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The luxury industry is falling from its elevated heights

Labels from Gucci to Burberry are struggling as aspirational shoppers pull back from extravagance

The gleaming flagship stores of Louis Vuitton, Chanel and Gucci in the Ginza district of central Tokyo are no one’s idea of discount outlets. They were designed by top architects and offer sumptuous displays of luxury goods in Japan’s most expensive patch of ground.

But they have been filled with bargain hunters in recent months — Chinese tourists who have flown to Japan’s capital to buy items more cheaply than at home. The yen’s weakness has provided an opportunity for those who would once have shopped in mainland China, or acquired clothes and accessories in Hong Kong or Europe.

China’s aspirational consumers, who have helped to drive the growth of the global luxury industry in the past two decades, are watching their money carefully. The fragile domestic economy has made them more cautious and they have pulled back from a surge of “revenge shopping” after lockdown. The Asia-Pacific sales of brands such as Burberry and Gucci have fallen sharply outside Japan.

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