trillion in 2010. It was the 14th straight year of decline and mainly the result of purse-tightening tendencies by consumers.

Large American-style outlet shopping malls are also being built and Cosco and Cosco-like volume, discount stores are catching on. One hundred yen shops and stores selling second hand goods and cheap clothing have done well even when the economy has not done so well.

During the economic crisis in 2008 and 2009, sales at the major department store declined in double digit figures. This was on top of declining sales for 12 straight years. Those that did the best were often times ones with supermarkets that drew a steady stream of customers buying necessities.

More and more supermarkets are offering online services and are devising ways to deliver goods efficiently.

Good Websites and Sources: Good Photos at Japan-Photo Archive japan-photo.de and japan-photo.de ; Retail Trends in Japan jetro.go.jp/en/reports ; Statistical Handbook of Japan Commerce Chapter stat.go.jp/english/data/handbook ; 2010 Edition stat.go.jp/english/data/nenkan ; News stat.go.jp ; Seven-Eleven Japan www.sej.co.jp ;Uniqlo uniqlo.com/us ; Vending Machines in Japan photomann.com/japan/machines

Links in this Website: JAPANESE STOCK MARKETS Factsanddetails.com/Japan ; JAPANESE COMPANIES Factsanddetails.com/Japan ; BANKS AND FINANCIAL SCANDALS IN JAPAN Factsanddetails.com/Japan ; TRADE AND OVERSEAS BUSINESS IN JAPAN Factsanddetails.com/Japan ; BUSINESS CUSTOMS AND PRACTICES IN JAPAN Factsanddetails.com/Japan

Changing Face of Japanese Retailing

The Economist reported in February 2011: “Yasunaga Kojima’s grocery shop, near Tokyo’s Tsukiji fish market, has been in business since his grandfather started it almost 100 years ago. He lives above it with his wife. Outside he sells ¥99 ($1.20) bunches of bananas and other fruit, undercutting even the discount convenience store across the street, which sells everything at ¥105.” [Source: The Economist, January 27, 2011]

“His customers, many of them pensioners, cherish such bargains. They come in, on average, twice every three days, and buy just enough to put together a few meals. Some economists consider such stores an anachronism, and blame small retailers for the meagre productivity of Japan’s service sector. But Mr Kojima’s store is no culprit. It is part of a 1,800-strong community of local co-operative stores harnessing the latest technology to win a retail war against the supermarkets.” [Ibid]

“The stores are part of a voluntary grocery club called Zen Nippon Shokuhin, which since 1962 has acted as a wholesaler to its “mom-and-pop” members. Zen Nippon does not simply buy and distribute goods. It also collects consumer data from its members, which it analyses to guide them as to what their customers prefer.” [Ibid]

“One of its models is Tesco, Britain’s biggest supermarket chain---which, ironically, is often accused of fatally undercutting independent local shops on its home turf. In 2009 Zen Nippon’s president, Mitsuhiro Saito, sent six employees to Oxford to learn about Tesco’s loyalty-card scheme. They were interested in how the firm uses data derived from the cards to understand not only what people are buying, but also how changes in lifestyle can affect shopping habits.” [Ibid]

“Peter Wray, a British retail consultant who advised Zen Nippon on Tesco’s loyalty system, says its approach sets it apart from the co-op industry internationally, which tends to analyse only what it sells wholesale. Since September Zen Nippon has used technology from an Israeli firm, Retalix, to introduce loyalty cards for shoppers that offer them electronic discounts on their most-purchased items. The information derived from this scheme enables Zen Nippon to bargain with brands for better deals. The programme started with 100 shops and will be rolled out to 1,000 by 2012. The Tsukiji store hopes to take part. Mr Kojima says that, with food prices rising, he wants to give his customers even more personal treatment. In one sense, this is all a bit circular. As Mr Wray puts it, Tesco mines its loyalty data to help it deliver to shoppers the personal attention they used to expect from a local store. In Zen Nippon’s case, the local store will use data to make itself even friendlier.” [Ibid]

“But in Japan it is a pioneering effort. In contrast to the high-tech nature of much of the rest of the economy, Japan’s supermarkets are technophobic and expect little change in shopping habits. This is myopic, Mr Saito believes, adding that one of the biggest supermarkets recently approached him for advice. Thanks to the new approach, Mr Saito says sales were ¥100 billion last year, a 20 percent rise from the doldrums six years ago that forced him to rethink his business. That performance is particularly impressive in a deflationary economy. On January 25th the Japan Chain Stores Association said that supermarket sales in 2010 fell for the 14th year in a row.” [Ibid]

Japanese Department Stores

Takashimaya is the largest department store chain in the Tokyo area. It was the 8th largest department store chain in the Asia-Pacific region in 2005 based on returns.

