Chanel halts boutique operation over Gucci pop-up store

French luxury brand Chanel abruptly suspended the operation of its boutique in the section of high-end brands within Galleria Department Store in an affluent neighborhood in Seoul on Wednesday, in protest against Italian rival brand Gucci opening its pop-up store near its shop.

Chanel said the Gucci pop-up store, slated to open March 1 through 15, will disrupt its own store’s visibility and operating environment.

It has not yet decided when to reopen the shop it launched in 1997, its first boutique-within-a-department-store in South Korea.

The Gucci pop-up shop is located at the main entrance on the first floor of Galleria Luxury Hall East and is surrounded by the Chanel, Chanel Watch & Jewelry and Cartier boutiques.

“It is a clear breach of contract with us regarding our store’s operating environment,” Chanel Korea said in a statement.

“We express our deep regret on Galleria’s decision that significantly damages our 25-year partnership.”

A Hanwha Galleria official said it was perplexed by Chanel’s abrupt suspension of the boutique, adding it had been in negotiations with both Chanel and Gucci over the pop-up store opening.

Hanwha Galleria is a retail arm of Hanwha Group.

At the temporary store, branded as Gucci Ancora, it will display the debut collection of Sabato de Sarno, who was appointed creative director of Gucci last year, featuring women’s clothing and accessories.

The Italian haute couture brand will host the collection at pop-up stores in 10 countries.

It is rare for a boutique within a South Korean department store to shut down in protest against a department store operator. The pop-up store space at Galleria in Apgugeong-dong has housed temporary boutiques for foreign designers such as Dior, Louis Vuitton, Max Mara and Bottega Veneta.

Some industry officials said Chanel’s decision to suspend the boutique operation reflects its accumulated complaints over the way Galleria manages foreign brands within the store.

“Since the space has been used as a permanent pop-up store for several years, the visibility of the Chanel store has decreased,” said a department store company official.

“This time, the relatively large scale of this Gucci pop-up store seemed to get on Chanel’s nerves.”

Chanel and Gucci are the most-loved designer brands in South Korea, along with Louis Vuitton. They are competing for the top spot in the country's luxury fashion market, ranked the world’s seventh in terms of sales in 2022.

Write to Ji-Yoon Yang at yang@hankyung.com
 

Yeonhee Kim edited this article.