The economic mood in Japan is brightening and consumer confidence is way up. That is the word anyway from Takuji Ishihara -- not an economist but the president of Komehyo, a well known dealer in secondhand high-end handbags. Working across from the flagship Komehyo store gives Mr. Ishihara an ideal seat to observe consumer sentiment.
According to a Financial Times article the end of last month, Mr. Ishihara sees a big shift since Prime Minister Shinzo Abe’s growth policies or “Abenomics” started to take hold. Before, Japanese women were furtively selling their Hermes and Prada wares to raise cash under financial duress. Today, the stigma of selling prized bags is gone. Komehyo customers are confidently selling handbags to upgrade or make “a more adventurous purchase”.
What’s more, Mr. Ishihara adds, is that Komehyo customers are using their handbags as a savvy foreign exchange play. The yen is weak, and since handbag prices are based in dollars and euros, women are receiving more yen for their merchandise. In Japan, prices for luxury goods are up 10 – 20% and that has brought in a lot more handbag sellers. In Mr. Ishihara’s words: “. . . even after we have taken our cut, the bags are worth significantly more than they were 18 months ago.” That’s a big windfall.
The Nikkei stock average recently hit its highest level in 18 years -- something hard to imagine several years ago. But this probably comes as no surprise to Mr. Ishihara. Even on weekdays, the six-floor Komehyo flagship shop is full. Sellers present their bags in what the FT calls “Swiss private bank”-like conditions: a waiting room with leather armchairs, espresso machines, and a row of handbag experts in opaque cubicles.