South Korea: from leathergoods to RTW
Local media in South Korea have reported on the fact that several leading domestic fashion companies have recently entered into a process of reorganisation in relation to their licensing agreements with non-Korean luxury brands.
Enterprises including Samsung Construction and Trading Corporation (Samsung C&T), Shinsegae International, LF Corp (LF), Lotte Global Fashion Retail (Lotte GFR) and Kolon Fashion n Culture (Kolon FnC) have all previously worked to establish overseas luxury brands in the Korean market.
Once local companies’ tactics have proven successful, however, foreign brand owners have themselves then sought to take back control through managing their assets directly in the country.
This has particularly been the case with non-Korean-owned luxury leathergoods brands, according to reports. LVMH-owned Loewe, managed by Kolon FnC in South Korea until this past July, was cited as just one example in the Korean press.
Reportedly, the local licensee had to fight to postpone Loewe’s direct entry into the country, due to conflicting issues (later resolved) surrounding inventory handling and boutique management.
As another example, when Lotte GFR first launched in 2018 it had the rights to twelve overseas brands, including Italian leathergoods business Furla. By the second half of this year, however, the Seoul-headquartered company could only count two, LVMH-owned Kenzo and Spanish enterprise Bimba Y Lola, both of which can be said to more so specialise in clothing than in leathergoods.
According to sources familiar with the matter, the group is now forging ahead with categories - such as athleisure and contemporary fashion - which it believes have the greatest potential for expansion in the market.
Indeed, as leathergoods brands themselves seek a tighter hold on the Korean Peninsula, doing away with intermediaries to a certain extent, the current trend for domestic companies is to invest in overseas ready-to-wear (RTW) enterprises instead.
LF is leading in this regard. With less reliance on leathergoods, the group is pursuing a strategy which is more focused on ready-to-wear labels including Ba&sh, Isabel Marant and Joseph, although it does maintain licence agreements for Birkenstock and Cole Haan.
In a similar vein, Samsung C&T is said to be looking to allow its contract with Italian leathergoods company Valextra to expire this year. Local media suggested that the business would instead pursue growth for its other, more apparel-centric brands, such as French Japanese label Maison Kitsuné.
Image: Loewe.
