The French Pavilion at the Osaka Expo, which opened last month and expects to attract 28 million visitors until it closes in October, is billed as a celebration of heritage and culture. It’s also a flex by LVMH that announces a much bigger presence for the luxury conglomerate in Japan.
A total of 84 Louis Vuitton trunks, stacked floor to ceiling, sit in one room, each one containing a video of a craftsperson working on the products. Levitating in the centre of another room is a humongous 6.6-metre globe constructed of 90 of the brand’s white Courrier Lozine trunks. In the Dior exhibit, 400 white toiles are showcased next to 3D-printed perfume bottles and a trio of the brand’s Bar suits — in blue, white and red.
“Japan holds a special place in the heart of the LVMH Group,” CEO Bernard Arnault said in a statement at the expo. That relationship was forged decades ago when handbag-hungry Japanese consumers drove the luxury boom in the ’80s, but has lately taken on a new significance. The country, which accounts for 9 per cent of the group’s revenues, is an increasingly important site of activity for LVMH, whose business in Europe as well as the rest of Asia has been hit by a decline in sales over the past year amid a wider luxury slowdown. The Osaka Expo is but the latest site of the group’s growing Japan push, which comprises a string of high-profile brand activations, small-scale collaborations and high-stakes real estate plays. The investment underscores a broader shift in luxury that raises Japan’s small-but-mighty consumer base higher on brands’ radars.
Legacy building in a stable market
In the context of the broader slowdown and increased turbulence in China, Japan’s market has remained somewhat healthy. “The Japanese luxury market is characterised by its relative stability and continuous growth,” said LVMH Japan digital director Yuki Endo during a Vogue Business panel in Tokyo last October. In some cases it is buoyant: Prada and Hermès reported growth of 18 per cent and 17.2 per cent, respectively, in Q1 in Japan, with the latter crediting the loyalty of local clients. LVMH, meanwhile, reported a modest 1 per cent drop in Japan, amid a sharper decline of 11 per cent in the rest of Asia. The luxury market in Japan more broadly is set to post real growth of 3 per cent by the end of 2025, according to Euromonitor.
US demand held up for fashion and jewellery, but not for beauty and cognac, group CFO says.
“This is hugely optimistic against a backdrop of ongoing global macroeconomic challenges,” says Fflur Roberts, Euromonitor’s head of luxury goods. “The continued rise of inbound tourism, coupled with tourists’ substantial purchasing capacity due to the prolonged weak yen, presents a promising opportunity.” Still, Roberts urges caution. “After the slowdown in sales growth in 2024, mainly attributed to weak local demand resulting from economic uncertainties and a shrinking population, the outlook remains uncertain.”
Anxiety around lagging growth is currently being driven by Chinese shoppers tapering off as luxury prices in Japan have risen in line with other markets. “Chinese tourists are incredibly sensitive to exchange rate fluctuations when they’re spending in Japan — the tiniest fluctuation and they stop [spending],” says Michael Causton, co-founder of Japan Consuming, a localised retail and consumer intelligence firm.
Experts agree that courting domestic consumers is crucial to circumvent uncertainty around future tourist spending. Theo Knipfing, managing partner of Plus Curiosity, which advises luxury companies on Japan strategy (and whose clients include LVMH), says that luxury brands across the board need to shore up their appeal among Japanese consumers both in the short and long term. “For a lot of major luxury brands, a significant portion of their revenue—especially in Tokyo—comes from tourists, and so there’s this fear that when this stops they’ll be in dire straits because they neglected the Japanese market,” he explains.
Enter LVMH’s huge investment into legacy-building. Dior’s pre-fall show, held last month in the grounds of the ancient To-ji temple in Kyoto beneath the cherry blossoms, attracted over 500 guests from Japan and beyond. The house has recently upped its number of Japanese ambassadors too, including Shōgun star Anna Sawai who wore a paper-white Dior suit to the Met Gala.
Over in Harajuku, Loewe’s ‘Crafted World’ exhibition — which closed in Tokyo last week after a month-long run — attracted over 110,000 visitors. The brand declined to share insights on attendee demographics, but said that the event was “constantly fully booked”, with attendees asked to reserve free tickets over Line, Japan’s most popular messaging service. “They’re investing in legacy-building through such events. To invest in the future, they must invest in the domestic customer,” says Knipfing.
