LVMH is Placing its Bets on Japan, the World’s 2nd Largest Luxury Market

Tourism is booming in Japan as large numbers of young Chinese women (certainly banking on the weak yen) have taken to visiting the country, making Tokyo an attractive alternative to Hong Kong. Add to this the $22.7 billion-plus that Japanese natives spend annually on luxury goods, and you have the world’s number two luxury market behind the United States, and “a strategic market for luxury,” as former chairman and chief executive of Christian Dior Couture Sidney Toledano (who now holds the title of Chairman and CEO of LVMH Fashion Group) put it referring to the opening of Ginza Six, the luxury mall, last spring.

With this concentration of luxury spending has come increased attention by Western brands, which are investing in the Far East nation as a hotbed of growth. Among those leading the charge is LVMH, whose marquee brand, Louis Vuitton, took to Kyoto last June to stage an elaborate cruise collection show at the Miho Museum for international press, celebrities, and its most valued clients in the Far East.

The show marked the first time Vuitton has brought a cruise collection to Japan, where is has maintained a brick and mortar presence since 1987. As noted by WWD’s Joelle Diderich at the time, the choice of venue “reflected both a thriving local market and Japan’s importance as a magnet for customers from neighboring countries, said Michael Burke, chairman and chief executive officer of Louis Vuitton.”

And Louis Vuitton is not alone in targeting Japan as a luxury mecca. Christian Dior recently tapped Kiko Mizuhara, one of the country’s most famous influencers, as an ambassador for Dior Beauty. The model, actress, and designer, who Vogue has coined “as high-profile an ambassador for Japanese style as it gets,” is the first Asian ambassador for the brand, but this is certainly not its first effort to woo Japanese luxury buyers.

Reflecting upon the excursion in connection with its first-half fiscal report in July 2017, LVMH, the world’s biggest luxury-goods company, said that sales in Japan were boosted by promotional activity, including staging Louis Vuitton’s cruise show there. 

Last April, Dior descended upon Tokyo to stage a live show in the Japanese capital featuring the first haute couture creations by Maria Grazia Chiuri and the Dior Homme Fall-Winter 2017 collection by Kris Van Assche. The show coincided with the opening of the 5-story Dior boutique inside the Ginza Six shopping center and as LVMH revealed in its annual fiscal report for 2017, “Christian Dior Couture’s expansion in the coming years will be supported in particular by a new creative momentum and by the significant investments already made, especially in the Americas, China and Japan.”

LVMH’s most significant move, however, come in 2014 when the luxury goods conglomerate announced that it would team up with Mori Building Co., Japan’s largest privately-held real estate development company, to form part of a group developing the Ginza Six retail and office complex in central Tokyo, in what was described at the time as “a bid to cash in on expectations of increasing consumer spending leading up to and during the 2020 Olympic Games.”

In addition to Dior opening a flagship in the shopping center, which houses 241 stores, 9 other LVMH Maisons, including Céline, Fendi, Kenzo, Loewe, Parfums Christian Dior, Guerlain, Make Up For Ever, Fred and Moynat, have also opened up shop in Ginza Six.

The shopping center, alone, which cost 83 billion yen (approximately $777 million) to build, is expected to welcome 20 million visitors – both Japanese natives and tourists – each year, according to LVMH.

LVMH as a whole attributed 7 percent of its total annual revenue for 2017 to Japan, where it maintains 412 stores in Japan for its various fashion and non-fashion brands, which include Louis Vuitton, Dior, Givenchy, Celine, and Loewe, among other houses, as well as those that fall under its other categories, such as beauty, jewelry, and wine and spirits.