The world's top three luxury brands -- Hermès, Louis Vuitton and Chanel -- generated nearly 4 trillion won in sales in South Korea last year.
According to audit reports of Hermès Korea, Louis Vuitton Korea, and Chanel Korea on April 16, their combined sales stood at 3.9338 trillion won (US$2.9973 billion) last year. This is a 22 percent increase from 3.214 trillion won (US$2.449 billion) in the previous year.
The brand with the highest sales was Louis Vuitton Korea. Last year, its revenue increased 15 percent year-on-year to 1.69 trillion won (US$1.29 billion), and its operating profit swelled 38 percent to 417.7 billion won (US$318.3 million).
Chanel Korea posted 1.59 trillion won (US$1.21 billion) in sales and 412.9 billion won (US$314.6 million) in operating profit. These figures are up 30 percent and 66 percent year on year, respectively. Hermès Korea racked up 650.2 billion won (US$495.4 million) in sales, up 23 percent year-on-year. Its operating profits rose 23 percent to 210.5 billion won (US$160.4 million).
The three companies also increased their dividends in tandem. Louis Vuitton Korea paid out 222.2 billion won (US$169.3 million) in dividends last year, a 44 percent increase from the previous year. Chanel Korea also paid out 295 billion won (US$225 million) in dividends, up 327.5 percent from the previous year. Hermès Korea paid out 117 billion won (US$89 million) in dividends, a 22 percent increase from the previous year.
However, donations were minimal. Louis Vuitton Korea did not disclose any donations last year, while Chanel Korea disclosed donations of 1.1584 billion won (US$882,490). This is a 300 million won increase from the previous year (728 million won). Hermès Korea reported donations of 561.7 million won (US$427,913), a decrease of 100 million won from 458.35 million won (US$349,179) the previous year.
The three luxury goods companies grew rapidly in Korea due to an increase in revenge spending as people were unable to travel abroad during the COVID-19 pandemic period. Even in 2022 when high inflation and interest rates continued, the companies enjoyed strong sales and raised prices as many as four times.
According to market research firm Euromonitor, South Korea’s luxury goods market was valued at US$14.65 billion (about 18.74 trillion won) in 2021, ranking seventh in the world. In terms of per capita consumption, Korea ranked highest in the world. According to investment bank Morgan Stanley, Korea's per capita spending on luxury goods was US$325 (about 420,000 won) last year, ahead of the United States ($280) and China ($55).
