This is the second in a series highlighting operations of foreign luxury brands in Korea. ― ED.
By Park Jae-hyuk
Bulgari has been globally known as one of the most socially responsible luxury brands for its various activities like its partnership with Save the Children. The Italian brand, however, seems to act differently in Korea.
The brand specializing in jewelry and fragrances has continued to emphasize its ideal of "sustainable development" for global society as it notes on its official website the definition of corporate social responsibility (CSR).
"CSR is about balancing social, environmental and economic values into the core strategy and operations of a company, in order to improve management of business risks and opportunities while enhancing long-term social and environmental sustainability," it says.
But Bulgari seemingly does not apply these ideals to Korea where the fashion brand has profited handsomely. In particular, Bulgari Korea does not have a donation category on its financial statements, which means it does not donate at all.
Instead, the local affiliate, which is led by CEO Lee Hyun-kyung, distributed 73 percent of its net profits to shareholders in 2014, causing criticisms that its Italian headquarters holding 100 percent share of Bulgari Korea regards the Korean market as an automatic cash machine.
Since 2009, Bulgari has annually released limited edition rings and necklaces, donating 20 percent of their sales to Save the Children. The custom-designed collections have helped to raise $50 million for the international organization so far.
The goods have also earned huge popularity in Korea despite their high price tags of hundreds of dollars. During the Chuseok holidays last year, Chinese tourists lined up in front of duty free stores here to buy the accessories.
"The iconic B.zero1 necklace costing $510 was sold out in two hours every day after the store opened in the morning," a duty free store employee said.
Thanks to its popularity, Bulgari Korea in 2015 posted 109 billion won ($95 million) in sales, 15.8 billion won in operating profits and 12.5 billion won in net profits.
When contacted, a Bulgari Korea spokesperson said the criticisms are misleading and overblown.
"The Italian headquarters have donated to Save the Children on a global scale," the spokesperson said. "So the financial statements of the local branch may not fully reflect our efforts to society."
In response, critics argue that the global headquarters' donations do not benefit Koreans. They claim Bulgari Korea should spend a part of its profits here where they earn money.
Bulgari wrote on its official website that its donations also benefit under-privileged children in several developed countries, such as Australia, Japan, the U.K and the U.S. However, the spokesperson was not sure whether the money contributed to Save the Children is spent on Korean children.
In 2014, Korean actor Cha Seung-won joined Bulgari's photography event in Beijing to support Save the Children along with other celebrities including Eric Bana, Luke Evans and Ben Stiller. But it remains unknown whether the Korean actor's participation helped needy children in Korea.
Founded by Sotirios Voulgaris in Rome, 1884, Bulgari has expanded its presence in the global market as an international fashion powerhouse. The brand was acquired by French luxury group Moet Hennessy Louis Vuitton SE in 2011.
By Park Jae-hyuk
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| Bulgari Korea CEO Lee Hyun-kyung |
The brand specializing in jewelry and fragrances has continued to emphasize its ideal of "sustainable development" for global society as it notes on its official website the definition of corporate social responsibility (CSR).
"CSR is about balancing social, environmental and economic values into the core strategy and operations of a company, in order to improve management of business risks and opportunities while enhancing long-term social and environmental sustainability," it says.
But Bulgari seemingly does not apply these ideals to Korea where the fashion brand has profited handsomely. In particular, Bulgari Korea does not have a donation category on its financial statements, which means it does not donate at all.
Instead, the local affiliate, which is led by CEO Lee Hyun-kyung, distributed 73 percent of its net profits to shareholders in 2014, causing criticisms that its Italian headquarters holding 100 percent share of Bulgari Korea regards the Korean market as an automatic cash machine.
Since 2009, Bulgari has annually released limited edition rings and necklaces, donating 20 percent of their sales to Save the Children. The custom-designed collections have helped to raise $50 million for the international organization so far.
The goods have also earned huge popularity in Korea despite their high price tags of hundreds of dollars. During the Chuseok holidays last year, Chinese tourists lined up in front of duty free stores here to buy the accessories.
"The iconic B.zero1 necklace costing $510 was sold out in two hours every day after the store opened in the morning," a duty free store employee said.
Thanks to its popularity, Bulgari Korea in 2015 posted 109 billion won ($95 million) in sales, 15.8 billion won in operating profits and 12.5 billion won in net profits.
When contacted, a Bulgari Korea spokesperson said the criticisms are misleading and overblown.
"The Italian headquarters have donated to Save the Children on a global scale," the spokesperson said. "So the financial statements of the local branch may not fully reflect our efforts to society."
In response, critics argue that the global headquarters' donations do not benefit Koreans. They claim Bulgari Korea should spend a part of its profits here where they earn money.
Bulgari wrote on its official website that its donations also benefit under-privileged children in several developed countries, such as Australia, Japan, the U.K and the U.S. However, the spokesperson was not sure whether the money contributed to Save the Children is spent on Korean children.
In 2014, Korean actor Cha Seung-won joined Bulgari's photography event in Beijing to support Save the Children along with other celebrities including Eric Bana, Luke Evans and Ben Stiller. But it remains unknown whether the Korean actor's participation helped needy children in Korea.
Founded by Sotirios Voulgaris in Rome, 1884, Bulgari has expanded its presence in the global market as an international fashion powerhouse. The brand was acquired by French luxury group Moet Hennessy Louis Vuitton SE in 2011.
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