Two luxury companies are selling big to Japanese buyers, not just to tourists taking advantage of the cheaper yen
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- Prada Group's Japan sales rose 55% for the first half of 2024, most of it from local customers.
- Other luxury players are seeing more Chinese shoppers flocking to Japan.
- Hermès also reported strong local Japanese customer sales.
Japan's currency might be slumping, but it hasn't stopped Japanese customers from shopping for luxury at Prada and Hermès.
On Tuesday, Prada Group reported a 55% increase in Japan sales revenue, to 309 million euros, or around $334 million, in the first half of this year — the largest year-over-year growth for all of its regions. Japan made up 13% of Prada's total revenue.
Japan has become a hot spot for Chinese shoppers, who have eschewed local luxury stores to take advantage of the historically weak yen. Many luxury brands reported strong numbers in Japan for 2024, including bellwether LVMH, whose Japanese sales surged 57% in the first half of the year. On an earnings call last week, LVMH's chief financial officer said the sales bump largely came from Chinese tourists.
While Prada also saw substantial revenue growth in Japan, the company attributed it to a strong local consumer base, who accounted for 65% of Japan's sales.
"Locals are holding up extremely well," said CEO Andrea Guerra on the company's Tuesday earnings webcast.
Hèrmes also reported strong sales from local Japanese customers.
"Not very many foreigners buy Hermès in Japan, and the Chinese tend to buy in China," said Axel Dumas, executive chairman of Hermès International, on the company's earnings webcast on July 25.
Hermès' sales revenue ticked up 9% in Japan for the first half of the year, compared to the same period last year.
Both brands cater to specific customer bases.
Hermès products have become status symbols in recent years for wealthier customers who are more resistant to economic recessions. Bloomberg reported in April.
Meanwhile, Prada-owned Miu Miu is a hot brand for Gen Z luxury shoppers and young celebrities like Sydney Sweeney and Olivia Rodrigo. The brand reported a 93% jump in revenue for the first half of the year, compared to the same period last year, and made up close to a quarter of Prada's total revenue.
Prada's net revenue increased 18%, to 2.26 billion euros, during the first half of the year.