Official financial data confirms South Korea’s sluggish luxury market

According to official financial reports filed by luxury companies with a presence in South Korea, fiscal 2013 was marked by sluggish sales growth as more consumers made shopping trips abroad for savings.

Burberry Korea said in a regulatory filing that its sales gained 4.5 percent on-year to 239.3 billion won (US$237.24 million) in fiscal 2013, which ended on March 31.

Prada Korea Ltd., a unit of Prada SpA, recorded 351 billion won in sales in the period, up 9.9 percent from a year earlier, while that of Christian Dior Couture Korea Ltd. advanced 5.6 percent to 31.1 billion won. The two firms close their books on Jan. 31 and Dec. 31, respectively.

Sales of Salvatore Ferragamo Korea Ltd. jumped 13.8 percent on-year in fiscal 2013, which ended on Dec. 31, but its net profit plunged 43.5 percent to 8.08 billion won due mainly to a rise in sales management costs.

Gucci Group Korea Ltd. reported sales of 252.5 billion won, down 5.2 percent from the year before. The company closes its books on Dec. 31. Fendi Korea’s sales ran below 30 billion won for the first time in three years, with its net profit plummeting 76.88 percent to 269.34 million won.

Market watchers say more consumers are making direct purchases from overseas websites, which is cheaper than buying local imports because it reduces retail costs. A consumer report said a foreign lipstick brand, for instance, is priced at nearly 15 times the original import price by the time it reaches department stores.

adapted from Yonhap News Agency

Dior at Lotte Department Store in Seoul