As most of the world is concerned about aftershocks, tsunamis, and radiation poisoning as a result of the recent Japanese earthquake, the fashion industry is worried about its bottom line.
Luxury labels including Coach, Cartier, Tiffany, and Montblanc have already seen their share prices dip as investors anticipate a prolonged consumer drought in the world’s largest high-end market.
“We believe the impact could be fairly significant given Japan is currently the largest luxury market globally,” said luxury analyst Sunita Entwistle. “It’s a declining market, but still an important one, and sales were beginning to pick up at the end of last year.“
Japan currently accounts for around a quarter of the world’s sales of hard and soft leather goods. About 18% of these sales come from Chinese tourists, who may choose another destination for their shopping vacations.
The luxury goods index dropped more than 4% on Tuesday, and as the crisis worsens we can’t anticipate a recovery any time soon. After all, the Japanese population isn’t likely to feel like spending, even in the areas not physically affected by the disaster.
It seems kind of callous to worry about something as frivolous as fashion when so many lives have been lost, but in the long-term I’m sure we’re all hoping our favorite luxury labels come through this disaster unscathed.
