Korea ignored as fashion producer

The sleek handbag bearing the “Made in Italy” label has a secret: It may actually have been designed in Korea.
Fashion companies here are seen as great designers of clothes and other items for foreign brands, but production is usually done elsewhere because Korea is not seen as a viable producer of luxury goods.
Sungjoo Design Tech & Distribution Inc., a mid-sized Korean clothing distributor, has been an exclusive licensee of Germany-based MCM’s products for 11 years, and is now pushing for a purchase of the struggling brand after it began designing MCM’s signature handbags and became involved in its international marketing strategies in March.
Sungjoo’s successful designs helped generate 62 billion won ($60 million) in sales last year in Korea, which exceeded sales in Germany, and has given the Korean brand leverage to begin working with MCM on a deal to take over the brand, possibly by October.
A Sungjoo official said more than half of the goods the company designed were made in Italy. Han Young-ah, Sungjoo’s marketing director, explained that although the quality of Korean-made products is on par with other foreign luxury lines, the nation has yet to draw attention from foreign buyers.
“To sell our designs in foreign markets, actual production has to take place in countries other than our own,” Ms. Han said. “That’s the reality.”
For this reason, Amore Pacific decided to produce its new perfume, Lolita Lempicka, elsewhere after it created the fragrance in Korea.
Even lower-end lines choose Korea for designs but not for production, mainly because China and other Asian nations have much cheaper labor.
Wal-Mart and J.C. Penney, two large American retailers, purchase clothes and accessories from Korea. Jeon Jong-hyun, a J.C. Penney official, said the retailer is increasing the number of purchases here every year because of the clothes’ “excellent design.”
However, most of these clothes are not made in Korea. Instead, Wal-Mart and J.C. Penney are choosing Chinese production facilities.
Cho Jin-hee, head of Wal-Mart’s global procurement office in Korea, said it costs up to 20 percent more to make the clothes here compared to China.

by Yang Sunny, Hong Joo-yun