Forget about the latest gloomy GDP data, slumping stock listings and the Tankan Survey. If you want a intelligible indicator of the degree to which Japan's economy has declined, just take a stroll along Chuo-dori, from Shimbashi to Kyobashi.
Ginza's main thoroughfare, which just a few years ago was lined with European brand boutiques packed with glitzy goods at stratospheric prices, is increasingly becoming home to retailers where you can purchase duds with a 1,000-yen note and leave with change in your pocket.
The latest bad news, reports Aera (Feb 15), was the announcement that the Seibu department store in front of Yurakucho station would be closing within this year.
It's rumored that two retail chains, appliance discounter Yamada Denki and casual apparel manufacturer First Retailing, maker of Uniqlo and other low-priced brands, will vie for the property.
Ginza's fate is a classic example of how Tokyo's prime urban real estate can no longer sustain high-ticket retail outlets. Aside from Ginza's three venerable department stores -- Mitsukoshi, Matsuya and Matsuzakaya -- Chuo-dori, is becoming increasingly transformed into emporiums of so-called "fast fashion" -- the garment trade's equivalent of Taco Bell. Since last year alone, in addition to Uniqlo, shops from Sweden's H&M, U.S. chain Abercrombie & Fitch, and Spain's ZARA have opened new outlets.
Slated to appear from this April is U.S. retailer Forever 21, to set up shop on the premises of Matsuzakaya.
Those pricey French and Italian brands are in full retreat. Louis Vuitton waived plans to move into a new building being erected a lot formerly occupied by Gucci. Instead, the building will house a Gap outlet.
"The decline in securities since the 'Lehman Shock' has been one factor discouraging spending by the affluent," says Eriko Kato, an investment consultant at Sumitomo Trust & Banking. "With the brand shops withdrawing from Ginza, it became harder for the banks to finance Ginza properties. Fast fashions are moving in so the area still bustles with activity, but the effects of deflation are omnipresent."
Ginza properties underwent a "mini-bubble" that peaked in 2007, but since then, the plunge in property values has actually been more drastic than the rural parts of Japan suffering from population decline. As opposed to an average nationwide year-on decline in value of 5.9% (as of July 2009), commercial properties in Ginza 2-chome fell by 16%.
Gentaro Yoshino, a visiting researcher at the Japan Center for Economic Research, describes what's been happening as conforming to "The 30-year Company Lifespan Theory," a mechanism that weeds out the players which have fallen behind the times due their persistence to move unsellable products at unsellable prices.
"Deflation is sweeping down on the parts of Japan that cling to the old ways, and bringing about structural reform," is how Yoshino puts it.
But no one knows for sure how long "fast fashion" will remain in vogue. The foreign brands now rushing to get in the door may eventually beat an equally hasty retreat.
"The changes occurring in Ginza may be emulated all over the world," Mana Nakazora of BNP Paribas Securities tells Aera. "The crisis in commercial property is going to change the structure of the world's retailing industries."© Japan Today