Missile dispute decimates AmorePacific profit
AmorePacific profit and sales have been decimated as the Korean giant skincare retailer got caught up in the Chinese THAAD missile dispute.
The parent of retail brands including Innisfree, Sulwhasoo and Etude House, said sales fell 17.8 per cent to US$1.26 billion in the second quarter, and profit by 57.9 per cent to $116 million.
The company has been caught out in the diplomatic dispute between China and North Korea over the latter country’s decision to allow US THAAD missile defence systems on its territory. China banned tourists from visiting South Korea for a time leading to a drastic fall in sales in stores in AmorePacific’s home market.
Chinese citizens account for as much as 70 per cent of sales in duty-free stores in Korea.
While Southeast Asian sales increased, that was negated by stagnant growth in China and Hong Kong.
In light of the decline, the company said it would release competing products in the domestic market and seek new markets to reduce its dependence on China.