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FURLA’s Performance is Doing Well but the Luxury Market is Saturated?

May 16, 2018.Tokyo, JP
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FURLA Ginza

Italian bag brand FURLA entered the Japanese market early in 1990.  At that time, affordable luxury items were not as popular and didn’t receive much attention. However in 2015, the newly opened Ginza store became the new representative store in Asia. At the end of the fiscal in December 2017, sales have risen by 20% over the previous year reaching a total of 499 million euros (approx. 65.3 billion yen). The recent performance continues and FURLA has been revitalized in the industry. Though it seems to be performing well, it’s only doing so due to the rise of affordable luxury brands.

Comparing the light luxury bag brands that were priced from 50,000 yen to 100,000 yen in Japan, the top two brands that accounted for sales were COACH (sales amounted to 439.5 billion yen) and Michael Kors (sales 337 billion 48 million yen) (limited to the jewelry department), while FURLA's sales are only one-tenth.

*FURLA, Michael Kors, COACH, Kate Spade New York, Samantha Thavasa data is taken from the 2016 final accounts report, LONGCHAMP, TORY BURCH data are taken from the previous CEO's announcement

 

After the financial crisis in 2008, the consumer market became sluggish and luxury brands began to attract the attention of the public. The representative brands were COACH and Michael Kors who had temporarily sold 10 billion yen in Japan. At the time, the best-selling brand was all American-centered. FURLA from Italy was not particularly attention grabbing at the time. Soon after, the consumer market shifted from bags to footwear brands such as Christian Louboutin and Manolo Blanik which are priced at 100,000 yen. In 2017, COACH and Michael Kors’ sales decreased compared to the previous year. Last year, COACH acquired Kate Spade New York. Michael Kors also purchased Jimmy Choo in order to solve its sales problem. As the things heat up, luxury brands have once again stepped into the spotlight and is one of the reasons for the sales decline of these two brands in recent years.

Now that the footwear brand craze have stabilized, it’s not surprising that sales of FURLA is  growing in the light of the new rise in affordable luxury markets. The rise of the luxury brand again with the recovery of consumer sentiment also contributed to the slowdown of both brands in recent years.

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