Sephora, squeezed by Olive Young, pulls out of Korea

Industry

Published: 19 Mar. 2024, 18:56 Updated: 20 Mar. 2024, 13:53

Sephora, squeezed by Olive Young, pulls out of Korea

Sephora's first Korean branch at Parnas Mall in Gangnam District, southern Seoul [JOONGANG PHOTO]

Sephora is bidding farewell to the Korean market.

“With heavy hearts, Sephora has decided to terminate its operations in Korea,” the French cosmetics retailer announced in an Instagram post, written in Korean, on Tuesday.

Sephora Korea disclosed plans for a phased withdrawal, starting on May 6, that will impact its online mall, mobile app, and brick-and-mortar outlets across the country.

Sephora, operated by French luxury conglomerate LVMH, arrived in Korea in October 2019 with a glitzy flagship store at Parnas Mall in the upscale neighborhood of Samseong-dong, Gangnam District, southern Seoul. It opened five additional stores, including locations in Myeong-dong, central Seoul; Sinchon in western Seoul and Suwon, Gyeonggi.

The decision to exit the Korean market reflects Sephora's struggle to grasp the nuances of local consumer preferences in country's beauty landscape, which is the stronghold of CJ Olive Young. The beauty chain has steadily expanded, with its store tally increasing from 1,246 in 2019 to 1,339 by the third quarter of 2023.

“When Sephora entered the market, it should have tailored its strategy to stand out, but it struggled to adapt locally,” an industry insider said on condition of anonymity. “Despite the high quality and relatively lower prices of Korean cosmetics, Sephora failed to offer enough unique advantages, which is disappointing from a strategic standpoint.”