Dispatch from Tokyo: A Retail Roadmap

With the devaluation of the yen, Tokyo has become a focal point for fashion shoppers looking for good deals. Imran Amed shares his key takeaways and recommendations from a recent trip to the world’s retail capital.

Hi, this is Imran Amed. Below I share an excerpt of my weekly letter, as well as a digest of The Business of Fashion's top stories across luxury, beauty, retail and sustainability this week. Sign up here to get the full briefing in your inbox each Saturday.

TOKYO — Tokyo has long been my favourite retail destination on the planet. With the world’s most sophisticated consumers, a vast array of retail options specialised down to the most specific and minute genres imaginable, as well as an obsessive focus on product quality and service excellence, there’s nowhere else I’d rather shop.

The Japanese don’t do a great job of promoting Tokyo’s vibrant retail landscape, however. Seoul has taken the crown as Asia’s fashion and cultural capital thanks to Korea’s booming entertainment industry. To the average tourist, Tokyo might still be better known for its sakura season in the spring when cherry blossoms bathe the city in hues of pink. But there’s no doubt Tokyo is one of the most exciting cities in the world. And the weak yen has enticed 17.78 million tourists to Japan in the first half of this year, according to the Japan National Tourism Agency, up more than 1 million people versus the previous high in 2019. Everything — food, fashion, accommodation — is so much more affordable than London, Paris or New York.

So especially now, when prices elsewhere remain sky-high following the post-Covid inflationary surge, Tokyo is a prime shopping destination, especially for the Chinese. The relatively low pricing, combined with an efficient tax refund process and an endless variety of options, has attracted luxury bargain hunters from around the world as the yen hit multi-year lows against the US dollar, the euro, the South Korean won, the Australian dollar and the yuan.

The impact on fashion brands and retailers in Japan has been palpable. This week, LVMH reported that sales in Japan were up an astonishing 57 percent in the second quarter. This is particularly noteworthy given revenues for the world’s largest luxury group — and bellwether for the entire sector — fell by 14 percent in the rest of Asia, including China.

Japanese designers and executives I spoke to on the ground said their sales were also up about 30 percent versus last year, an unexpected but much welcome boon to their businesses. Though, for some brands, the low yen has also meant their input costs for manufacturing abroad have surged too.

This was my sixth visit to Tokyo in the last 15 years, and it really was better than ever. I had planned my trip before the recent devaluation of the yen, but the timing was really good as it was also the tail-end of the summer sale season, where even top brands were marked down by up to 40 percent.

I was keen to dive back into Tokyo’s rich retail scene. As things change so quickly here, it’s always helpful to get updates on what’s new and what’s closed (sayonara to two of my favourite stores from past visits, Pass The Baton and Roots & Branches) so thanks to all of you who shared your recommendations.

I received hundreds of responses to my request for ideas on Instagram.. If something I hadn’t heard of before got multiple mentions, I knew I had to check it out. I also talked to insiders on the ground to get their tips on what I must do and see this time around.

Several of you asked if I could create a summary of my top picks, and I’m more than happy to oblige. This is an opportunity to pay it forward and share what I learned — and what I loved.

READ MORE

This Weekend on The BoF Podcast

Sport and fashion have always been a part of Stéphane Ashpool’s life: He was raised watching his artistic parents socialise with designers like Claude Montana in Paris, while simultaneously falling in love with basketball watching the LA Lakers on TV. He followed both of these passions into adulthood, eventually launching streetwear brand Pigalle in 2008 and going on to collaborate with brands like Nike.

“I have as much curiosity for couture as I have for sport kit,” said Ashpool. “I knew I wanted to kind of blend those things spontaneously. I had no clue what it was going to bring me but that’s why I started to put things together.”

This week on The BoF Podcast, Ashpool joined me to share his journey with clothing brand Pigalle and how his unconventional path into fashion led him to designing the French national team’s Olympic uniforms.

Wishing you all a great weekend!

Imran Amed, Founder, CEO and Editor-in-Chief, The Business of Fashion

Here are my other top picks from our analysis on fashion, luxury and beauty:

1. Are Luxury Brands Still Worth It?

Luxury’s results ‘superweek’ underscored just how far consumer demand has fallen. Macroeconomic gloom is part of the problem, but there may be deeper issues with big luxury’s value proposition.

Read the full article here.

2. Inside Fashion’s Biggest Olympics Ever

Long the marketing domain of sportswear giants, the 2024 Olympic games in Paris are seeing an influx of fashion advertisers who are getting creative in how they capitalise on one of the few remaining events with massive global impact.

Read the full article here.

3. How to Get Customers to Shop Online

Fashion e-commerce winners are using new personalisation techniques to boost sales, but doing so doesn’t necessarily require expensive software upgrades.

Read the full article here.

4. Tiffany’s Staff Exits Test LVMH’s Turnaround Playbook

Ambitious sales targets and lower commissions for some salespeople have led them to defect for competitors, taking some of their loyal clients with them.

Read the full article here.

5. Inside Turkey’s Powerful Fashion Factories

Turkish manufacturers like Kipas are harnessing vertical integration, innovation and speed-to-market to help Asos and other brands ‘nearshore’ their supply chains and diversify away from China.

Read the full article here.

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