[THE INVESTOR] SKINFOOD has decided to shut down its outlets at major hypermarket chains in Korea, industry sources said on Oct. 16.
Although SKINFOOD declined to confirm the news, it has reportedly called for emergency meetings with hypermarket chain operators, including E-mart and E-Land Retail, to discuss the closure of its stores.
“We have agreed with SKINFOOD to close down its 22 outlets at our stores in November,” an E-Land Retail spokesperson told The Investor. However, an E-mart official said that discussions with the Korean cosmetic giant are still pending.
According to industry sources, the decision was made as the company does not have sufficient sales and liquidity to bare the high commission fees of hypermarket chains. Early this month, SKINFOOD announced that it has filed for court receivership due to its mounting losses.
The firm, once was ranked as one of the top three budget cosmetics brands here, has suffered losses since 2014. Last year, its sales dropped 25 percent won to 126.9 billion (US$112.46 million) from 169 billion won in 2016, while its operating loss reached 1 billion won.
SKINFOOD’s fall was mainly due to increasing competition from other similar brands and altered trend of Korean customers mainly shopping at health and beauty stores, which sell differentiated budget cosmetics brands.
By Song Seung-hyun (email@example.com)