By Park Si-soo
Luxury goods brand MCM is suffering from a sharp drop in sales here.
The brand has seen declines of around 10 percent in sales for three consecutive years, since 2012.
Industry watchers say there can be many reasons, starting with weaker spending, design problems and botched marketing strategies, as well as CEO Kim Sung-joo's recent appointment as president of the Korean Red Cross.
The consensus is that it could be difficult for the firm to realize its ambitious goal of 2 trillion won ($1.82 billion) in sales by 2020. MCM reported 400 billion won in sales last year, with just over half from overseas.
"I no longer use MCM because I don't feel privileged with it," said a 40-something career woman with a great interest in fashion and luxury goods.
She said she knows of many women who share that opinion.
Another customer, surnamed Park, complained that MCM's product designs can be blamed for the company's poor performance.
"Its design doesn't meet my style," Park said, referring to her backpack covered with small MCM logos.
A department store's sales clerk voiced a similar view, saying customers do not like to use natural colored bags or those coated with logos. Nevertheless, the firm continues to expand the lineup of products with design elements deemed "boring" by Koreans, because they appeal to Chinese customers, he said.
"MCM seems to focus on developing products for Chinese customers," the clerk said asking for anonymity. "For example, the company increased the production of gold or red bags, two colors favored by Chinese people."
According to data from the country's two major department stores, MCM's sales growth was almost flat in 2012 and fell 16 percent on average last year.
Its sales plunged 18.2 percent during the first nine months of the year, compared with the same period last year.
In August, Kim, chairwoman of Sungjoo Group that took over MCM in 2005, admitted that she had paid more attention to global business, especially China.
"But we are trying our best to improve the quality of the products and eventually position MCM as a top luxury brand in Korea," Kim said. "We have always focused on building up the brand power to compete with global fashion giants like LVMH."
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| Kim Sung-joo |
The brand has seen declines of around 10 percent in sales for three consecutive years, since 2012.
Industry watchers say there can be many reasons, starting with weaker spending, design problems and botched marketing strategies, as well as CEO Kim Sung-joo's recent appointment as president of the Korean Red Cross.
The consensus is that it could be difficult for the firm to realize its ambitious goal of 2 trillion won ($1.82 billion) in sales by 2020. MCM reported 400 billion won in sales last year, with just over half from overseas.
"I no longer use MCM because I don't feel privileged with it," said a 40-something career woman with a great interest in fashion and luxury goods.
She said she knows of many women who share that opinion.
Another customer, surnamed Park, complained that MCM's product designs can be blamed for the company's poor performance.
"Its design doesn't meet my style," Park said, referring to her backpack covered with small MCM logos.
A department store's sales clerk voiced a similar view, saying customers do not like to use natural colored bags or those coated with logos. Nevertheless, the firm continues to expand the lineup of products with design elements deemed "boring" by Koreans, because they appeal to Chinese customers, he said.
"MCM seems to focus on developing products for Chinese customers," the clerk said asking for anonymity. "For example, the company increased the production of gold or red bags, two colors favored by Chinese people."
According to data from the country's two major department stores, MCM's sales growth was almost flat in 2012 and fell 16 percent on average last year.
Its sales plunged 18.2 percent during the first nine months of the year, compared with the same period last year.
In August, Kim, chairwoman of Sungjoo Group that took over MCM in 2005, admitted that she had paid more attention to global business, especially China.
"But we are trying our best to improve the quality of the products and eventually position MCM as a top luxury brand in Korea," Kim said. "We have always focused on building up the brand power to compete with global fashion giants like LVMH."
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