Luxury Brands Continue to Open More Flagship Stores in Area
This year it looks as though there is no end in sight for the momentum of luxury brands in the Ginza district. Excellent sales are being reported by the flagship stores opened in the area in the autumn of 2015, and luxury brands are beginning to capture new customers. The unexpected number of Japanese shoppers among these customers, beyond the expected inbound demand, is notable. The key to this momentum has been the large number of stores opened in the area that are befitting of a location like Ginza. These include stores that have the largest domestic retail spaces for their brands, as well as the first stores in Japan offering men’s goods. Stores will continue to open in the area this spring and beyond, and this trend should not be overlooked.
The growing number of new Japanese customers
Leading the rush of new stores was Brunello Cucinelli, which opened its doors in September 2015. Sales at this store have been excellent, reportedly “going according to plan”, and there has been a particular increase in the number of new Japanese customers. The high-quality everyday-wear pieces that Brunello Cucinelli specialises in are quite expensive, yet “a number of customers bought their clothes without even looking at the price”, suggesting that the company is capturing the affluent domestic market.
The number of male customers is also noteworthy. Particularly in September, men’s clothes, which usually account for around 30 percent of all sales, totalled 60 percent. It is reported that many of the sales were made by customers who frequently visit branches outside Tokyo and were visiting Ginza while on business trips. On the other hand, relatively few foreign visitors purchased Brunello Cucinelli products compared with other brands, and accounted for 20% of sales at the most.
Versace also reported a large number of new Japanese customers. In the month since its new store opened in December 2015, the brand’s sales have been greater than expected, with the number of Japanese customers actually exceeding the predicted number of foreign customers.
Of particular note here is the group of customers that was already familiar with the brand. The company seems to have benefitted from synergy with other group stores, as many of its new customers previously visited Versace Home, an interior goods store that opened before the new location in Ginza. Both stores saw many gift purchases towards the end of the year. As the brand was not present in Ginza until last year, it seemed like a fresh presence to many shoppers.
Brunello Cucinelli
Versace
Drawing customers in by creating unique stores
Many stores among those opened during the opening rush stood out as unique to Ginza. For instance, at the end of November Michael Kors opened its first store in the world to showcase every product category the company produces. Unique to the store is a display of Michael Kors’ ladies collection line and its second-line products. It also carries a wealth of watches and jewellery.
As the store is also the first in Japan to offer the Michael Kors men’s line, it drew in many couples and benefited from high demand for Christmas gifts. Customers from other stores also seem to have visited this store in search of unique goods.
Michael Kors
Many of the recently opened stores are the largest locations in Japan for their respective brands. This is true of all of the aforementioned stores, with each having three floors of men’s and ladies’ goods. The same can be said for the new Moncler store that opened in Ginza 2-chome. This large store stretches over two floors with a total area of 560 square metres.
Moncler did well to differentiate itself during its opening by debuting a new line ahead of its locations elsewhere in the world. This line was the Moncler Friendswithyou collection, which was created in collaboration with the hot Los Angeles-based art collective Friends With You. This collection was only available for the opening of the store on October 24 – 25.
The collection features humorous designs not previously carried by Moncler, including pop icons created out of penguin and cloud motifs. The “Festival” it created to showcase this line drew approximately 2,400 shoppers and celebrities and was widely talked about on social media networks.
Moncler
Moncler debuts its limited pop collection during the opening of its new store
Fendi, meanwhile, created a gigantic limited-edition store that was unlike anything the other brands were doing. The store featured numerous playful elements, including actors dressed up as popular Bag Bugs characters, giving the location the atmosphere of an amusement park. This store is slated to be open for one year, and will be closing at the end of December 2016.
Ginza also continued to see a number of large-scale renovations. Both Harry Winston at Ginza 1-chome and the Furla flagship store at Ginza 4-chome opened remodelled locations.
Fendi
The popular Bag Bugs attended the opening of Fendi’s new store
Current trends to peak over the next two years
The opening rush reflects the many business plans created to capture growth, alongside the rapid increase in foreign visitors that has occurred over the past two years. It seems that this trend will peak this year or next..
On March 31, Ginza will see the opening of its largest shopping centre, Tokyu Plaza Ginza, which will be accompanied by the opening of Bally, Kiton, Cruciani, Globe-Trotter, and other stores. Ginza Place, located at the Ginza 4-chome crossing, is also slated to open this summer.
It is also worth pointing out the number of duty-free stores that are opening in the area. Ginza Mitsukoshi is moving forward with plans to open a 3,300 square metre duty-free store in the spring, and Lotte Duty Free will open in Tokyu Plaza Ginza at the end of March.
This autumn, Cartier plans on remodelling its store, which currently takes up an entire corner of the Ginza 2-chome crossing. In addition, construction is scheduled for completion at the former Ginza 6-chome site, Matsuzakaya Ginza, at the end of January 2017 as part of the Ginza Redevelopment Project. It is expected that many luxury brands will set up shop at the new site.
Hitoshi Miki, President and Regional Chief Executive Officer of Richemont Japan Limited, stated: “Most of the land around Ginza is already occupied, but many of these sites host buildings that are either deteriorating or being renovated. I expect that we will continue to see the announcement of plans to open new stores.”
Booming demand brings about a rise in rents
Comments from a representative of CBRE, Inc.
Vacant spaces in Ginza remain few as a boom in real estate demand in the area continues. Against a backdrop of high stock prices and an increase in the number of foreign visitors, the market’s appetite for luxury goods has risen even further than before. For watch and jewellery retailers in particular, there appears to be a trend of expanding store locations into areas where few such stores previously existed.
Strong demand for retail space also persists on the quiet shopping street of Namiki-dori, with stores vying to attract established customers from the domestic market.
Two large-scale redevelopments will be underway at prime locations in the area from 2016 to 2017, and several rebuilding/development works are also ongoing. Behind the scenes, many tenants are making moves as rents continue their upward trend.