SEOUL, Feb. 10 (Korea Bizwire) — A group of luxury brands that have benefited from post-pandemic ‘revenge spending’ are withdrawing from downtown duty-free shops in South Korea, dealing a blow to related industries.
Chanel, for example, decided to suspend the operation of its stores within the Lotte Duty Free branch in Busan and the Shilla Duty Free branch on Jeju Island from late next month.
It will keep operating the stores within four duty-free shops in Seoul, though.
“Chanel’s latest decision came after its stores in regional downtown duty-free shops reported sluggish results amid the prolonged COVID-19 pandemic,” an industry official said.
Another French luxury brand Louis Vuitton, which closed its store within the Lotte Duty Free branch on Jeju early this year, plans to withdraw from the Shilla Duty Free branch on Jeju and the Lotte Duty Free branches in Busan and Jamsil in March.
This decision came after Louis Vuitton shifted its focus away from downtown duty-free shops towards airport duty-free shops, particularly ones with flights to or from China.
Market watchers said that the luxury brands’ latest moves reflect their strategic decision to focus on the fast-growing Chinese market, while shutting down stores with lower than expected revenues.
Since they have an advantageous position over domestic duty-free shops, they can reopen stores anytime they want even if they are now deciding to close some locations, market watchers added.
J. S. Shin (firstname.lastname@example.org)