April 28, 2022
SEOUL – The combined sales of luxury houses Hermes, Louis Vuitton and Chanel in South Korea marked a record high of 3 trillion won ($2.4 billion) last year, amid the frenzy over high-end goods sparked by the coronavirus pandemic.
According to Chanel Korea, the company’s sales revenue surged by 31.6 percent to 1.2 trillion won last year. Net profit skyrocketed by 67 percent to 249 billion won in the citied period.
Louis Vuitton Korea’s sales rose 40 percent to 1.4 trillion won, while its net profit increased around twofold to 301.9 billion won last year.
Hermes posted 527.5 billion won in sales in Korea, up 26 percent compared to 2020. The company’s net profit soared 28 percent to 170 billion won in the same period as well.
The stellar performance of the three local stores was thanks to pandemic lockdowns that kept consumers from traveling abroad and propelled pent-up demand that instead went toward purchasing expensive handbags and other high-end fashion.
Louis Vuitton Korea and Chanel Korea lifted prices five times and four times last year, respectively, but that has added even more fuel to the shopping spree. Shoppers queued in long lines waiting for an “open run,” a term in Korea that refers to when customers dash into stores as soon as they open.
Despite the record sales, a source familiar with Chanel Korea’s operation told The Korea Herald that employees did not receive any incentive payments.
Industry sources say it is largely because Chanel’s global business head office in London that owns 100 percent shares takes all the credit — the same goes for Louis Vuitton Korea and Hermes Korea as well.
In particular, Chanel Korea has been under fire after being embroiled in a conflict with the company’s 390 union members. The union staged a walkout in December last year, claiming that the company failed to pay overdue wages and didn’t take any steps to prevent sexual harassment in the workplace.
While the union eventually reached an agreement with the company, it also filed a complaint to the Korean branch of the OECD on the company’s alleged violation of labor acts and human rights.
“Chanel Korea continues to make every effort to further strengthen preventive measures by improving our process of collecting opinions from our employees and make related internal training more thorough as well as devise improvement measures together,” said the comapny in a statement.