The Japanese government reported yesterday that retail sales rose 1.1% in 2005, rising for the first time in 9 years while consumer sentiment reached its highest level in more than 15 years. Domestic consumption is now said to make up 55-57% of the economy. All the buzz in the Japanese financial media lately regarding the retail sector is about the revolution of the sector and of course the luxury segment. Stand-alone department stores are now having to compete with an onslaught of American-style shopping malls popping up around the country. The luxury segment is equally, if not more competitive where profit margins and brand identity are highest. Three "American" stocks that immediately come to mind that stand to benefit from the resurging Japanese retail sector are Coach (COH), Gap (GPS) including Banana Republic, and Tiffany (TIF).
Also see this recent post about Coach and Japan's love of high-end luxury items.
COH 1-yr chart:
GPS 1-yr chart:
TIF 1-yr chart: