Tokyo Retail Shows Signs of Recovery

While the Japanese Yen has taken a heavy hit in the markets, it doesn’t mean that retailers have abandoned this important fashion city. Since the start of 2013 there has been growing demand for retail space and several important brands have opened some dazzling new stores. But are consumers dazzled? It’s still a wait-and-see period, with an economy that is still in recovery mode.

That’s certainly what Jack Leung, a retail project manager based in Hong Kong, sensed on his most recent visit to Tokyo.

Jack’s role is in store development for Ralph Lauren, where’s he’s been busy with the important task of growing that brand’s profile in Asia. Most recently the brand showed off a new men’s flagship in Hong Kong’s Prince’s building – just one part of a strategy to target the upwardly mobile Asian male shopper.

Jack gave us a walking tour of the Tokyo’s newest retail projects and his insights on who’s making an impact, and where.

“Omotesando and Ginza continue to be the hottest destinations for brands wanting to make a statement,” says Jack. “But it’s gotten to the point where it can feel a little redundant. Hong Kong has overshadowing Tokyo for a while now. You have to remember that the Japanese customer does travel locally, so they’re going to be looking for a new and different experience on their own home ground, something more than just another lavish flagship.”

While it might seem risky to open a store in Tokyo now, for some brands, it’s better to invest now than pay the high real estate prices later. According to brokers CBRE, prime locations in Ginza and Omotosando are running about $19.22 to $60.42 a square foot per month. No bargain but certainly nothing compared to what they were during the economy’s peak. With Japan’s economy teetering towards recovery, plenty of brands have been busy opening new outposts.

In the past 12 months, key districts like Omotesando and Aoyama, Ginza, and Roppongi have all had their share of big names opening new stores: from Coach and Emporio Armani megastores in Omotosando to Nanette Lepore and Rebecca Minkoff boutiques in Ginza.

Still, Jack says it’s too soon to tell if consumers are answering these retailer’s calls. “You could tell that a lot of Japanese are still looking for value,” says Jack. “The Uniqlo in Omotosando is still the busiest store in the area.”

Some new arrivals making their mark in Tokyo include Thom Brown, Opening Ceremony, and even New York’s ultimate hipster retailer, Freeman’s Sporting Club, which chose Aoyama as its location for a 6,500 square foot four storey complex that includes a first-floor sportswear department a “suiting lounge” and tailoring studio, a bar and restaurant, and of course, a barbershop.

Meanwhile, Cat Street in Shibuya is still the destination for the young and trendy, an area Jack likens to New York’s SoHo. “The little fast-fashion boutiques seem to be doing well,” said Jack. “Like Hong Kong’s Monkok or Tsim Tsa Tsui, this is where the younger fashion kids go to get their fashion fix. These types of stores can survive and downturn and I think can even help predict when consumers are going to start spending money again.”

Of course, major foreign brands don’t usually consider Shibuya for a store, but that’s not the case for Ralph Lauren, which opened a stand-alone concept shop, Denim & Supply, which is targeted precisely at the Shibuya customer.

While Ginza may be the gold standard for foreign brands seeking to make an impact in Tokyo, for now its Uniqlo which is winning in getting customers through its doors. “I think that’s what was so interesting about Uniqlo,” says Jack. ”Here they have this huge and impressive 6-storey store with a completely transparent façade, as if to say, ’hey come on in and shop with us.’ That’s not the same feeling some might have with the other luxury retailers, with their smoked glass windows and imposing entrances.”

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