Sales of high-priced merchandise are growing at department stores as stronger stock prices and the weaker yen from Prime Minister Shinzo Abe’s “Abenomics” economic policy mix stimulate spending by affluent people.
Department store sales across the country totaled some ¥3 trillion in the first half of 2013, up 2.3 percent on a same-store basis from a year earlier, according to the Japan Department Stores Association.
Sales in the category of “fine arts, jewelry and precious metals” notched up a gain of 5.2 percent to ¥149.8 billion. In addition, sales of “personal effects,” including luxury European brand bags, scored a larger rise of 6.7 percent to ¥391.5 billion. Clothing and food sales, which make up the majority of department store sales, showed only marginal increases.
The strong sales of luxury goods continued into July. Sales of wristwatches and jewelry grew some 20 percent at Isetan Mitsukoshi Holdings Ltd.’s three main department stores in Tokyo and 15.2 percent at J. Front Retailing Co.’s nine Daimaru and Matsuzakaya department stores across the nation. In addition, Takashimaya Co. and Sogo & Seibu Co., a unit of Seven & I Holdings Co., registered sales gains of 17.6 percent and about 15 percent at their respective nationwide chains of 18 and 24 stores.
“Watches, especially well-known Swiss-brand watches priced at ¥500,000 to ¥1 million, have been in strong demand lately,” said Yuko Shibuya, a Takashimaya manager for luxury merchandise.
At a fair for Swiss watches of the Franck Muller brand held by Isetan Mitsukoshi at its flagship Mitsukoshi Nihonbashi store in Chuo Ward, Tokyo, in July, sales turned out to be more than 50 percent higher than expected. Watches carrying price tags of 1 million to ¥5 million sold well, according to an official.
The fair attracted many visitors from outside Tokyo, with women accounting for 70 percent of buyers, the official said, noting the widening customer base for luxury watches.
Yoichiro Ide, executive director of the department stores association, attributes the higher sales to expectations of an economic recovery created by Abenomics as well as the effect of successive store refurbishments by major department stores since last year.
Next April’s scheduled hike in the consumption tax is expected to affect demand for luxury merchandise, however.
“High-priced goods are not daily necessities, so the tax increase will unavoidably delay purchases,” Ide said.
If department stores want to maintain solid sales, they need to make their sales floors for food, general merchandise and other nonluxury goods attractive to consumers, Ide added.