Revenge spending refers to the outpouring of pent-up desire for consumption at once. (image: Korea Bizwire)
SEOUL, April 23 (Korea Bizwire) — Although the domestic fashion market has been hit hard by the novel coronavirus outbreak expensive brands are doing well.
Despite the overall slump in consumption, industry analysts say that the pent-up desire for consumption is leading to an increase in purchases of luxury goods to display wealth.
At the height of the spread of COVID-19, sales at Lanvin Collection and TIME have increased significantly, Handsome Corp., an affiliate of Hyundai Department Store Co. and the top player in the women’s fashion industry said Wednesday.
Lanvin Collection, which is one of the most exclusive offerings among the Handsome brands, is a license brand introduced jointly by Handsome and French luxury brand Lanvin Paris. It saw sales rising 35 percent on-year in the first quarter.
TIME, the flagship brand of Handsome, also saw its online sales jump 58 percent in the first quarter.
Meanwhile, Isabel Marant, a French luxury brand imported by LF Corp., saw its sales rise 10 percent this year from a year earlier.
A similar phenomenon is emerging in the men’s clothing market. Thom Browne, which is imported and sold by Samsung C&T Corp., a construction and fashion unit of Samsung Group, saw its sales rise 20 percent year-on-year thus far this year.
Thom Browne is a semi-luxury brand known for its men’s suits, and has recently enjoyed explosive popularity among young people with the release of Samsung Electronics Co.’s Galaxy Z Flip Thom Browne edition.
(image: Hyundai Home Shopping)
The fashion industry interpreted the promotion of high-priced brands as a combination of revenge spending and the Veblen effect at a time when low and mid-priced brands are struggling with the effects of the COVID-19 outbreak.
Revenge spending refers to the outpouring of pent-up desire for consumption at once, while the Veblen effect refers to a phenomenon in which products sell better as prices rise, a form of conspicuous consumption.
In addition, with shopping trends rapidly reshaping the online market in the aftermath of COVID-19, some analysts say that these brands, which have quickly established online sales systems, are benefiting.
All of the brands whose sales have increased tout their wares via online portals — HANDSOME.COM, LF Mall, and SSF Shop.
The fact that there is no difference between offline and online prices also contributed to the increase in sales.
“COVID-19 is intensifying the gap between the rich and the poor in the fashion industry,” an official from the fashion industry said.
“A growing number of young and middle-aged people are now purchasing products from expensive brands online that they would never have considered in the past.”
D. M. Park (dmpark@koreabizwire.com)
