Coach Kristin Leather Hobo Bag | Source: Coach

TOKYO, Japan — In the United States, the Coach Kristin Leather Hobo bag retails for $298. In Japan, the same bag costs $711 (¥59,850).

This disparity in pricing is not unique to Coach. Premium and luxury fashion brands based outside Japan have long charged Japanese consumers a significantly higher price than in other markets for the same goods. But today, due to a strong yen and greater visibility of global pricing thanks to the internet, Japanese consumers are growing weary of this systematic markup.

As Mariko Sanchanta notes in a recent Wall Street Journal piece entitled “Web-Bargain Luxury Comes to Japan,” Japanese consumers are becoming accustomed to “discounts” at outlet malls and online sales, which, ironically, make prices equivalent to what much of the world pays at standard retail.

So why is it that premium and luxury brands have been able to charge nearly double for their products in Japan — a practice which on the face of it looks like price gouging?

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Abercrombie & Fitch, Ginza | Source: Fashionsnap.com

TOKYO, Japan — After several years of “will they or won’t they” speculation, American casual fashion retailer Abercrombie & Fitch finally opened its first retail store in Japan this past December. The 11-story shop in Tokyo’s upscale Ginza neighbourhood is just steps away from Uniqlo’s flagship store and Swedish fast fashion brand H&M.

As with every big retail opening in Tokyo, the first day of sales saw long lines of customers and swift business. The rumoured haul: ¥50 million (or about $550,000). Even without the benefit of an opening party or major press event, Abercrombie was able to rely on a small group of Japanese fans who had previously bought the brand’s products as souvenirs on trips to Hawaii or the continental United States.

But the big question is, will Abercrombie be able to win over new fans in Japan and replicate the unbelievably successful Japanese market entries of other mass fashion brands?

So far, the signs do not look good.

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The colours of Uniqlo | Source: Uniqlo

TOKYO, Japan — For the last two years, the inverted black triangle — Japan’s version of the minus sign — has infected monthly earnings reports at most of the nation’s retail chains. The global recession has been almost universally bad for the apparel market. Japanese customers are just not spending on fashion like they used to.

There’s one exception, of course: Uniqlo. 

For the fiscal year ending in August 2009, Uniqlo’s parent company Fast Retailing posted a ¥108.6 billion profit with ¥685 billion sales — outperforming initial projections. The brand’s comparable store sales for September 2009 were up 31.6 percent. In October, they were up 35.7 percent.

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Prada flagship store in Omotesando, Tokyo

LONDON, United Kingdom — The scariest news I have recently read about luxury was in Tuesday’s Financial Times. The Japanese, it seems, have stopped buying luxury goods. Luxury imports in Japan were down 10 percent and sales of LVMH in the country were down 18 percent in the first quarter.

And no, it’s not just the recession. “This is not a blip. This is a long-term shift in the market,” Brian Salsberg, the author of a McKinsey report on the Japanese luxury goods market, the world’s second largest, told the Financial Times. This is concrete evidence of a trend first reported on BoF one year ago.

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Somarta A/W 09, courtesy of Coutorture

TOKYO, Japan — Japan Fashion Week (JFW) is nearing its end, but has anyone really noticed that it started?

While the entire cities of Paris, Milan, and New York seem to get completely swept up in the glamour of their respective fashion weeks, the average Tokyo citizen is most likely unaware that Japan Fashion Week is currently happening. This is very odd, considering that Tokyo is obsessed with designer fashion to an extent seen nowhere else on Earth.

Why the lack of excitement?

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