Only One Store Left... Luxury Brand 'Givenchy' Begins Withdrawal from Korean Market

All Domestic Stores Closed Except Lotte Department Store Jamsil
Givenchy Korea: "Official Restructuring Plan Approved"

French luxury brand Givenchy has begun the process of withdrawing from the South Korean market. Givenchy, a brand under LVMH (Louis Vuitton Moet Hennessy), has closed most of its department store locations in Korea and has now entered the full-scale business closure phase by recognizing a restructuring provision of approximately 1.2 billion KRW. Givenchy Korea, which failed to achieve significant results in the domestic market amid a global economic slowdown and a decline in luxury consumption, appears to have ultimately chosen to cease operations.

According to the retail industry on July 2, the only Givenchy boutique currently operating in Korea is at Lotte Department Store Jamsil. Givenchy Korea withdrew from the Hyundai Department Store Main Store and Trade Center locations in 2021, and last year closed its stores at Shinsegae Department Store Gangnam and Busan Centum City. In the first half of this year, it also ended operations at the Lotte Department Store Main Store and Busan Main Store. A department store official commented, "It is highly likely that the Jamsil location will also close around the time its lease contract expires."

The beauty division of Givenchy is operated directly by LVMH headquarters. Stores are maintained on the basement and first floors of major locations such as Lotte Department Store Main Store, Jamsil, and Shinsegae Department Store Gangnam, and these are reportedly excluded from the current restructuring. Givenchy appears to have chosen a 'selection and concentration' strategy by winding down its fashion division while continuing its beauty business.

Since last year, Givenchy Korea has begun restructuring through organizational streamlining and cost reduction. According to Givenchy Korea's audit report, recruitment expenses were reduced from 270 million KRW in 2023 to 68.43 million KRW last year. During the same period, advertising and promotion expenses decreased from 1.3 billion KRW to 500 million KRW, and rent expenses fell from 2.7 billion KRW to 1.9 billion KRW. Tangible assets such as store and office spaces also plummeted by 80%, from 900 million KRW to 100 million KRW in just one year.

A new restructuring provision of 1.2 billion KRW was also recorded. This is a preemptive accounting measure to prepare for future costs related to restructuring, including employee layoffs, store closures, and the winding down of business divisions. Givenchy Korea stated in its audit report, "The company has approved a specific and formal restructuring plan and has begun implementing it." Industry insiders widely interpret this compensation as being directly related to the closure of the Jamsil store.

Givenchy officially entered the Korean market in 2012 through Shinsegae International (SI). Givenchy is a luxury designer brand founded by the late French designer Hubert de Givenchy. As brand recognition grew in Korea, Givenchy ended its partnership with Shinsegae International in 2019 and established Givenchy Korea, shifting to a direct business model in the Korean market. However, contrary to expectations, the company failed to establish meaningful connections with domestic consumers, resulting in continued poor performance. Last year, sales amounted to 10 billion KRW, a 17% decrease from the previous year's 12 billion KRW, and the company posted an operating loss of 2.6 billion KRW. Givenchy Korea has entered a state of complete capital impairment, with liabilities exceeding assets, and accumulated deficits have reached 8 billion KRW.

The industry also cites the slowdown in the luxury market as a background for Givenchy's withdrawal. Consulting firm Bain & Company revised its luxury market growth forecast for this year from "up to 4% growth" to "a 2-5% decline." LVMH's global sales in the first quarter of this year were 20.311 billion euros, down 1.8% year-on-year. Kering Group, which owns Gucci and Saint Laurent, also saw its sales plummet by 12% last year.

A fashion industry insider commented, "Ultra-high-end brands with strong brand loyalty, such as Hermes and Chanel, remain relatively stable," adding, "Premium mid-tier brands like Givenchy are suffering significant setbacks."