Despite Disaster, Retailer Opens New Store in Japan
The global luxury market has taken a significant hit since disaster hit Japan two weeks ago. MF Global estimates Japan represents 23 percent of the world market for high-end goods, and as a result, luxury retailers like Tiffany are lowering sales expectations by 15 percent for the region.
But, in an unusual move this week, high-end women's apparel brand Rebecca Taylor decided to push forward with the opening of just its fourth free-standing store—in Tokyo's Harajuku district.
Rebecca Taylor CEO Beth Bugdaycay says the decision to go ahead with the opening of the Tokyo store was two-fold. "We wanted to really send the message to our loyal customer base that we believe in Japan, and we believe in their resiliency, I think they have proven to the world time and time again, that when faced with adversity and conflict they bounce back faster and better than alot of other cultures," says Bugdaycay.
The brand has been available in Japanese department stores for the last ten years, but the push to open the free-standing stores originated as part of the brand's expansion plans accelerated by its acquisition by Kellwood Company, parent of Sun Capital, in January of this year.
This week's Tokyo store opening marks the second store opening this month for Rebecca Taylor, bringing its global total free-standing locations to four from its previous two locations in New York City's NoLita and Hong Kong.
Bugdaycay says the freestanding store in Tokyo allows the brand to expand its demographic reach. "In the last three to four years, the demographic shopping department stores continues to get older in Japan, and so we needed to be able to reach our younger customer base, and so opening up the free-standing store will allow us to do that, especially in Harajuko. When you think of Japanese youth you think of Harajuko."
Tiffany counts on 18 percent of its sales from Japan, and has re-opened most of its stores in the region. Twenty percent of Coach's direct sales comes from its Japanese stores, and the company tells CNBC "while vast majority of its 165 Japanese locations are open, we cannot predict when all of our stores will re-open and when regular operations will resume." H&M re-opened some of its flagship Tokyo stores Thursday, with plans to open its other locations in the region soon.
Rebecca Taylor acknowledges opening a retail store in the midst of a disaster could garner mixed feelings with consumers, and is only opening its new Tokyo store for just 2 hours a day. Bugdaycay says Rebecca Taylor's short-term business outlook in Japan is uncertain, but asserts long-term, the country will remain an important market.
"Our international business is 18 percent, of that, Japan is 12 percent, so they are a very important market to us, and to the rest of the world. They are the third largest luxury consumer to the world. We want to be there, we want them to see when they are ready to start shopping again, that Rebecca Taylor is open and that we have new and exciting things to offer them."
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