Bags / Shoes & Accessories

According to Korean media reports, several leading domestic fashion companies have recently entered into a restructuring process related to licensing agreements with foreign luxury brands.

Companies including Samsung C&T, Shinsegae International, LF (LF), Lotte Global Fashion Distribution (Lotte GFR), Kolon Fashion Culture (Kolon FnC) and other companies have all worked to establish overseas luxury brands in the Korean market.

However, once these local companies succeed in representing overseas brands, foreign brand owners will seek to regain control by directly managing their assets in South Korea.

According to reports, especially for foreign luxury leather goods brands, South Korean media cited the well-known French luxury group (lvmh) as an example. Before July this year, LVMH was managed by Korea Kolon FnC. Due to the conflict between inventory handling and boutique management, the local licensor had to work hard to delay Louis Vuitton's entry into South Korea.

Another example is that when Lotte GFR was first promoted in 2018, it had 12 overseas brand distribution rights, including Italian leather goods company Furla. However, by the second half of this year, the Seoul-based company has only two brands left, one is Kenzo, a subsidiary of lvmh, and the other is Spanish company Bimba Y Lola. The products of these two companies focus on clothing, not leather products.

In fact, as overseas luxury leather goods brands seek self-control of the Korean market and to some extent get rid of middlemen, Korean domestic companies are currently turning their investment targets to overseas ready-to-wear (RTW) brand companies.

For example: LF Group is pursuing a ready-to-wear brand strategy due to its reduced reliance on leather goods, including cooperation with Ba&sh, Isabel Marant and Joseph brands, although the group still maintains its partnership with Birkenstock and Cole Haan shoes Licensing agreement for similar brands.

The contract signed by Samsung C&T and Italian leather goods company Valextra will also expire this year. Local media said that Samsung C&T will turn to seeking cooperation with clothing-centric brands, such as French and Japanese clothing brands.