Department store sales fell 3.1 percent in 2010, the 14th consecutive year of declines. Sales totaled about $70 billion, the lowest since 1982.

Department stores have fallen on such hard times that some have suggested they might disappear completely. Four major department store operators recorded big drops in sales in 2008, with sales plunging more than 30 percent from their peak. Drops in sales have been blamed on cost-conscious shopping during economic hard times and competition from mass retailers that sell products such as clothing and home electrical appliances at much lower prices.

To survive department stores have launched aggressive and harsh cost-cutting measures and have begun offering lower prices to compete better with mass retailers. They have also been striking deals with fast-fashion brands like U.S.-based Forever 21, Japan-based Uniqlo and Sweden-based H&M to offer trendy clothes at lower prices in their stores.

The death of department stores could have a profound impact on local economies. Not only would the loss cause a large number of job losses it also leave big holes in what were often prime downtown or commercial areas, bringing less customers to the area and generating a negative impact on businesses there.

Mitsukoshi Department Store---a fixture of Ginza---underwent extensive renovation and expansion and reopened in September 2010. The overhaul not only boosted sales for the department store itself but gave a lift to all of Ginza.

Osaka-based Daimaru and Nagoya-based Matsuzkaya Daimaru and Matsuzakaya, two large department stores, are scheduled to merge in March 2010 to create Japan’s largest department store group The two department stores integrated their businesses in 2007. Matsuzakaya was the second largest department store chain in the Asia-Pacific region and Daimaru was the sixth largest in the region in 2005 based on returns.

Discount Stores in Japan

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department store in Kobe
More and more Japanese are getting into ba-gahn hunting at desu-kounto stores or outoretto (outlet) especially when there is a puraisa-offu (price-off) sale. At one discounter, Outlet Mall Rism, Burberry trench coats sell for $990 (normal price $1,100, American price $600), Tony Llama western boots go for $308 (American price $200) and Bula Snowboarders gloves can be purchased for $111 (American price $65).

The strong yen has meant that goods from abroad can be purchased at a cheaper price by Japanese . Bucking the trend of buying domestic products for the good of the country, many Japanese are looking out for themselves and buying cheap foreign goods. The opening of the bargain stores has been made possible by reductions of regulations that was largely brought about by American pressure.

These days Japan is full of 100 Yen stores (stores that specialize in selling items that generally cost less than $1) and discount hair salons (that offer haircut for $15 compared to the usual $40). Starbucks has also done phenomenally well, opening up hundreds of coffee shops that sell large of coffee for $3 as opposed to tiny cups for $5 as is the case at a typical Japanese coffee shop.

Daiei

Isao Nakauchi, a man who has been called the Sam Walton of Japan, pioneered Japanese discounting. He founded Daiei, which at its peak was Japan's biggest retailer with 365 discount stores where one could buy 40 cent cans of cola and other discounted items.

Nakauchi almost was killed in the Philippines during World War II when a shell landed next to him. "Luckily for me," he told the New York Times, "the American shells were manufactured in a slipshod way, just like current American autos, and many of them did not explode. I'm grateful to American military factories." He nearly starved in the Philippines jungles, surviving by eating lichens, insects and the leather off his shoe.

After World War II, Nakauchi made money in the postwar black market. In the 1950s, he transformed a drug store in Kobe into a major discount chain by under pricing the cartels that dominated retailing. He began by selling a few goods at prices at half the going rate and later sold everything from toothpaste to televison at cut rate prices. He is regarded as both an innovator that brought low price retailing to Japan, and a maverick who forced the big companies to bring down their prices.

Rise and Fall of Daiei

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camera store worker
Daiei grew phenomenally during the 1960s, 70s and 80s. Its stores opened everywhere. In 1972, 15 years after it was founded, it became the largest retailer in Japan. Its growth was fueled by easy credit from friendly banks. Nakauchi stressed volume over profitability in his quest to be Japan’s No 1 retailer. Much of his money was made by skyrocketing real estate values. He used his paper profits to secure loans and expand into hotels, pachinko parlors and convenience stores. He even bought a baseball team, the Daiei Hawks, and then built them a $1 billion stadium.

