Sales of the so-called 'Eru-sha (Hermès, Louis Vuitton, Chanel),' referred to as the 'three major luxury brands,' approached 4.6 trillion won last year.
According to the luxury goods industry on the 13th, sales of Hermès Korea, the Korean branch of Hermès, amounted to 964.3 billion won last year, a 21% increase from the previous year. Operating profit increased by 13% to 266.7 billion won, and net profit rose by 13% to 209.5 billion won.
The increase in sales is largely due to the effect of price hikes. Hermès raised prices more than twice last year. For non-luxury goods, consumption tends to decrease as prices rise. However, in the case of luxury goods, thanks to the love for luxury items among Koreans, consumption often does not decrease even with price increases.
The situation for Louis Vuitton is similar. Last year, Louis Vuitton Korea's sales totaled 1.7484 trillion won, an increase of 5.9% compared to the previous year. Operating profit rose by 35.7%, and net profit increased by 29.4%. The operating profit was 389.1 billion won, and the net profit was 281.6 billion won. Last year, Louis Vuitton raised prices twice.
Chanel, which also raised prices more than twice last year, saw its sales increase by 8% this year. Chanel Korea's sales reached 1.8446 trillion won. However, operating profit and net profit decreased by 1% and 6%, respectively. The operating profit was 269.5 billion won, and net profit was 206 billion won.
However, this year, the level of social contributions from the three luxury brands in Korea was not significant. Even compared to the dividends from their headquarters, it is at a low level relative to the profits made in Korea. While the Korean market is considered a major market for luxury brands, the contribution to social welfare is low compared to the large sales generated in Korea.
Last year, Hermès Korea paid 195 billion won in dividends to its headquarters. The domestic contributions of Hermès Korea last year were at a level of 550 million won. The contribution amount was about 0.28% of the dividends. By the same standard, Louis Vuitton Korea accounted for 0.18% as contributions. Louis Vuitton Korea paid a total of 217 billion won in dividends to its French headquarters and contributed 40.5 million won. Chanel Korea, which sent 130 billion won to its French headquarters, contributed 1.9 billion won. By the same standard ratio, it was 1.46%, making it relatively the best among the three luxury brands.