TOKYO — Not long ago, many Japanese bought so many $100 melons and $1,000 handbags that this was the only country in the world where luxury products were considered mass market.
Even through the economic stagnation of Japan’s so-called lost decade, which began in the early 1990s,
Japanese consumers sustained that reputation. But this recession has done something that earlier declines could not: turned the Japanese into Wal-Mart shoppers.
In seven years operating in Japan, through a subsidiary called Seiyu, Wal-Mart Stores has never turned a profit. But sales have risen every month since November, and this year, the retailer expects to make a profit.
That is an understatement. Across the board, discount retailers are reporting increases in revenue — while just about everyone else is experiencing declines, in some cases, by double digits.
As a result, the luxury boutiques, once almighty here, are reeling.
Sales at LVMH Moët Hennessy Louis Vuitton, makers of what has long been Japan’s favorite handbag, plunged 20 percent in the first six months of 2009. In December, as the global economic crisis unfolded, Louis Vuitton canceled plans for what would have been a fancy new Tokyo store.
In the 1970s and ’80s, and even as the economy limped through the ’90s, a wide group of consumers spent generously on Louis Vuitton bags and Hermès scarves — even at the expense of holidays, travel and, sometimes, meals and rent.
Now, the Japanese luxury market, worth $15 billion to $20 billion, has been among the hardest hit by the global economic crisis, according to a report by the consulting firm McKinsey & Company. Retail analysts, economists and consumers all say that the change could be a permanent one. A new generation of Japanese fashionistas does not even aspire to luxury brands; they are happy to mix and match treasures found in a flurry of secondhand clothing stores that have sprung up across Japan.
“I’m not drawn to Louis Vuitton at all,” said Izumi Hiranuma, 19.
“People used to feel they needed a Louis Vuitton to fit in,” she said. “But younger girls don’t think like that anymore.”
In the new environment, cheap is chic, whatever the product.