When the bubble economy burst, Daiei was crushed under a mountain of debt. But even then it continued to expand as it wielded a great amount of power over the banks that lent it money. The debt grew to $30 billion in 2000. By this time Daiei was facing increased competition from other discounters and its stores had become unimaginative and depressing. The clothes looked like cast offs from K-Mart. No one wanted to shop there.

In 2003, Daiei was Japan’s third supermarket operator with 63 supermarkets and 182 general merchandise stores. To keep from going under it sold the Fukuoka Dome and the Sea Hawk Hotel and Resort to the American real estate company Colony Capital for $1.8 billion and the assumption of $500 million in debts. Another $250 million in debts would be forgiven by Daiei and its main banks,

In 2004, Daiei received a bailout of $6.9 billion in the form of bank waivers, share write downs and fund from sponsor companies. It the third time in three years it got help and it considered rescue plans from Wall-Mart, Aeon and other retailers. At the time Daiei had assets valued at $20 billion and debts of around $10 billion, much of it in bad loans owed to UFJ. Only about a third of the stores were regarded as “attractive.” Daiei sought the bailout because its banks had refused to give it any more money to prop it up. Nakauchi sold all of his remaining stock. The Daiei Hawks were sold to the Softbank Corporation and became the Softbank Hawks.

In July 2005, Daiei posted a profit, thanks in a large part to debt waivers, and ranked No. 3 in retail sales. It returned to profit by closing money-losing stores and cutting the payroll. Daiei lost ¥27 billion in 2008, its first loss in four years.

Foreign Discount Retailers in Japan

Whole sale markets like Costco are gaining in popularity in Japan. Their main obstacle they have to overcome is that most Japanese refrigerators and homes don’t have space for massive volumes of stuff.

Initially Costco and France-based Carrefour drew large crowds of curious customers but often the store’s novelty wore off less customers came. Carrefour SA entered Japan in December 2000 by buildings it own large stored and getting goods directly from its own suppliers. Costco has opened stores in the Tokyo and Osaka and other cities. The jury is still out as to whether or not Japan can embrace discounted, bulk purchase buying.

Wal-Mart bought a 34 percent stake in the Seiyu department store chain for $421 million in December 2002 and is trying to turn the company around using methods that made Wall-Mart a success in the United States. Seiyu runs 404 Japanese supermarkets and department stores and 35,000 employees in Japan .

Wal-Mart took control of Seiyu in 2005. At that time Seiyu had a short-tern debt of $3.6 billion and annual net income of $4.6 billion and the stores were uninviting to customers.. Wal-mart remodeled stores and aimed to improve quality and freshness as well as keep prices low and spent more than $1 billion on improvements.

Seiyu improved under Wal-mart’s stewardship. Sales rose, losses dropped, employees and managers said headquarters more responsive to the suggestions and needs but sill the stores remained unprofitable. Seiyu continue to lose money in 2002, 2003, 2004, 2005, 2006, 2007

As of 2007, Seiyu’s value had declined by three-fourths since Wal-Mart began its investments. In March 2008, Seiyu shareholders approved an offer by Wal-mart to make the store a wholly-owned subsidiary of Wal-Mart. In October 2008, Seiyu announced it planned to close 20 stores, 5 percent of its total, by mid 2009.

Mom and Pop Stores in Japan

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small jewelry store
Small traditional shops accounted for more than half the retail employment, 12 percent of total employment and 5 percent of GNP in Japan as of the early 2000s. Many shops are two story building with the shop in the first floor and a home for the owners on the second floor.

The shops have traditionally been source of community cohesion. Shopkeepers chatted with customers and passed on gossip, helped organize festivals and were heavily involved in school and community activities.

Small traditional shops are notoriously inefficient. According to one survey they have a productivity rating of 33 percent compared to 93 percent for discounters, 88 percent for convenience stores and 70 percent for department stores.

Most neighborhoods used to have their own rice and sake shop, green grocer, butcher, traditional confectioner, pharmacist, small bar, fish monger. Many of these have disappeared and been replaced by hairstylists, coffee shops, boutiques, and more hair stylists.

