AmorePacific's Etude House rebounds amid sales diversification

Etude House store in Seoul / Courtesy of AmorePacific

By Kim Jae-heun

Etude House, a high street shop brand of AmorePacific, has made a successful rebound, posting its highest operating profit growth in the first quarter of this year. This success has been achieved due to the diversification of its retail channels and the efficient management of offline stores, according to company officials Thursday.

The cosmetic brand achieved an operating profit of 5 billion won ($3.86 million) last year, but it improved further, marking 5.3 billion won in just the first quarter of this year. Its business expansion in CJ Olive Young, the country's largest health and beauty store, as well as Naver Smart Store online was effective.

“Etude House focused mainly on expanding its offline business until 2016. However, after its business in China was hit by geopolitical issues and the COVID-19 pandemic broke out, the brand decided to cut down the number of stores and strengthen its online business,” an AmorePacific official said. “We always had confidence in our products, so it was just a matter of time before Etude House would witness a rebound.”

Etude House is one of AmorePacific's cosmetics brands that was severely affected by the pandemic and China's economic retaliation due to the Korean government's decision to deploy a U.S. Terminal High Altitude Area Defense system in 2016.

The brand registered a deficit in 2018 and faced capital impairment in 2020 after showing four consecutive years of operating losses since 2018.

Starting in 2019, Etude House started to reduce its number of stores in China and closed down its operation there completely in 2021. It also pulled out of the local duty free shop business, while decreasing the number of stores in Korea too. Currently, the brand operates only 67 shops across the country.

Instead, it decided to expand its sales in Korea's largest health and beauty product store CJ Olive Young, which operates 1,298 stores here as of 2022, and improve its online business by selling its products on Naver Smart Store.

Etude House also focused on its overseas sales in Japan, where the brand was picked as the most popular Korean cosmetics brand in January by the Japanese ranking website Everyone's Ranking.