Hankyu Hanshin posts a record August, as luxury demand outruns a Chinese-tourist pullback

H2O Retailing said its Hankyu Hanshin department-store business posted its best August on record, with group-wide sales across all stores up 6.8% year on year, according to the company's monthly sales flash released September 1.

The two flagship stores did the heavy lifting. Sales at Hankyu Honten, the Umeda main store, rose 10.0% year on year -- an August record for domestic-customer sales, tax-free sales and total store sales alike, and continuing double-digit growth every month since April, the company said. Domestic-customer sales alone grew roughly 10% even against a base that was already last year's record. Hanshin Umeda Honten's headline growth of 5.4% understated the underlying trend, H2O said, because a major in-store event moved later in the calendar this year; stripping that out, sales at the store rose roughly 10%, with fashion and lifestyle categories up roughly 20% and food up roughly 10%. Sales at the group's branch stores rose a comparatively modest 2.3%.

Inside Hankyu Honten, sales of goods priced above 1 million yen rose roughly 30% year on year across the store, led by the fifth- and sixth-floor Hankyu Luxury section; international boutiques rose roughly 30%, jewellery and watches roughly 10%, and bridal-related accessories roughly 20%. Group-wide tax-free sales, meanwhile, set an all-time high for the month of August and have now run ahead of the prior year every month since March -- even as spending by Chinese tourists specifically fell roughly 50% year on year. H2O said that decline was offset by other overseas VIP spending, a category it said includes Chinese visitors, which rose roughly 50%.

H2O did not say which markets picked up the slack from Chinese visitors, but the arithmetic suggests the diversification the department-store sector has chased since the pandemic is doing some of its intended work: a duty-free business built around one national group of shoppers is exposed every time that market's spending curbs, currency or travel patterns shift, and Hankyu Hanshin managed an all-time-high tax-free month regardless. Add a still-hot summer that kept fashion categories moving and a record-breaking two-week character-collaboration event on Hankyu Honten's ninth floor, and August reads as a store finding growth in the same three places it has leaned on all year: the flagship, the top of the range, and events built to bring shoppers back.