Louis Vuitton to pull out of Lotte duty free shop in COEX

Louis Vuitton has decided to close a store at Lotte Duty Free Shop in COEX, citing recent slowing sales there.

According to industry sources on Tuesday, the French brand will not renew its contract with Lotte, set to expire in December, and will withdraw the store.

“We have informed Lotte about the withdrawal because of poor sales,” a Louis Vuitton official said in an interview. 

Lotte declined to confirm the decision, saying, “Discussions are still underway.”

In 2008, Louis Vuitton opened the store within the then AK Duty Free Shop, which was acquired later by Lotte. Despite its strong performance in the early years, however, the sales have declined recently due to the decrease in visitors to the city air terminal in southern Seoul.

Of the total eight Louis Vuitton stores located within duty free shops here, the COEX store is currently ranked the lowest in sales. The French label was also said to have informed its withdrawal of a store from Donghwa Duty Free Shop in Gwanghwamun, central Seoul.

Industry sources said, however, the withdrawal could be the latest indication of ongoing feud between Lotte and its rival Shilla Duty Free.

Lotte and Shilla had competed since 2007 to open a Louis Vuitton store at Incheon International Airport by ensuring an exclusive contract with the brand.

But in November last year, Shilla won the contract under Lee Boo-jin, the newly minted CEO of Hotel Shilla who is also the daughter of Samsung Electronics Chairman Lee Kun-hee.

During the negotiations, Shilla also won approval from the airport to remove about 140 seats and a 55-square-meter bookshop for the French label to open a store at the center of the passenger terminal in a space as large as 595 square meters.

The alleged preferential treatment toward Shilla prompted Lotte to file a lawsuit against the airport. However, the court dismissed the suit in April, paving the way for the opening of Louis Vuitton’s first airport store, which is planned in September.

And the disputes seem to continue for some time.

In protest against Shilla’s alleged favorable treatment of Louis Vuitton, Italian fashion brand Gucci closed in June both of its outlets from Shilla Duty Free in the Incheon airport to move to Lotte Duty Free and Chanel also started online sales of cosmetics only with Lotte Duty Free.

By Lee Ji-yoon (jylee@heraldcorp.com)