In the old days singing bento vendors were fixtures of many neighborhoods, advertising their products with songs and shouts as they walked through crowded streets. On platform No. 5 of Orio station in Kitakyushu you can find one of the last singing vendors, Wearing a bow tie and the uniform of his employer, he sells bento boxed meals while singing in Japanese “Bento lunch, minced chicken rice, Orio’s specialty, made with affection, the most delicious.”

Competition and Mom and Pop Stores in Japan

As is the case in the case in the U.S., competition from other retailers is causing small Mom and Pop stores to close down. Competition first came in the form of trucks selling discount items, then came convenience stores and supermarkets. Now discount chains present the greatest threat.

Between 1982 and 1997, 20 percent of the small retail stores in the Tokyo area went out of business. Of those that were still open 70 percent say businesses was declining and 55 percent were owned by shopkeepers over the age of 60.

The Mom and Pop stores have particularly suffered since Japan began deregulation of the retail industry in the early 1990s and licenses, permits and regulations that kept competition at bay were removed.

Many stores continue to exist because of high tax penalties that discourage them from selling their property. Government loans and subsidies keep them in business. In many neighborhood shop spaces change hands many times.

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Japanese convenience store in North Korea

Convenience Stores in Japan

There are 40,000 convenience stores in Japan or about one for every 3,000 people. To bring in new customers, they sell pre-stamped New Year's cards and lottery tickets and allow customers to pay their phone bills and buy concert tickets. Computers are utilized to pick out hot products for certain times of the year.

There are eight major convenience store chains in Japan. No.1 7-11 is 51 percent owned by Ito-Yokada supermarket chain and has over 10,000 stores. No. 2 Lawson’s, an affiliate of Mitsubishi, Japan’s largest trading company, and has 7,700 stores and No. 3 Family Mart has 6,045. [2003]

A typical convenience store in Japan sells between $6,000 and $7,000 worth of stuff a day. Japanese convenience stores have postal and banking services, sometimes providing their services in place with no banks or post offices. In an effort to promote their civic mindedness in the face off efforts to close their 24 hour operations to save energy convenience stores have touted themselves as places where women seeking to escape from stalkers and children can seek safety

Between 1991 and 1999 the number of convenience stores increased about 1.5 times and sales increased 9.3 percent. Convenience stores sold more than department stores in 2008. They were given a big boost from customers buying cigarette because of a new inconvenient ID system used on cigarette vending machines and generally fare in bad economic times when people cut back in discretionary spending which they are more likely to do at department stores.

Convenience stores performed well in the economic crisis in 2008 and 200. Lawson posted record profits in 2008 of $2.5 billion. Other convenience stores such as 7-11 and Family Mart also record strong sales during the same period

Family Mart now has more shops outside Japan (7,598) than in Japan (7,581). The company opened its first store in Taiwan in 1988 and now have 4,419 outlets in South Korea. 2,376 in Taiwan and 546 in Thailand. They even have a couple stores in North Korea.

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7-11 outlets in Japan

Seven-Eleven in Japan

Seven-Eleven is the largest convenience store chain with 11,800 stores in Japan in 2007. There are more Seven Eleven in Japan than in the United States. Its strengths are logistics, marketing and using a custom-built information system to monitor tastes and trends and quickly respond to them. The first 7-11 appeared in Japan in 1974.

Seven & I Holding is largest retailing group in Asia. It oversees Seven-Eleven and Ito-Yokado supermarkets, Asia’s second largest retailer, in Japan. The American convenience store chain 7-Eleven is owned by Japan's Seven & I Holdings. Seven & I also runs Sogo and Seibu department stores in Japan.

In February 2005, Japan’s Seven-Eleven announced it was going to gain control of U.S. 7-Eleven. Japan’s Seven-Eleven said it would buy 49 percent of IYG Holdings, the holding company for U.S. 7-Eleven, from listed company Ito-Yokado bringing its control of U.S. Seven-Eleven to 73.8 percent. The combined cost of the acquisition was around $1.2 billion. In December 2005, the company announced plans to acquire Millennium Retailing, the holding company for Seibu and Sogo department stores, creating fifth largest retailing group in the world by market value.

