Louis Vuitton said Tuesday it was dropping plans for a massive flagship store in central Tokyo as the global economic crisis dampens the market for luxury goods. The French luxury brand had planned a 12-floor, 12,000 square-meter store off a major street in Tokyo's glitzy Ginza district that would rival in size its main shop in Paris.
Louis Vuitton counts on Japan as its most lucrative market with some estimates saying that a third of young Japanese women own handbags or other apparel from the retailer.
A spokeswoman for the local unit, LVJ Group KK, confirmed that an agreement on building the store was off.
Hulic Co, a Japanese real estate firm constructing the building, said it had been set to open in 2010 with Louis Vuitton selling goods throughout almost the entire complex.
"We understand the company canceled the project due to its own conditions," said a Hulic spokesman. "We will construct the building as scheduled, inviting other tenant candidates."
The spokesman said the developer was not too concerned about filling the building space thanks to the location but declined to comment whether the company would seek compensation from the luxury handbag company.
French parent LVMH Moet Hennessy-Louis Vuitton said its Japanese sales fell 7% on the year in the nine months ended Sept 30. The company last week announced it would cut prices in Japan.
Japan's Nomura Equity Research recently estimated that global sales of luxury brands would sink by 4% next year and another 3% in 2010.© Wire reports