The great Ginza grab
Alongside these activations, LVMH is making significant moves in real estate. In October 2024, the company acquired the Abercrombie Fitch flagship building in Ginza for JPY 40 billion ($276 million). In July this year, a new Tiffany flagship — the largest one in Asia — will also open in Ginza, across from a new Loewe store. This comes when there is already a huge number of flagships, and a considerable amount of space in department stores from Ginza Six to Mitsukoshi to Matsuya, where Louis Vuitton, Celine, Bvlgari and Fendi are prominent presences.
Slowly but surely, the main street of Chuo-dori — historically the nucleus of luxury shopping in Japan and for the past few years has been buzzing with tourists — is becoming LVMH’s territory. “Even to a casual observer, it’s quite obvious that LVMH values Ginza tremendously,” says Knipfing, who adds that the group’s strategic takeover of the area speaks to its standing as a long-term luxury mecca.
The buying (and leasing) up of prime retail space, especially in Ginza, is particularly important in the Japanese market, where experiential retail remains crucial, says Euromonitor’s Roberts. “Physical shopping remains the cornerstone of sales of luxury goods in Japan,” she says. “Brands can leverage their bricks-and-mortar stores to provide a tangible, authentic experience that resonates with international visitors, showcasing the unique aspects of the brand and its craftsmanship.”
Kaori Nakano, a Japanese fashion historian and luxury specialist, points to Louis Vuitton’s Ginza Namiki flagship as a prime example. Designed by Jun Aoki and Peter Marino, the space has pearlescent walls and is filled with art. “It feels like a cultural landmark, not just a luxury boutique,” Nakano says. There is food, too: the new Tiffany store will house Japan’s first Blue Box Café, while a Café Dior — which will serve appetisers inspired by the house’s fashion designs — is also on the way.
This is in contrast to China, where brands including Louis Vuitton, Prada and Gucci have shuttered stores in Shanghai in recent months. “Is Japan closing stores? No, it’s opening them,” says Elena Kirioukhina, a New York-based consultant and Japan retail expert. “With these stores they can feature their brands, host experiences and have a section for special events. I mean, it’s endless.”
From localisation to co-creation
LVMH’s moves speak to a deeper cultural shift in the luxury sector, with key players seeking to strengthen their ties to Japan in fresh ways. Nakano believes that we are now seeing the beginning of a shift towards co-creation, not just localisation. “It’s not enough to bring luxury to Japan anymore — it’s about engaging with Japanese culture in a way that feels mutual and meaningful,” she says, adding that brands would be wise to see Japan not just as a high-spending market, but as a cultural partner.
Dior’s aforementioned Kyoto show illuminates how these partnerships can play out in practice. Tatsumura Textile, a Kyoto weaver founded in 1894 that was first commissioned by Christian Dior in 1953, reconnected with the brand after a 70-year hiatus to create brocade fabrics for pre-fall, while fifth-generation Kyoto artisan Kihachi Tabata created an original sakura print in his dyeing workshop. “That isn’t just about fashion, but about cultural respect, storytelling and positioning Dior as a guest in Japan’s heritage rather than the hero,” Nakano says.
It helps that the boundaries between Japanese culture and foreign culture feels more fluid than ever, says Causton. “It’s a natural inclination for LVMH to want to get involved and use their power to really highlight some of the beauty of Japanese traditions, craft and so forth. “The capacity to weave a foreign luxury brand in with the cultural traditions of Japan would have been odd 20 years ago because Japan felt so separate, but it feels like a very natural thing now,” he says, adding that these collaborations also benefit Japan’s gradually dwindling artisans. “It’s about re-exporting the authenticity of these craftspeople, which works really well because there’s so little known about them.”
The group’s Métiers d’Art division also chose Tokyo-based artist Shu Yonezawa for its residence programme this year, marking the first time it will be held in Japan, which according to the division’s website, signifies “a deepening commitment to the country’s rich artistic heritage and exceptional craftsmanship”.
Partnerships with local artists and specialists could become evermore crucial for brands big and small who are looking to quell a surge in concerns that so-called luxury goods are increasingly overpriced and poor quality. Kirioukhina references the recent TikToks from disgruntled Chinese suppliers who went viral for calling on consumers to buy from their factories directly rather than from the luxury brands they were supplying. “Whether it’s true or not, it affects business,” she shrugs. “Nobody is going to say that you’re not making a quality product if you do it in Japan.”
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