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13 April


Following Louis Vuitton, Koreans are unhappy with Chanel

Seoul Metropolitan Government is considering imposing an administrative order to suspend Chanel stores in Seoul

Chanel Korea Photo: Korea Times

/NOBOSTIVL/ Customers in South Korea are dissatisfied over French luxury brand Chanel's apparent repeated acts of feigned ignorance and mockery of local customers.This article appeared in Korea Times.

Recently nearly 1000 people flocked to Chanel boutiques across the country between May 11 and 13, triggering concerns of another cluster infection following a COVID-19 outbreak that took place in the international district of Itaewon the week before.

Without a doubt, it was apparent that Chanel would increase the prices of its luxury items, following the markup in European countries. However, the luxury brand kept mum and never hinted when it would raise prices despite its awareness that over 200 people would gather every day and risk infection just for a chance to purchase its products.

The Korea Times contacted Chanel Korea twice to seek comment on the matter but the fashion house's Korean branch only repeated "it is against the policy of our headquarters to reveal any information about price rises."

As a result, customers arrived in front of Chanel stores three hours in advance of their opening and the stores took no precautions to ensure people lining up would keep a distance between one another. Furthermore, none were seen wearing face masks properly and people were talking to each other.

Also, Chanel has targeted annual price rises for its products, particularly in spring and fall, when many newlyweds here purchase luxury items to give as gifts to one another or their in-laws.

This year, the French fashion house took advantage of customers who have been unable to travel and therefore have surplus cash to purchase luxury items.

As the world is still severely suffering from the coronavirus outbreak, people cannot travel abroad and Chanel knew people want a reward for staying home quarantined.

According to Chanel Korea, the luxury brand increased their products by a minimum of 7 percent up to a maximum of 18 percent. However, one handbag's price was increased by 26.1 percent compared to its previous price.

Had Chanel been fulfilling its corporate social responsibility here, consumers would have been more understanding.

However, since Chanel entered the local market, it barely made any donations nor raised funds for charity.

To avoid criticism that it is not giving anything in return for its flourishing business here, the luxury brand established its Korean office as a private limited company that has no external audit obligations.

Chanel never had to make public how much it made in the Korean market and how much tax it paid while recording estimated double-digit growth every year.

Last April, the Financial Service Commission announced the law has been revised to force private limited corporations to be subjected to external audits, which in the past was only imposed on companies listed on the stock market.

Unlisted companies that apply on two of the four following criteria will undergo external audits: Those having assets of more than 10 billion won, debt of over 7 billion won, sales above 10 billion won or more than 100 employees.

Chanel is no exception. However, if it becomes an incorporated company, the French luxury company will be able to maintain its opaque status.

The current law does not allow direct transfer of status from a private limited company to an incorporated company. But it could be possible if Chanel becomes a listed company to change its status to an incorporated company.