Interesting report from McKinsey.
Japan’s trend-chasing office workers and ladies who lunch are giving up Louis Vuitton handbags and Chanel jackets for Zara dresses and Gap jeans, making what was a favourite market for luxury manufacturers into one of their biggest headaches. The downturn is forcing customers in Japan to scale back purchases of luxury goods, accelerating a long-term shift in consumer attitudes, according to a report by McKinsey, the consultants. “This is not a blip. This is a long-term shift in the market,” said Brian Salsberg, the author of a McKinsey report on the Japanese luxury goods market, the world’s second largest. Sales of imported luxury goods suffered a 10 per cent drop last year to Y1,064bn ($11.1bn), according to a study published on Tuesday by Yano Research, a Japanese market research group. Yano Research forecast that the market would shrink further this year, falling below Y1,000bn to nearly half the peak of Y1,897bn in 1996 and then shrinking to levels last seen 20 years ago before it entered its era of strong growth. – From Financial Times