Tough Times Befall Designers Boutiques
By Jane Han
Staff Reporter
Years of relentless attempts have propelled many Korean fashion designers past the high bar of Europe's fashion industry, but they're starting to get killed at none other than the home-front, as local shoppers ditch them for foreign makers.
Won Jae Fashion, a reputable brand of more than 30 years, was one of the first to go amid the financial crunch squeezing some of the longest-running domestic fashion labels.
The brand run by Lee Won-jae, one of the country's first-generation designers, went bankrupt last Wednesday due to soaring imported textile costs and worsening sales.
The news sent a warning to the entire fashion industry because the symbolic brand was considered to be in solid standing with 30 stores operating in major department stores such as Shinsegae and Lotte.
The business dates back to the mid-1970's, when Lee first started running a small custom tailor shop in shopping central Myeong-dong.
``Won Jae Fashion's collapse means that there will be more boutiques going down the same path,'' said Kim Yoon-sung, a merchandiser at Hyundai Department Store.
She said high-end shoppers continue to buy from European brands Hermes, Louis Vuitton and Gucci, but the ``middle rich'' class have either stopped spending on boutique labels or upgraded their purchases to imports.
According to retailers, homegrown labels enjoyed popularity until 2004 with 40 to 50-something female shoppers being their main consumer base. However, they went into decline once their prices became less competitive compared to their European counterparts.
Some of the most well-known Korean designers include Lie Sang-bong, Troa Cho, Gee Choon-hee, Andre Kim and Miss Gee.
``The reality is that shoppers who can afford designer brands are willing to spend a little more to purchase foreign labels over those made here,'' said an official of Lotte Department Store, who added that domestic designers need to set themselves apart either with better prices or designs.
Not all European makers, however, are safe from the latest money crunch. Even popular labels Marina Rinaldi and Basler have recently folded their Korean business, citing slow sales. Max Mara and Missoni also downsized by shutting some stores here.
``The top brands seem to be riding out the slump, but for the rest,'' said Kim, ``it's a fashionable game of survival.''
Analysts forecast that the luxury-goods market will contract in 2009, which will push companies already in debt such as Prada, Escada and Gianfranco Ferre into more difficulty.