Shoppers wait in a line outside a department store in Seoul. (Yonhap)
French luxury fashion house Christian Dior racked up 104.7 billion won ($93.2 million) in operating profit last year despite the coronavirus pandemic, according to data from the Financial Supervisory Service.
Christian Dior Couture Korea, the operator of the brand’s South Korean unit which produces clothes, bags and makeup products, also saw its revenue rise 75.8 percent to 328.5 billion won, while its net profit jumped by 250 percent to 77.7 billion won.
The figures buck the trend seen in the wider retail sector as the coronavirus pandemic and strict social distancing rules dealt a severe blow to physical stores including department stores in 2020.
Supermarkets and department stores saw their revenue drop by 3 percent and 9.8 percent, respectively, while convenience stores and online shopping enjoyed increases in revenue by 2.4 percent and 18.4 percent, according to data from the Ministry of Trade, Industry and Energy.
At department stores, casual outfits and suits for women suffered respective 32 percent and 26.1 drops in revenue, driving down overall sales.
Revenue for luxury brands, however, rose by 15 percent from the previous year, becoming the only category in the department store sector to do so apart from household goods.
As the pandemic prolonged, “revenge spending” emerged as a new shopping phenomenon in Korea in which shoppers would buy expensive items as an alternative to international holidays to compensate for the lack of reward.
“To compensate for the disappointment caused by unexpected stressors like the coronavirus lockdowns, shoppers, particularly mid- and high-income people, tend to spend lavishly on rare luxury goods,” Lee Jun-young, a consumer science professor at Sangmyung University, told the Korea Herald in an interview last year.
Recent data from Statistics Korea showed that things are improving for department stores as sales increased 34 percent year-on-year in February.
But sales of semi-durable goods such as clothes, shoes and bags are still yet to return to pre-pandemic levels, the data showed.
By Yim Hyun-su (firstname.lastname@example.org)