Support totaling 20 billion KRW for the first and second half of this year
On the 16th, after signing a win-win cooperation agreement with Aritaum franchise stores at Amorepacific headquarters, the officials are taking a commemorative photo. From the left in the photo: Nam Hyo-cheol, Chairman of Jeon-gyeonghyeop; Ahn Se-hong, CEO of Amorepacific; Kim Ik-su, Chairman of Jeon-ahhyeop.
[Asia Economy Reporter Yujin Cho] Amorepacific Group has signed a win-win agreement with franchise owners of three brands: Innisfree, Etude, and Aritaum.
On the 21st, Innisfree reached an agreement with the management council on three proposals, including support worth 4 billion KRW, and mutually pledged to faithfully implement them.
The main contents of the agreement include special rent support for franchise stores and expanded profit sharing from the online direct mall. The franchise headquarters will provide approximately 4 billion KRW to franchise owners as one month’s rent and sales activity support to overcome the COVID-19 crisis. They also plan to discuss a separate strategy to increase the registration rate of ‘My Shop’ customers, introduced to promote mutual growth between the two parties.
Innisfree CEO Hye-young Lim said, “Innisfree franchise stores are important partners of Innisfree,” and added, “To respond to changes in online and offline distribution structures, both franchise owners and headquarters will continue to seek ways to increase profits.”
The agreement with Etude, signed on the 19th, includes a total of seven policies, including short-term support worth 1.4 billion KRW and mid- to long-term implementation plans.
To overcome the COVID-19 crisis, special rent support will be provided to each franchise store, and slow-moving inventory will be specially returned. For stores closing by the first quarter of next year, interior support fund returns will be waived, and all products will be accepted for return. In the mid- to long-term, franchise-exclusive products will be expanded, and the ‘My Shop’ system, which shares part of the online direct mall’s sales, will be revised to increase the profit ratio for franchise owners.
Etude CEO Jaewan Shim stated, “Since franchise stores are important partners who experience the brand and products, we will strengthen communication and cooperation through this agreement.”
On the 16th, at Amorepacific headquarters, three parties including Aritaum franchise headquarters, the National Franchise Association, and the National Franchise Owners Association agreed on seven implementation plans including support worth 6 billion KRW.
The franchise headquarters will support rent for franchise stores to overcome the COVID-19 crisis and specially accept returned inventory products within this year. For stores closing by the first quarter of next year, interior support fund returns will be waived and all products will be returned, totaling support of about 6 billion KRW.
To enhance franchise competitiveness, franchise-exclusive products will be supplied at 50%, and the ‘My Store’ system, which shares online direct mall sales, will be revised to increase the profit ratio for franchise owners.
Amorepacific CEO Sehong Ahn said, “Although the franchise business is facing great difficulties due to the spread of COVID-19, franchise stores are important channels and partners,” and added, “We will fulfill the role and responsibility of the franchise headquarters by establishing a proper win-win cooperative relationship and contribute to creating an atmosphere of mutual growth in the cosmetics industry.”
The total support amount for the second half of the year for the three franchises including Aritaum, Etude, and Innisfree by Amorepacific Group is about 12 billion KRW, and combined with the 8 billion KRW support provided in the first half to overcome COVID-19, the total is about 20 billion KRW.
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