Luxury brands post record sales in Korea

So-called “Eru-sha,” a term South Korean consumers use for Hermès, Louis Vuitton and Chanel, posted record results last year, underscoring the resilience of the luxury market despite a weak economy.

Hermès Korea reported sales of 1.1251 trillion won, up 16.7 percent from a year earlier, surpassing the 1 trillion won mark for the first time. Operating profit rose 14.5 percent to 305.5 billion won.

Chanel Korea topped 2 trillion won in annual sales for the first time, with revenue of 2.0126 trillion won and operating profit of 335.8 billion won, up 9.1 percent and 24.6 percent, respectively. Louis Vuitton Korea also posted record sales of 1.8543 trillion won, up 6.1 percent, while operating profit jumped 35.1 percent to 525.6 billion won.

The strength extends beyond the three brands. Bulgari Korea recorded a 37 percent increase in sales, while Tiffany & Co. Korea saw a 19 percent rise. Rolex Korea reported a 25 percent gain in revenue.

Repeated price increases have been a key driver. Chanel alone raised prices on jewelry and accessories five times last year. With sales staff reinforcing the view that prices will continue to climb, consumers have continued to spend.

The strong performance of foreign luxury brands has also highlighted a gap, as South Korean labels remain largely absent from the high-end segment. Concerns grow when a significant share of earnings is paid out as overseas dividends while local contributions through social initiatives remain limited.

Whether South Korea can develop its own global luxury brand remains an open question. Industry officials note that while U.S. brands are widely known, they are not typically classified as luxury, suggesting that high prices alone do not define the category. Building a luxury brand requires world-class designers, a manufacturing base capable of producing premium goods and a long-term vision that goes beyond profit. Louis Vuitton’s emphasis on craftsmanship, known as “savoir-faire,” and Chanel’s positioning as a form of cultural heritage are often cited as defining elements.

National and city branding also play a role, as leading luxury brands are closely tied to destinations that attract global visitors.

China offers a useful comparison. A 2025 report by Bain & Company on the Chinese luxury market found that local brands such as Songmont are gaining ground as overseas brands lose momentum. The report said China is redefining luxury based on its own identity, with the sector entering an early stage of development.

Japan provides another example, having spent decades cultivating globally recognized brands such as Issey Miyake and Kenzo, which continue to expand their global reach.

South Korea has the capacity to nurture its own global luxury brands. The country’s brand power has risen sharply, supported by cultural exports such as BTS and broader K-pop content. To build on that momentum, experts say South Korea needs to strengthen its industrial base for designers and artisans while enhancing protections for intellectual property.

At a time when a luxury brand can signal national prestige, calls are growing for a more deliberate strategy to cultivate a flagship label that represents South Korea on the global stage.