Versace are withdrawing from the Japanese market with the closure of its last three stores in Tokyo, Osaka & Chiba and liquidation of the Japanese business by the end of the year. This isn’t a permanent move however, its more because the Versace boutiques no longer represent the brand image and they feel its better to clear the slate and start again with the right locations, distribution channels & product range for the contracted Japanese market. They expect to be back in Japan next year either in a wholesale capacity or with new stores, depending on how the new strategy emerges.
The market for luxury imported goods contracted 10 percent in 2008 from the previous year, according to Yano Research Institute Ltd and is expected to contract almost a further 10percent this year. Versace Japan had sales of 1.6 billion yen in 2008 compared with 4.1 billion yen four years ago, according to Teikoku Data Bank, so certainly something needed to be done and a clean slate is a sensible strategy.
Given sales at the likes of Uniqlo it seems obvious that Japan’s focus has shifted to “cheap chic” and its brand name obsession is seriously dented if not over. Many analysts believe that Japan has permanently moved away from luxury brand names or at least that this trend will continue in the long term with no real light at the end of the tunnel for Japan’s economy.
