Parasites. Not quite the right association for purveyors of $1,000, buttery-soft leather handbags.
But they’re just what Europe’s fashion houses have counted on since the 1990s, at least in Japan.
“Parasite singles,” to be exact, is the rather unflattering name given to a key Japanese demographic: unmarried women and men in their 20s and early 30s living with their parents and able to blow large portions of their paychecks on themselves.
Nearly half of Japan’s single men and women between the age of 20 and 34 live at home. Their absolute numbers declined 5% in the past year to 11 million, but their proportion of that age cohort remains flat.
Now, this group is losing its yen to spend – and sales of European-made handbags, shoes and watches are tumbling.
Insecurity over jobs, if they can get one, plus falling wages and sluggish economic growth, all account for the decline in spending power.
Japan is a key market for European luxury brands. The country accounted for 14% of their revenue in 2008. Include Japanese tourists shopping overseas and the figure almost doubles for some brands like Hermes and Bulgari, according to UBS. In 2014, the Japanese will account for only 9%.
Retailers are already cutting back. Versace shuttered its outlets there while Louis Vuitton canceled plans for a new megastore in Tokyo’s equivalent of Fifth Avenue, the Ginza, recently.
Still, not everyone is missing the high spending days.
Japan’s Fast Retailing, with its cheap-but-chic clothing, has been cashing in, as people match $2,000 watches with $23 fleece jackets. Fast Retailing, best known for its low-cost brand Uniqlo, last month posted a 14% rise in profit in the year through August and expects a 25% jump this year to $713 million.
To catch higher price points using designer cachet, Uniqlo started selling Jil Sander-designed clothing last month. And Sweden’s Hennes & Mauritz, or H&M, which entered Japan last year, started selling Jimmy Choo designed goods this month.
Clearly, parasites are falling out of fashion, at least in Japan.
