Sephora Korea to Close Stores Amid Financial Losses
Sephora, the renowned French cosmetics retailer, will gradually terminate operations after less than five years of presence in South Korea. Sephora is set to withdraw from
Sephora Korea to Close Stores Amid Financial Losses
Sephora, the renowned French cosmetics retailer, will gradually terminate operations after less than five years of presence in South Korea. Sephora is set to withdraw from the Korean market due to sustained financial losses.
This decision marks the end of an era for the beauty giant, which had initially launched with high hopes and fanfare in the upscale Gangnam District of Seoul in 2019. It opened five additional stores, including retail locations in Myeong-dong, central Seoul; Sinchon in western Seoul and Suwon, Gyeonggi.
“With heavy hearts, Sephora has decided to terminate its operations in Korea,” the French cosmetics retailer announced in an Instagram post, written in Korean, on Tuesday.
Credit: Sephora Korea, Store Closes Announcement
Despite the initial excitement that greeted Sephora’s entry into South Korea, with long queues marking the opening of its flagship store, the retailer’s journey has been fraught with challenges. The COVID-19 pandemic severely impacted Sephora’s…
experiential retail strategy, a cornerstone of its global success. View this post on Instagram A post shared by Sephora Korea 세포라 코리아 (@sephorakr) Sephora Korea‘s financial struggles were evident, with a 12.7 percent drop in sales to $9.7 million in 2021 compared to 2020.
In 2022, plans to expand to 14 stores by 2022 were curtailed as although revenue increased by 10 percent to $10 million (13.7 billion won), operating losses widened by 21 percent to 17.6 billion won operating losses, escalating from 12.4 billion won in 2020 to 17.6 billion won in 2022.
By February 2024, Sephora operated only five stores in South Korea, fewer than anticipated, and had closed two stores in the last two years. The competitive landscape of Korea’s beauty retail sector also contributed to Sephora’s difficulties.
Despite Sephora’s global success, with LVMH’s selective retailing branch reporting $19.2 billion in revenue in 2023, up 25% from 2022, and profits from recurring operations jumping 76%, the brand struggled to replicate this success in South Korea…
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