The store was empty, although a handful of tourists were seen milling around the entrance, looking around in awe, and taking photographs. They smiled politely but shuttled off when one of the well-groomed members of the Armani staff approached them. The 12-storey Armani House, so perfectly situated in the centre of the Ginza district in the heart of Tokyo, reflected the current state of almost every luxury brand you can think of – sleek, stylish and…silent.
Welcome to the epicenter of brand heaven in the aftermath of the global financial meltdown. Consumption of luxury brands – Gucci, Prada and Louis Vuitton – counting for an astounding 12 percent of all sales worldwide. Tokyo is the place where Louis Vuitton's fortunes catapulted into the stratosphere. It's also the city where Gucci decided to open the first Gucci café, and Prada invested in creating their biggest store.
A couple of buildings further down the street, a long queue snaked its way into a store which until recently, would have been completely unacceptable in the Luxury Mecca – a plain, simple H&M store. Next door to that, Zara, and across the road UNIGLO – well known for shamelessly ripping off its wealthy neighbours moments after their latest collections hit the runways in Paris or Milan. A fact that didn't seem to be bothering UNIGLO one bit. Why should it? Their revenue is soaring upwards by 32 percent compared to their wealthy neighbours who are still trying to make sense of their own disappointing seven percent DECREASE. Years ago, when living in Paris, I never failed to be amused as I strolled down Champs Élysées on my way to work every day. At just 8 in the morning, local Parisians would be carrying packed shopping bags emblazoned with logos of every luxury brand from D&G to Chanel, shops that wouldn't open their doors for business much before 10 AM.
Things have changed.
I recently made a small purchase at Hermès, and I was asked if I would prefer to carry it in a plain brown bag without the famous logo. I was somewhat taken aback, and on further inquiry, the assistant replied that I would perhaps feel more comfortable with anonymity. Something as simple as a bag, that only six months ago was the essence of a status symbol now might be considered a liability. Or could it be that the brands themselves were a little reticent about selling their desired products at a discount?
Almost without exception the most exclusive brands are slashing prices to keep their turnover ticking. What would previously have been unthinkable, you can now purchase handbags, scarves, clothing and shoes at discounts ranging up to as high as 50 percent. They are not alone. Hotels rooms in the best district in town can now be had less 30 percent, and so can cars, hi-fi, cosmetics and washing machines.
Is this the end of brands as we know them? Or could brand owners be simply reacting to the economical crisis in a knee-jerk, wrong way? What are your thoughts?
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