TOKYO Dec 16 LVMH (LVMH.PA), the world's biggest
luxury goods group, has scrapped a planned Louis Vuitton flagship
store in Tokyo's glitzy Ginza shopping district, as a spreading
recession takes the lustre off designer brands.
LVMH has broken off talks over opening a store in a planned
building in Ginza due for completion in 2010, an official for the
developer, Hulic Co Ltd 3265.T, said on Tuesday.
An LVMH spokesman said it had withdrawn from the project but
declined to explain the decision or comment on its plans.
"We have not been able to reach an agreement with Hulic on a
store development project in Ginza," said Yuri Matsueda of
Burson-Marsteller, a public relations agent for Louis Vuitton
Awash with cash from a global luxury boom, fashion and
jewellery brands poured money into lavish retail spaces in
upmarket Tokyo neighbourhoods such as Ginza and Omotesando over
the past two years.
Earlier this year, media reports had talked of a 10-floor
luxury Louis Vuitton emporium and restaurant to rival opulent new
Armani and Bulgari towers in Ginza.
A weak yen also encouraged such investments, tempting
Japanese fashionistas to shop at home rather than Europe, luring
buyers from all over Asia to Tokyo and offering foreign brands
bargains in the property sector.
While luxury goods firms gave optimistic forecasts for their
trade as recently as May, banking on the super-rich to keep
spending despite the economic slowdown, the mood has turned as
the impact from the global financial crisis has grown.
Japan, the United States and much of Western Europe is in
recession and growth is slowing in emerging markets such as
Several companies have cut their outlooks and expect a grim
Christmas season followed by an even gloomier 2009.
LVMH had appeared to be weathering the downturn better than
others. It said in October that sales had risen sharply in the
first week of that month, and sales in emerging markets were
The Nikkei buiness daily reported on Tuesday Louis Vuitton
Japan had planned to open what would be one of the world's
biggest stores in Ginza but had to give up due to severe slump in
(Writing by Sophie Hardach; Editing by Rodney Joyce)