French luxury brand Chanel’s annual sales in South Korea topped 1 trillion won last year, but its operating profit has dropped by more than 30%, according to the audit report disclosed by Chanel Korea on April 16.
Chanel Korea’s sales in 2023 reached 1.7 trillion won ($1.2 billion), up 7% from the previous year. The luxury brand’s operating profit fell 34% to 272 billion won, and net profit declined 29% to 219.7 billion won.
“Chanel Korea’s operating profit decreased last year because we invested heavily in brand and human resources after pandemic restrictions were lifted amid a changing market environment,” said John Hwang, CFO of Chanel Korea.
Last year, Chanel increased investment in branding and promotional efforts to 166.2 billion won, up 32% from the previous year. The company said this led to substantial growth across its fashion, watches, fine jewelry, fragrances, and beauty divisions. The company also ramped up investment in human resources to 134.6 billion, a 17% increase from 2022. This included an 18% growth in full-time retail and office positions and enhanced training and development opportunities.
The fashion division opened several boutiques in Jeju and Seoul to boost customer experience with its ready-to-wear collections and accessories. The fragrance and beauty segment successfully gained market share amid a changing environment, and the watch and fine jewelry segment strengthened its presence through successful pop-up stores in department stores.
Luxury brands Dior and Louis Vuitton, which previously disclosed earnings, also reported a year-on-year decline in operating profit last year.
