Louis Vuitton said yesterday it was dropping plans for a massive flagship store in central Tokyo as the global economic crisis dampens the market for luxury goods.
The French luxury brand had planned a 12-floor, 12,000m² store off a major street in Tokyo’s glitzy Ginza district that would rival its main shop in Paris in size.
Louis Vuitton counts on Japan as its most lucrative market with some estimates saying that a third of young Japanese women own handbags or other apparel from the retailer.
A spokeswoman for the local unit, LVJ Group KK, confirmed that an agreement on building the store was off.
Hulic Co, a Japanese real estate firm constructing the building, said it had been set to open in 2010 with Louis Vuitton selling goods throughout almost the entire complex.
“We understand the company canceled the project due to its own conditions,” said a Hulic spokesman. “We will construct the building as scheduled, inviting other tenant candidates.”
Elsewhere spokesman said the developer was not too concerned about filling the building space thanks to the location but declined to comment whether the company would seek compensation from the luxury handbag company.
French parent LVMH Moet Hennessy-Louis Vuitton said its Japanese sales fell 7 percent on the year in the nine months ended Sept. 30. The company last week announced it would cut prices in Japan.
Japan’s Nomura Equity Research recently estimated that global sales of luxury brands would sink by 4 percent next year and another 3 percent in 2010.
Elsewhere, employers and union leaders in Italy’s fashion sector on Monday called for an “urgent” meeting with Prime Minister Silvio Berlusconi to discuss ways to limit the impact of the world financial crisis.
They called for the meeting in a joint letter to Berlusconi and his finance, labor and economic development ministers, the textile and fashion federation Sistema Moda Italia said in a statement.
Signatories include associations representing the textile, shoe, leather and eyeglass industries — representing tens of thousands of companies — as well as the main unions in the fashion sector.
The letter asks for “an urgent meeting to enable us to face together the effects of the current heavy global, financial, economic and social crisis on the sector’s businesses.”