In June 2006, a big deal was made about an order by 7-11 management to its stores to stop selling discount bento boxes. Stores that engaged in the practice said that if they didn’t sell the discounted meals---usually marked down before their expire dates are reached---they would have throw the items away. Some stores throw trash bags filled with meals with expired dates and lose lots of money. Japan’s Fair Trade Commission said that 7-1 management couldn’t make such an order. In August 2009 Seven-Eleven Japan said the sale of bento meals and other food products close to expiration date at discounted prices was okay.

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Vending Machines in Japan

Vending machines are everywhere in Japan. Not only can you buy candy, juice, cigarettes and soda pop you can also buy hot coffee in cans, cold beer, rice, milk, bottles of scotch, batteries, compact discs, software, panty hose, condoms, beetles, eggs, pornography and even cars. Some offer manicures. Others sell stag beetles, used panties and pearls ranging in price from $39 to $235. Perhaps one reason they are so many is due to the low crime rate and lack of concern about break ins. Teenagers who want to get drunk might consider moving to Japan instead of using a fake ID.

According to the Japan Vending Machine Manufacturers Association there are 5.5 million vending machines, including those that sell ticket, in Japan. There is about 1 vending machine for every 20 people in Japan. About 2.6 million of them sell soft drinks.

New vending machines offer fresh sushi; warn buyers if certain good haven’t been properly warmed up yet; dispense drinks in cups provided by the user; talk to customers; offer drinks free of charge after earthquakes; scan customers with a camera and tell them what make-up they need; and tel customers the Japanese equivalent of “Have a nice day” or “Sorry, I have run out of change” in the Osaka dialect. There are vending machines at museums that dispense miniature art works.

Brand-name-mania in Japan

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Luis Vuitton in Roppongi, Tokyo
Chanel, Ferrgamo, Prada, Versace, Burberry, Gucci, Hermes, Luis Vuitton have made billions from selling stuff to Japanese tourists in Europe and the United States and from shops and department stores in Japan. Japanese account for 40 to 50 percent of the worldwide sales of $55 billion luxury good market, which includes watches, handbags, shoes and other items as well as clothes. Even Japanese teenagers think nothing of forking out more than a thousand dollars for a designer label handbag. Carrying around a shopping bag for a famous designer brand is in itself regarded as a sign of status.

The luxury goods market in Japan is estimated to be worth around $20 billion. Worldwide Japanese shoppers account for about half of the global luxury goods market. One survey found that 40 percent of Japanese consumers owned a product by Louis Vuitton, whose parent company LVMH earns 10 percent of its revenues from Japan. There are twice as many Prada, Hermes and Burberry stores in Japan as there are in United States even though Japan has half the population of the United States.

More luxury goods are now sold in China than in Japan.

Japanese consumers were responsible for bringing back the Burberry raincoat and the Louis Vuitton suitcase and have kept buying the stuff even when economic times were bad. Between 1994 and 2001, while Japan was mired in a recession and Japan's GDP dropped 20 percent, the sale of Louis Vuitton products increased from $36 million to $863 million. In 2001, when unemployment and bankruptcies reached an all time, people formed lines out new Hermes, Armani and Prada shops that had difficulty keeping up with demand.

The popularity of foreign designers has caused some Japanese designers to lose lots of business and even go bankrupt.

By the early 2000s, the luxury good market was declining as consumers turned from Hermes, Prada and Rolex. By then they were seen as a cliche and something people owned to give the impression they were wealthy. In 2003, sales dropped by a third from a peak of $10.8 billion in 1996.

New Brand Name Shops in Japan

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Armani building in
Shibuya, Tokyo
In December 2000, Burberry opened it first major store outside London in Tokyo Ginza’s district. In 2003, Prada and Ferragamo opened stores in Ginza. The Hermes store in Ginza was designed by Renzo Piano, the architect know best for designing the Pompidou Centre in Paris. The fashionable Omotesando district has become dominated by foreign designer label stores. Gucci and Chanel have stores here.

Louis Vuitton opened its first store in Japan in 1978. Sales in Japan topped $1.4 billion in 2003, accounting for one third of the company’s sales. Even though prices at the Louis Vuitton store in Ginza are 50 percent higher than those in Paris customers still come in droves. As of 2003, there were 47 Louis Vuitton branches nationwide.

