|People enjoy afternoon tea at a coffee shop in "House of Dior" in the posh neighborhood of Cheongdam-dong, southern Seoul, in November 2019. / Korea Times file|
By Kim Jae-heun
Only a week after LVMH raised prices of Louis Vuitton products, the French multinational corporation decided to increase the product prices of other affiliated luxury brands such as Dior, Fendi, Givenchy and Bulgari. However, the exact rate of increase has not been revealed.
Last year, Dior raised the price of its luxury products twice, once in May and again in July, by 10 percent each time. On Jan. 7, Louis Vuitton hiked the prices of its popular handbags by up to 25.6 percent.
The continued popularity of luxury goods here, undeterred by the COVID-19 pandemic, led to the price markups.
According to the Ministry of Trade, Industry and Energy, sales of luxury products at department stores surged 20 percent from May to December last year. Luxury product sales soared 32.5 percent in July alone.
Thanks to this trend, Hyundai Department Store's Pangyo branch in Seongnam, Gyeonggi Province, saw annual revenue surpass 1 trillion won ($910 million) in 2020, up 9.4 percent from a year earlier.
The department store plans to sell more luxury brands such as Boucheron and Burberry in the first half of this year. Hermes, one of the so-called "big three" fashion houses along with Louis Vuitton and Chanel, is reviewing the possibility of opening a boutique there too, but a final decision has not been made.
"We will continue to attract more key luxury brands to contribute to the revitalization of the local economy and grow to become Korea's top shopping landmark," Hyundai Department Store CEO Kim Hyung-jong said.
Lotte Department Store is also boosting floor space to sell more luxury products.
The department store chain is renewing its main branch in downtown Seoul, for the first time in 42 years. Luxury boutiques comprises 15 percent of overall shops in the department store now and Lotte wants to increase it to 20 percent.
When the building is renewed, Lotte Department Store will move all of the cosmetics stores there down to the underground level and fill the first floor with luxury brands.
Luxury brand sales at Lotte Department Store rose 16 percent between January and November last year compared to 2019.
Another retail giant, Shinsegae Department Store, also saw luxury product sales increase by 26 percent over the same period.
"People in their 20s have become key consumers of luxury goods here as they invest a lot of money into what they believe has value. They may eat instant food at convenience stores, but they are buying luxury goods," a fashion industry source said.