Bloomberg reported on the 25th that global fashion group LVMH (Louis Vuitton Moët Hennessy) will expand the flagship stores of its core brands Louis Vuitton and Christian Dior in Cheongdam-dong, Seoul.
As geopolitical and economic uncertainties grow in the world's two biggest markets, the United States and China, it appears the company is starting to focus in earnest on the Korean market as a new growth engine. Not only LVMH but other global high-end fashion brands are also accelerating their push into Korea, with Seoul emerging as a center of the global luxury market beyond Asia.
Citing multiple sources on the 25th, Bloomberg said Louis Vuitton and Dior, LVMH's two major fashion brands, plan to expand their flagship stores in Cheongdam-dong, Seoul within a few years. A flagship store is a large standalone location that goes beyond selling products to showcase a brand's identity and direction.
According to Bloomberg, Dior will embark on a full-scale store overhaul as early as 2027. The expanded space will include a permanent restaurant. Tiffany & Co., a jewelry brand under LVMH, also plans to open a flagship store in Cheongdam-dong in 2027. Watch and jewelry brand Bulgari is reportedly reviewing the opening of its first flagship store in Korea.
LVMH's move is a symbolic event showing that the global luxury market landscape is shifting. Bloomberg said, "As consumption outlooks wobble due to geopolitical and economic uncertainty in the United States and China, LVMH is seeking to diversify its global footprint." Last year, the Chinese luxury market shrank 20% compared with 2023, the steepest contraction in a decade. In the United States, since April this year, a new policy imposing an additional 10% tariff on EU-made items prompted luxury brands to raise prices by nearly 5% across the board. Even Japan, which enjoyed a brief boom thanks to a weak yen, has recently fallen into a slump as base effects faded.
In contrast, Bloomberg reported that Korea shows solid demand both in domestic consumption and tourism. Last year, the so-called big three luxury brands—Louis Vuitton, Hermès and Chanel—saw their combined sales in the Korean market rise by nearly 10% from the previous year to $3.3 billion (about 4.62 trillion won). Bloomberg said, "Koreans' persistent love of luxury, coupled with a resilient economy and rising consumer confidence, is becoming 'a ray of light in the darkness' for top-tier brands."
On top of a robust domestic market, Korea has recently seen a surge in foreign tourists. In particular, more visitors are coming from China and Japan, and as the won has weakened against the dollar, the "K-shopping" boom continues. Tourists who visited Korea last year spent about 9.26 trillion won, nearly 33% more than the year before. This is the highest tourism expenditure on record.
LVMH, led by global billionaire Chair Bernard Arnault, has already been investing in the Korean market for several years. Celine opened its first boutique in Korea in December last year, and Fendi unveiled its first flagship store in Korea a year earlier in 2023. Richemont Group, LVMH's biggest competitor among corporations, also opened a new flagship store for Swiss luxury watch brand Vacheron Constantin in Seoul in June. For the fiscal year ended in March, Richemont Group's sales in Korea surged 20% in just one year. Hermès relocated and reopened its Seoul flagship store in a larger space in August.
Experts said that, amid heightened uncertainty in global markets due to U.S.-China tensions and concerns about an economic downturn, Korea is a favorable region for ensuring stable sales. They added that, as K-culture leads trends across Asia, the market also serves as a "test bed" for assessing brand competitiveness.