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2017-06-06 10:41
By Park Jae-hyuk



LVMH Chairman and CEO Bernard Arnault will come to Korea today to attend Thursday’s opening ceremony for the “Volez, Voguez, Voyagez ─ Louis Vuitton” exhibition at Dongdaemun Design Plaza in Seoul.

He is expected to meet CEOs of Korean retail giants, including Shilla’s Lee Boo-jin, Shinsegae’s Chung Yoo-kyung, Lotte’s Shin Dong-bin and Hyundai Department Store’s Chung Ji-sun, during his two-day stay here.

The Korean chief executives are competing to win the French billionaire’s heart, so as to place the luxury brand in their downtown duty free shops.

Considering the brand’s declining popularity in Korea, however, Arnault may have to try his best to recover Louis Vuitton’s fame, rather than just being satisfied with the warm welcome from the retail giants.

He is required to realize that Koreans are no more blind adorers of foreign luxury brands and Louis Vuitton seems to be one of the biggest losers.

Unlike in the past, foreign luxury brands are not so attractive for Korean duty free stores as demonstrated by the fashion accessories zones for new duty free stores in the second passenger terminal at Incheon International Airport, which will open in October.

Bidding for spaces in the zone has failed four times, due to the fast decline of Chinese tourists and the resultant slump in sales and profits.

The Incheon International Airport Corp. (IIAC), which originally aimed to accommodate the top 20 global luxury brands including Louis Vuitton and Chanel, retracted the plan.

Unfortunately for Arnault, duty free operators already know that luxury fashion brands are not popular anymore in airports.

After a continuous falloff of its sales at Incheon, Louis Vuitton’s sales revenue now lags behind those of KT&G, Sulwhasoo and KGC.

Although newly selected downtown duty free licensees still seek to attract Louis Vuitton for their survival, conditions can also change for them, because Chinese tourists are not visiting the stores amid a missile defense system dispute between Beijing and Seoul.

What is worse, the brand has been losing luster among Korean consumers over the past six years.

Its designs, after-sales service, pricing policies and corporate social responsibility donations have been disappointing, so Korean consumers have turned their backs on Louis Vuitton.

According to industry officials, Louis Vuitton has seen its sales growth rate fall at major department stores here for years. Its sales contracted last year while Hermes and Chanel chalked up double-digit growth.

But still, Louis Vuitton is seemingly failing to come up with proper measures to grapple with the challenges.

The chairman’s schedule in Korea is shrouded in secrecy, as the company only mentions the exhibition ceremony as an official event that he will attend.

If the chairman wants to continue to rake in profits here as before, he is strongly recommend to study sincerely ways to win the hearts and minds of the Korean people. So far, so bad.

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