Retail in Asia


In Japan, clothes are back in fashion

After several painful years, Japan’s clothing market is at last showing clear signs of recovery.

Compared to any other spending category, spending on clothing and footwear declined the most over the past two decades. In 2000, the average two or more person working household spent JPY17,195 (USD122) a month on fashion, but this had dropped to just JPY11,294 (USD79.87) in 2022, a fall of more than 34 percent.

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With people stuck at home, fashion spending dropped 17.6 percent in 2020 alone, with the shift to buying online insufficient to make up for the fall. Spending hit an all-time low in 2021 of JPY10,463 (USD74) a month.

The latest data from the Household Income & Expenditure Survey suggests that the rebound has now begun: clothing consumption increased 7.9 percent in 2022, double the overall expenditure increase of 3.6 percent across all categories.

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While the actual amount spent was still 12 percent less than in 2019, the latest numbers do show a marked improvement and a gradual process of recovery.

Based on the monthly sales at key clothing retailers and department stores, 2023 should see a further rise in fashion spending. 

In the premium market, between January and April, monthly increases in clothing sales at department stores averaged 15.5 percent. Fashion accessory sales were even higher, averaging increases of 22 percent in the same period. United Arrows, meanwhile, posted same-store gains of 10.9 percent and 10.6 percent in April and May, after an 11.2 percent rise in FY2022. 

In the mass market, Fast Retailing posted 1H2023 sales (ending February) up 20.4 percent and, in Japan, Uniqlo was up 11.9 percent and GU 18.5 percent.

Shimamura, meanwhile, has seen same-store sales rise 5.6 percent since March this year and achieved record highs in both sales and profits last year, boosted by unique private brands such as Closshi Premium.

Nishimatsuya Chain achieved its 27th straight year of higher sales in FY2022 and expects another record year in 2023, while Adastria has seen same-store sales rise 13 percent so far this year.

Even the suit retailers are seeing a partial recovery, with Aoyama Shoji’s same-store sales up 10.5 percent in April after a 5.9 percent increase in 2H2022.

As significant, profitability is also much improved, a sign of how many firms have managed to cut costs since the pandemic began, particularly in inventory management. 

Even Sanyo Shokai, which posted seven straight years of losses, managed a return to profit last year and rival Onward expects its highest profit since 2015 this year – despite sales being almost 40 percent lower than eight years ago.

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More than the data, a wander around the streets of any major city shows Japanese out and about and having fun again. The Spring mood even seems to have infected investors, who are all suddenly convinced Japan is the next big thing.

Stocks may rise and fall but consumer optimism expressed through new fashions should last longer.