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State of Emergency in Japan Threatens Golden Week Sales

The Japanese government on Friday declared a state of emergency due to Covid-19, resulting in partial lockdowns in four prefectures starting April 25 and lasting through May 11.

The prefectures impacted are Tokyo, Osaka, Kyoto and Hyogo. The restrictions will mean that nonessential retailers, such as department stores, as well as theaters and certain commercial buildings will need to close, while big sporting events will be held without spectators. In addition, restaurants, bars and karaoke places serving alcohol are set to shut as well. Other food establishments are to close at 8:00 p.m.

The restrictions were put in place to curb a spike in pandemic cases. Japan’s Ministry of Health, Labour and Welfare has said that 5,452 people tested positive for the virus on Thursday. Similar to the rise in cases globally since the start of the year, the increase in infection rates have been attributed to the new variants that have emerged from Covid-19 mutations. The U.K. at the start of year implemented its third national lockdown due to newly discovered variants.

While the new restrictions fall short of a complete lockdown, the effect for fashion retailers in the areas impacted is essentially a third lockdown.

The shutdown also comes just as Japan was about to start its biggest holiday season known as Golden Week. Golden Week is a collection of four national holidays celebrated over the course of seven days. Many workers take time off during the week to travel. And they take time to shop, heading to stores and fashion outlets to take advantage of spring sales and discounts.

Another round of store closures also would impact a number of luxury fashion brands that said this week that an uptick in Asian sales helped with their latest results. Hermès said sales in Japan rose 12.9 percent to 241.1 million euros ($48.8 million), attributing the growth to loyalty of local customers. The French luxury firm also opened a new story in Tokyo in February. In addition, Kering cited outstanding momentum in the Asia Pacific region, with sales there up 83 percent,  powering its first quarter revenue that topped pre-pandemic levels.

And the store closures would also impact other fashion retailers, such as Fast Retailing Co. Ltd. The company earlier this month reported first-half sales in which same-store sales at Uniqlo Japan rose 5.6 percent year-over-year.

The new restrictions also are being put in place three months before the start of the already delayed Summer Olympic Games, set for July 23 to Aug. 8.