Thursday, August 9, 2007

Japan takes luxury to the next level

Article from the Miami Herald By TIM JOHNSON McClatchy News Service, August 4, 2007 The demand for 'hyper luxury' in Japan, a nation that consumes an astounding 40 percent to 45 percent of the world's production of luxury goods, is exploding. TOKYO--Japan's love affair with luxury goods thrives, to the point that some wealthy consumers now view $1,500 handbags as run-of-the-mill middle-class commodities. After all, even young women on Tokyo's subways tote Louis Vuitton handbags. The conformist society and rising wealth that shaped a luxury binge here decades ago have evolved. Newly wealthy Japanese display a streak of individuality, and major luxury retailers are scrambling to satisfy their yen for ''super luxury'' and to turn their stores into more exotic destinations. Flagship Gucci and Chanel stores in the Ginza fashion district have added restaurants and bistros with marquee chefs. Italian leather goods maker Furla maintains a yoga studio, and other marketers have installed cocktail lounges. Top brands now offer ''hyper luxury'' products, sold in hidden VIP rooms or displayed in exclusive members-only clubs. ALL THE FRILLS Luxury boutiques saturate Japan, a nation that consumes an astounding 40 percent to 45 percent of the world's production of goods that fall in the luxury category, from scarves and jewel-studded watches to perfumes and fine Italian and French wallets. ''The breadth and diversity of luxury brands here is incomparable to anywhere else,'' said W. David Marx, a Japanese consumer-market analyst at Diamond Agency, an advertising company. So as the luster wears from what was once luxurious, and the myth of widespread economic equality in Japan begins to shatter, retailers increasingly cater to a new class of super-rich who want to show off rather than conform. Mio Shimamura, a marketing director for Harry Winston, the high-end jeweler to Hollywood stars, greeted a visitor in a hidden VIP room designed for wealthy male customers in Tokyo's tony midtown. Doors swished shut electronically. A magnum of champagne stood ready. Dominican cigars beckoned from the humidor. ''The Japanese customer wants to buy something really, really luxurious,'' she began. ``They want to be treated like a celebrity. That's the next level of luxury in Japan.'' An attendant wearing a white glove displayed a jewel-encrusted watch at a relative bargain price of $50,000. Some items in the store sell for more than $1 million. High-end retailers such as Harry Winston pamper customers even after the sale. 'Many of the watch companies will take a small bunch of VIP customers to Europe. The trips include sessions on the craft of watchmaking so that customers gain the feeling that, `I'm more of a connoisseur,' '' said Radha Chadha, a coauthor of The Cult of the Luxury Brand, a book about Asian purchasing habits. In Tokyo districts such as Omotesando, shoppers come upon store after store of the world's most widely known luxury products. At the flagship Gucci emporium in Ginza, a greeter bows to all shoppers who stroll in, handing each a glossy directory in the trademark brown and gold of the Italian design house. On the fourth floor, the directory notes, the new Gucci Cafe can add ``a more luxurious element to your overall shopping experience.'' Indeed, a $7.50 cappuccino in the cafe comes with a meticulous sprinkling of cocoa powder on the foam in the shape of the distinctive Gucci logo. BIGGER AND BETTER Until early this decade, most designer brands displayed their wares in special boutiques within department stores. Then they began to break out into bigger and bigger flagship stores, some designed by world-renowned architects and costing more than $100 million. The Louis Vuitton flagship in Omotesando is built to resemble a shimmering version of one of the company's trademark traveling trunks. A rumpled reporter couldn't cadge an invitation to the store's special top floor. Little wonder: It's a members-only club, Celux. You must be recommended by a current member and pay an annual fee to join. ''You're greeted when you enter,'' said Nicole Fall, a trend consultant at Bespoke Tokyo who's visited the club. ``They have an ever-revolving display of new goods. . . . They will curate a selection of clothes and accessories for their VIP clientele.'' While VIP salons are common in some world capitals, Japan is a bit different. ''The size and scale of the VIP rooms is much bigger in Japan,'' Chadha said. ``They are designed in a way that no one knows they are there.'' Over-the-top luxury is often on display. Walk into the high-end Restir boutique, which has the look of a dark nightclub, and you see a single display case showing a black body sheath containing scores of shimmering crystals. Price tag: about $30,000. Even as luxury retailers cater to the super rich, many also extend downstream, keeping office women clutching designer bags. ''This is a new line, and it's called Never Full,'' Yukiko Sasaki, a 29-year-old public relations specialist, said of her big Louis Vuitton shoulder bag as she strolled through Ginza. ``I just bought it.'' A few luxury retailers -- particularly Louis Vuitton, with 48 stores spread across Japan -- have managed a transition to sustained growth, catering to the super-rich with new VIP rooms and specialized lines of products while appealing to the masses. Flipping through fashion magazines, with photos of young women in casual clothes and high-end purses, analyst Marx said: ``These Louis Vuitton products are mass products like Gap or Banana Republic products would be in the United States.''

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