For savvy shoppers with a nose for a luxury bargain, Japan is proving hard to beat.
The sharp fall in the yen, combined with a number of premium brands not adjusting their prices to reflect the change, has created a rare opportunity to grab luxe goods at a discount. For example, a TAG Heuer Carrera chronograph watch in Tokyo sells for ¥785,000 ($5,087) after the 10 percent duty free discount — more than $1,350 cheaper than its $6,450 price tag in New York.
Those savings are enticing buyers from around the world to Japan, with some eager to resell their luxury goods for a profit. And it’s not just new products that are cheaper — bargains can also be found at the many stores selling top-end second-hand apparel. Instagram influencer Mrs. Dow Jones, known for dispensing financial advice to her 1 million followers, even posted a video about how to do this.
It all adds up to an unusual position for Japan, the world’s fourth largest economy that has long been associated with premium experiences and goods. While the Bank of Japan raised interest rates for the first time since 2007 last month — a move that would normally support the currency — investors appear to be focusing more on the continuing large gap between Japanese and US rates. The yen is now trading near a 34-year low against the dollar.
“Everyone said Japan is very expensive — but I don’t have the feeling that it’s super expensive,” Chiara Lambia, a 26-year-old student who was visiting from Berlin said after spending a day shopping across Tokyo. She was hauling two big bags of clothes and souvenirs around the bustling Ginza district, where many tourists were snapping photos of luxury-brand storefronts.
The yen has weakened about 45 percent since before Covid 19, when Ginza’s streets were mostly known for hosting large Chinese tour groups that came to binge-shop Japanese goods at duty-free prices. These days, you’re just as likely to hear English, French or Spanish in the shopping area.
Makers of luxury goods typically try to equalise prices around the world to prevent price arbitrage, so the discounts likely will not last long, according to Milton Pedraza, chief executive officer of the Luxury Institute, a consulting firm based in New York. But price hikes in prior years might be making some companies more reluctant to further increase customers’ costs.
“Luxury brands have to be careful because they have already taken major price increases in 2022 and 2023, and except for a few highly coveted brands such as Hermès and Chanel, volumes are soft,” he said.
Although luxury goods makers can adapt some prices more regularly through new drops and limited collections, “there is an opportunity created from currency volatilities to enable the savviest of buyers to take advantage of going into certain markets to shop big price tickets,” said Deborah Aitken, senior equity analyst for global luxury goods at Bloomberg Intelligence.
For now, some of the hottest luxury items are effectively discounted. We’ve complied a few of them:
Luxury Bargains
Chanel classic handbag
Black lambskin purse retails at $10,277 in Japan versus $11,700 in the US. *Total savings: $1,423
Dior J’Adior slingback pumps
Pair of heels crafted in Italian Christian Dior ateliers retail at $860 in Japan versus $1,050 in the US. Total savings: $190
TAG Heuer watch
The Carrera chronograph model costs $5,087 in Japan and $6,450 in the US. Total savings: $1,363
Cartier love bracelet
Yellow-gold cuff retails for $4,244 in Japan and $4,750 in the US. Total savings: $506
Prada sunglasses
Glasses with slate grey lenses are $395 in Japan and $530 in the US. Total savings: $135
Gucci loafers
Pair of leather 1950s-style Gucci loafers are $810 in Japan and $990 in the US. Total savings: $180
Burberry trench coat
Mid-length Kensington Heritage model of the classic Burberry trench coat is $2,106 in Japan and $2,590 in the US. Total savings: $484
Hermès scarf
The Carre 90 version of Hermès scarf in blue silk twill is $460 in Japan and $550 in the US. Total savings: $90
Montblanc pen
Gold-coated Montblanc ballpoint pen is $395 in Japan and $460 in the US. Total savings: $65
*Prices are compared using duty-free prices in Japan, which have been converted into US dollars, and pre-tax prices in the US as of April 16, 3:10 pm in Tokyo.
By Lisa Du and Claire Ballentine
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