Sephora to exit S.Korean market in May

Sephora, the world's leading multi-brand beauty retailer and an affiliate of French luxury conglomerate LVMH, announced on Tuesday that it will exit the South Korean market in May.

Launching its first store in Seoul's upscale Gangnam district in October 2019, Sephora expanded across key locations including Myeongdong, Sinchon, Jamsil, Yeouido, and Gwanggyo.

Despite these efforts, the retailer faced significant challenges, exacerbated by the COVID-19 pandemic beginning in 2020, which led to consecutive annual losses - 12.4 billion won ($9.26 million) in 2020, 14.5 billion won in 2021, and 17.6 billion won in 2022.

Critics point to Sephora's inability to adapt to the rapidly changing market conditions in South Korea, such as high rental costs and shifting consumer trends.

In contrast, local competitor CJ Olive Young has seen robust growth, increasing its store count from 1,265 at the end of 2021 to 1,339 by the end of 2022, with sales surging by an estimated 40% year-on-year to 3.9 trillion won.

Sephora's phased closure will begin on May 6, shuttering its online platform, mobile application, and all physical outlets in South Korea. 

Write to Hyung-joo Oh at ohj@hankyung.com