The Wall Street Journal reports that Gianni Versace SpA is closing its three remaining stores in Japan.
In a statement issued Wednesday, the fashion house said it closed its last three stores in Japan, because they "no longer represented the brand image." The statement described the move as part of a broader overhaul of company strategy, adding that Versace wanted "a clean slate" while hunting for "new locations and more suitable distribution channels" in Japan. The statement didn't say when Versace planned to reopen stores in Japan.The WSJ story says a report by the Bain & Company consultancy predicts sales of luxury items to tumble by 10% in Japan this year. The Financial Times says Versace's stores had been in Japan for nearly thirty years.
The store closures show how Japan's dwindling appetite for luxury goods is forcing brands to reassess their operations in pricey cities such as Tokyo and Osaka. Smaller fashion companies like Versace are under the most pressure, because they lack the financial firepower and economies of scale that larger rivals are tapping to ride out Japan's economic woes.