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Chanel returns to Lotte

French brand Chanel cosmetics will reopen concessions at Lotte department stores in Korea after pulling out three and half years ago.

Chanel cosmetics has resolved its conflict with Lotte over space and location which saw the French brand pull out of seven Lotte department stores in 2009 after being told to reduce and relocate its cosmetics booth due to low sales.

Chanel sales ranking within Lotte stores plunged to fifth place in 2008 as customers switched to local high-end brands like Sulwhasoo.

However, customer demand subsequently grew, prompting Lotte and Chanel to agree on the reopening, which will initially take place at Lotte’s main branch in central Seoul.

“Customers continued to ask where Chanel was. Chanel also felt the need to reopen in Lotte, so the two sides made a win-win decision,” said Lotte spokesman Park Sang-woo.

Chanel is expected to reopen around late August at the earliest as it needs time to rebuild and decorate its booths.

Chanel and Lotte are currently in discussion over concession size, location and commission fee structure. An average commission fee of 31 to 32 per cent of the sales is likely to be applied to Chanel cosmetics, adhering to what other cosmetics brands pay. In its previous operation, Channel used to pay two per cent less than the average commission fee.


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