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Luxury brands' sales drop amid economic slump

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(Globalpost/GlobalPost)

SEOUL, July 11 (Yonhap) -- Sales of foreign luxury brands dropped in South Korea in their fiscal 2012, data showed Thursday, due mainly to the protracted slump in the local economy, which dented consumers' sentiment.

According to the data compiled by the Financial Supervisory Service, Burberry Korea saw their sales drop 5.3 percent on-year to reach 228.1 billion won (US$201.5 million) in fiscal 2012. The firm closed its books on March 31.

Net profit of the British brand plunged 35.1 percent to reach 16.8 billion won over the cited period, the data showed.

Other designer goods also lost ground in fiscal 2012, with Gucci Group Korea Ltd. posting 282.6 billion won in sales, down 4.5 percent from a year earlier. The company closed its book on December 31.

Market watchers said the stagnant performances posted by luxury brands operating in South Korea came as the protracted economic slowdown gave local consumers limited leeway in making extravagant purchases.

Ferragamo Korea Ltd., whose parent company is Salvatore Ferragamo Italia SpA, also saw its net income drop 12.8 percent over the cited period, despite that its sales edged up 1.2 percent to 98.4 billion won.

Prada Korea Ltd., a unit of Prada SpA, on the other hand, saw its net income advance 10.5 percent on-year to reach 58.8 billion won in fiscal 2012. The number, however, slowed from a 64.2 percent growth tallied in fiscal 2011.

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