Armani has poured a lot of money into Japan. The flagship store in Ginza is one of the most expensive ever with Armani personally designing a special line of bags and clothes for it. Japanese formed a line around the block to buy handbags at the flagship store when it opened.

Abercrombie & Fitch is the latest popular brand in Japan. Long lines formed when it opened a flagship store in Ginza in 2009.

See Tokyo

Before European designers opened shops in Japan, some Japanese made a living by flying to foreign countries and buying up brand name goods and bringing the stuff back in their suitcases, hoping that customs wouldn’t take peak and charge them duty, and selling the stuff in Japan.

Roko Shira in Ginza and Komeyo in Nagoya are shops that specializes in selling second-hand designer bags. The offerings include a used Chanel bag for $1,759, a used Luis Vuitton bag for $1,366 and a used Hermes bag for $5,919. The bags are often in mint condition with the most expensive ones stored behind glass and handled by sales staff with white gloves.

Japanese Schoolgirls and Designer Goods

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How so many Japanese school girls get their hands on enough money to buy Louis Vuitton bags, Chanel perfume and Prada handbags is still kind of mystery. One girl told the Los Angeles Times, "Girls in my school tend to be split up into the girls who have things and the girls who don't. If you have brand-name things, you're important."

Some schoolgirls reportedly prostitute themselves or rent themselves out to salarymen through phone dating clubs to earn enough cash to buy designer stuff.

Schoolgirls and Sex

Japanese Fashionistas

Japanese fashionistas are often teenagers or people in the 20s who live at home and spend a considerable portion of the money they get from allowances and part time jobs on fashions. They often spend $500 to $1,000 a month on clothing and acessories.

Most fashionistas are girls. The main base for them in the early 2000s was 109, a ten-story building filled with small shops with the latest in trendy clothes. Boys generally are not welcome. Many of the clothes are designed by D.J.s and musicians and have tie ins with local punk and alternative rock groups. There is an entire floor for girls between 12 and 15.

The Egoist is another store popular with teenage girls. It popularized trends like the “Rodeo Girl” and “Sexy and Boyish.” There even the salesgirls have became fashion icons with their own followings.

In recent years, the fashion market for female betweenies (girls aged 9 to 14) has soared as young girls became more fashion conscious and their parents, grandparents and other relatives have become more willing to indulge them. One clothesmaker told Reuters, “Mothers now take pride in having cooly dressed daughters, their little princesses.” This is far cry from the old days when children wore hand-me-downs and the equivalent of Sears fashions,

In the Los Angeles area you can find girls that were school girl uniforms and loose socks, Gwen Stephanie use “Harajuku girls”---three Japanese girls in Tokyo street fashions---in her stage show and the video for hit I Ain’t No Hollaback Girl.

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Japanese fashion magazines

Decline of Luxury Brands in Japan

In recent year there has been a trend away from luxury goods. Customers carrying bags of cheap stores such as Uniqlo are now a more common sight than ones with bags for luxury retailers. When Sweden’s discount fashion retailer H&M opened a shop in Tokyo 5,000 people waited in line. In Ginza, a Gap moved into a space vacated by Louis Vuitton and Los-Angeles-based Forever 21 now occupies a spaced sued by Gucci. Sales of luxury goods in Japan fell two percent in 2007 and seven percent in 2008.

Brian Salsberg of McKinsey & Co. said there are several reasons fore this: 1) shoppers are mixing and matching lower end goods with higher end ones: 2) high end products face competition from things like travel and dinners at expensive restaurants; and 3) people with money these days are as attracted by fancy high-tech products as they are by well-made ones.

One 20-year-old girl at the 109 mall in Shibuya told Atlantic Monthly, “I’ve never bought anything from a luxury brand...If I bought something from one of those brands I’d probably spend a fortune on it and a year later it would be out of fashion anyway.”

The decline is partly the result of economic hard times and fashion weariness. A representative for Chanel told the Atlantic Monthly, “Japanese were like a sponge. We absorbed everything and got wrung out. We’re not going to absorb the same as we used to...Today its not about how much money you have. It’s about expressing your own personal style.”

Image Sources: 1) Visualizing Culture, MIT Education 2) 6) Wikipedia 3) 5) Ray Kinnane 4) tadashiyanai site 6) 7) 7-11 8) Doug Mann, Photomann

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

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© 2009 Jeffrey Hays

Last updated August 2012

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