The impact of the economic downturn has confirmed that the growth of major luxury brands sold domestically last year has stalled. Out of 15 luxury brands present in the four major department stores, 11 brands experienced a decline in sales compared to the previous year. Even Chanel, which had boasted of unwavering growth, saw a decrease in department store sales.
A look at the department store sales of luxury brands last year obtained by ChosunBiz on the 23rd shows that Chanel's department store sales were 983.1 billion won, a 4% decrease compared to the previous year (1.01 trillion won). Sales at the department store dropped about 9% due to a 20-day suspension of operations at the Galleria luxury store in February last year, and sales also declined by about 2-3% at Shinsegae, Lotte, and Hyundai department stores.
Since entering the domestic market in 1991, it is reported that Chanel's department store sales have declined for the second time since the COVID-19 pandemic in 2020. However, Chanel's duty-free sales increased by 21% compared to the previous year, resulting in an overall sales increase of 1%, totaling 1.122 trillion won when combining department stores and duty-free sales.
On the other hand, brands such as Gucci (-25%), Dior (-10%), Fendi (-28%), Burberry (-16%), and Ferragamo (-15%) also experienced double-digit declines in department store sales last year. Popular luxury brands like Saint Laurent (-6%), Balenciaga (-5%), Bottega Veneta (-3%), and Celine (-1%) saw decreasing sales as well.
In contrast, the ultra-luxury brand Hermès, known alongside 'A·Lu·Sha' (Hermès, Louis Vuitton, Chanel), recorded a 19% increase in sales to 820.3 billion won compared to the previous year. Louis Vuitton, which had the largest sales among the 15 luxury brands, recorded a sales increase of 1.8% to 1.4333 trillion won.
The luxury brand with the highest growth rate last year was Miu Miu. As a sister brand of Prada targeting younger consumers, Miu Miu recently gained explosive popularity among the global MZ generation (Millennials + Generation Z, born from 1980 to 2004).
Goyard, famous for being a preferred bag among 'Gangnam moms,' also thrived with a 19% increase in sales. Prada (2%) and McQueen (3%) also showed stable growth.
However, it is reported that most brands in the luxury jewelry institutional sector showed a growth trend.
In the industry, considering that key luxury brands such as Chanel, Gucci, and Dior have implemented multiple price increases last year, there is an analysis that luxury consumption has significantly contracted.
According to a report published in January by McKinsey & Company, a global strategy consulting firm, in collaboration with the fashion media company 'Business of Fashion,' the global luxury industry growth rate is expected to reach only 1-3% from 2024 to 2027. Given that the average annual growth rate from 2019 to 2023 was 5%, this represents a significant slowdown. They specifically predicted that for the first time since 2016 (excluding the COVID-19 pandemic period in 2020), the creation of luxury value is expected to be lower than the previous year.