Revenge spending boosts South Korea’s luxury retail
Both women’s and men’s clothing stores saw a rise in sales this year.
Despite the overall slump in consumption, the pent-up desire for consumption is leading to a growth in purchases of luxury goods in South Korea, Korea Bizwire reported based on industry reports.
Sales at Lanvin Collection and TIME brands rose 35% and 58% respectively in Q1, said Handsome Corp., an affiliate of Hyundai Department Store. Meanwhile, Isabel Marant, a French luxury brand imported by LF Corp., saw its sales grow 10% this year.
A similar phenomenon was also observed in the men’s clothing market. Thom Browne, which is imported and sold by Samsung C&T, a construction and fashion unit of Samsung Group, saw its sales jump 20% this year.
The fashion industry interpreted the promotion of high-priced brands as a combination of revenge spending and the Veblen effect at a time when low and mid-priced brands are struggling with the effects of the pandemic.
Revenge spending refers to the outpouring of pent-up desire for consumption, whilst the Veblen effect refers to how products sell better as prices rise due to conspicuous consumption.
In addition, with shopping trends rapidly reshaping the online market in the aftermath of the pandemic, some analysts say that these brands, which have quickly established online sales systems, are benefiting.
All of the brands whose sales have increased tout their wares via online portals, namely HANDSOME.COM, LF Mall, and SSF Shop.