LVMH looks to Japanese market for growth
The world’s largest luxury company, LVMH, is looking to the world’s second-largest luxury market for growth. Japan has seen an influx in tourism and tourism-related luxury spending this year, as large numbers of Chinese women take advantage of the weak yen and treat the country as an attractive alternative to Hong Kong for a luxury-buying spree. Add this to the country’s native luxury spending of $22.7 billion annually, and it’s easy to see why Sidney Toledano, chairman and CEO of LVMH Fashion Group, described Japan as “a strategic market for luxury”.
LVMH’s share price has appreciated by 7% year to date
SOURCE: Yahoo Finance
LVMH has 412 stores in Japan, spread out across its brands, and attributed 7% of its total revenue to Japan last year. The company is taking the country seriously, and last year marked the first time that LVMH – which has had a presence in Japan since 1987 – brought a cruise collection to its shores. Louis Vuitton’s chairman and CEO, Michael Burke, said at the time that the choice of venue “reflected both a thriving local market and Japan’s importance as a magnet for customers from neighboring countries.”
LVMH’s biggest move in Japan dates back to 2014. It teamed with Mori Building Co., Japan’s largest privately-held real estate development company to form part of a group developing the $777 million Ginza Six retail and office complex in central Tokyo. This shopping center houses a Dior flagship store as well as 9 other LVMH Maisons, including Céline, Fendi, Kenzo, Loewe, Parfums Christina Dior, Guerlain, Make Up For Ever, Fred and Moynat.
According to LVMH, the Giunza Six is expected to see 20 million visitors a year. Japan is already performing well for the company, but this might just be the beginning.
Dominion holds LVMH in its Global Trends Luxury Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.