Louis Vuitton Korea’s first Asian pop-up space at a Shinsegae Department Store outlet in southern Seoul entirely devoted to handbags. (image: Louis Vuitton Korea)
SEOUL, Feb. 17 (Korea Bizwire) — Global luxury brands are raking in huge dividends in the South Korean market, while being stingy about making donations.
According to the 2019 audit reports of ten foreign luxury brands, their local branches paid 140.2 billion won (US$126 million) in dividends and commissions to their headquarters.
The combined sales of the local branches amounted to 1.8 trillion won during the period. Nine brands, excluding Ferragamo Korea, transmitted about 8 percent of their revenues to headquarters.
In particular, Rolex Korea sent 60 billion won in dividends to its headquarters, up 50 percent from a year ago. This figure is equivalent to its total operating profits.
Swatch Group Korea, which runs a string of luxury watch brands, including Omega, sent 33.8 billion won in dividends to its headquarters, while Bulgari Korea sent 18 billion won in dividends to its headquarters.
In stark contrast to the huge amount of dividends and commissions, the global luxury brands made a negligible amount of donations, leading to criticism that they are lagging behind in social contributions.
(image: Korea Bizwire)
In fact, eight of the ten foreign luxury brands made no donations at all. Rolex Korea made a donation of 340 million won, up 30 million won from a year ago, despite chalking up a huge operating profit of 55.9 billion won in the South Korean market.
Christian Dior Couture Korea, which runs the Christian Dior brand, donated a mere 40 million won, up 10 million won from a year before, despite sales and operating profits rising by 92.6 percent and 447.4 percent, respectively.
Global luxury brands are taking a different approach in China, the world’s largest luxury market, by making huge donations there.
French luxury goods conglomerate LVMH donated $23 million to the Red Cross Society of China last year to help fight against COVID-19.
Kering Group, which owns brands like Gucci and Bottga Veneta, also donated $1.1 million in China last year.
J. S. Shin (js_shin@koreabizwire.com)
