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Kyoto stores compete for luxury brand market and customer attention

May 16, 2008

On In the city of Kyoto, a battle over foreign luxury brands is unfolding among high end department stores. For many years the Kawaramachi area has been the location of Takashimaya, a department store focusing on high end consumers and luxury brands, as well as the central business area.

However in recent years the business center has been shifting closer towards Kyoto station and other areas, a geographic shift which has also gone along with a change in the business environment itself. As well, a great build up of business in the Kansai region of Western Japan has been occurring in Osaka, less than one hour south of Kyoto. There Isetan department store has been making progress through an overwhelming show of strength in support of luxury brands.

This is a move which can be seen to threaten the Kyoto business region. The competition is heating up among the top stores in the area, with Kyoto facing a conflict due to space and location, while Osaka is focusing on protecting their share of the customer-base.

Takashimaya in Kyoto, which has the highest sales among department stores, will begin their spring offensive with a renewal of their special sales areas for selected brands. For the first time in 9 years the Louis Vuitton section will be remodeled, as well the Prada area will also see renovations. Above all though is their greatest showpiece of the season, long established French brand, Goyard has set up shop in Kyoto at the Takashimaya location.

Goyard has 13 stores worldwide, with one already in Tokyo. This new store will be the first in the Kansai region. Mr. Fukuda, a buyer from the Takashimaya head office emphasized the following points about the opening of the Goyard store in Kansai. Their strength lies in being the only Goyard store outside of Tokyo. With specially selected brands for their most important customers, they are working to firmly establish themselves in the market by relating their image to their selectively chosen high end brands.

On the other hand, Daimaru department store in Kyoto has dealt a blow to Takashimaya by enticing major premium brands to their premises by expanding the number of shops in their street-front shopping area. Just four years after vacating the premise, Louis Vuitton was one of the first brands to make a reappearance in the Daimaru store in 2004. That was just the beginning however as since that time six more major luxury brand names have set up shop in Daimaru, including Emporio Armani and Bottega Veneta.

Unlike in other cities such as Tokyo's Ginza area and Shinsaibashi in Osaka, Kyoto does not have many shopping areas with street-front access. Therefore, Daimaru has quite the advantage in being the number one store in the area with such an attractive way to draw in more customer traffic and to entice those customers with an interest in luxury brands.

Traditionally the area Daimaru is located in has been predominated by office buildings, but in recent years a large number of banks, other types of business and hotels have opened up. All in all, this has resulted in an increase in customer traffic, which fits well with Daimaru's strategy.

However, the challenges Daimaru and Takashimaya have been facing in their efforts to attract luxury brands and customers don't end with each other.

The Kyoto train station building and surrounding area has undergone extensive renovations and remodeling in recent years. Along with the development of such large department stores with a focus on fashion such as Isetan, which have their own luxury brand shops such as Bottega Veneta, the building of other types of shops including electronics stores has affected the flow of customers in Kyoto. Not only local Kyoto residents, but also foreign tourists are being drawn away from the traditional shopping areas to the station area where much progress is being made in development. As well, although Kyoto is quite convenient to maneuver around, those coming and going for example to the Daimaru and Takashimaya areas must start their journey at Kyoto station.

The situation in Kyoto also seems to be having an effect on intensifying the competition among department stores in neighboring Osaka. Mitsukoshi Department Store and Isetan have been working on a joint-management venture in the Osaka station area. As well other major department stores in the area are undergoing large-scale remodeling of late, with the plan of strengthening their ability to draw in more customers. Along with this plotting and scheming going on among department stores within the central Osaka area there is also the strong possibility for businesses outside the area to step up their efforts to draw away customers. More than a few voices from within the department store industry in Osaka and Kyoto are saying that these non-department store influences could just be a large threat.

Throughout Japan's history, Kyoto has frequently been a central location of strife and conflict. At the center of the struggle for Kyoto now are department stores and commercial institutions to see which one can come out on top as the regional leader for attracting and retaining customers, but this isn't all that is at stake. Along with the competition for the Kyoto market, it is also a struggle for attaining top social status in the ancient capital, a serious consideration in an image conscious society.

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