Bernard Arnault LVMH CEO

By Park Si-soo

LVMH Group, owning dozens of prestigious brands such as Louis Vuitton, Christian Dior, Fendi and Bvlgari, is facing a strike by its Korean salesclerks and transport workers following botched wage negotiations.

Members of LVMH’s union in Seoul staged a rally in Nonhyun-dong, a district with scores of luxury brand stores, Thursday, demanding the Paris-headquartered company return to the negotiating table. They want the firm to offer better working conditions, warning that it will “pay the price” if it does not accept their demands. They will stage a second “warning” rally at the same location today, and plan to halts sales for three days between late May and early June.

The union said in a statement that it will seek arbitration and, if deemed necessary, go on strike.

“This dispute is caused by the (LVMH) headquarters’ unacceptable suggestion on a pay rise,” the union said in an article posted on its website. “We need to show how powerful our collective action can be.”

According to union members, their final round of wage negotiations with management ended fruitlessly on Monday. They said the company suggested a 4 percent increase in basic salary and 50 percent of basic salary as a conditional bonus. The bonus was to be given only if the firm’s sales during the first quarter of the year meets the target set by headquarters. Information on the target was not available.

“It was the worst possible suggestion, compared with wage increases at rival companies,” a union member wrote online. “We work laboriously all year around, which means we deserve 50 percent of our basic salary as a fixed bonus, regardless of sales record. It’s hard to understand why the firm wants to pay it conditionally. I think it is trying not to pay the bonus.”

LVMH was not immediately available for comment since the group doesn’t have a spokesman in Korea.

The group’s performance remains undiminished, despite the global economic slump. It recorded a dramatic 25 percent increase in first quarter revenue to 6.6 billion euros.

Analysts said the main reason was explosive growth in the Asian market.