Boom in the West: Amorepacific 2022 revenues soar in N. America and Europe but Asia slumps
The North American market reported the biggest growth in sales in the brand’s 2022 fiscal year, clocking in at KRW181.4bn (USD148m).
This was credited to Amorepacific’s efforts to increase the presence of its major brands by expanding its distribution channels with partners including Sephora and Amazon and strengthening its marketing activities in the region.
According to the firm, North America’s revenue in the fourth quarter (Q4) grew by 99% driven by Laneige and the incorporation of newly acquired luxury clean beauty brand Tata Harper sales from November 2022 onwards.
In Europe, sales grew by 37% to KRW30.1bn (USD25m) driven by Laniege and its strong performance in multi-brand stores and online. Laneige’s Q4 performance helped it grow by 69%.
The company also benefitted from the brand renewal of Goutal, the French perfume label it acquired in 2011.
The company said that in Q4, Goutal had strong growth in France and in the export business.
Amorepacific has been turning its gaze westward for some time now, especially towards America, as prospects in China continued to dampen.
China pulls down Asia growth
On the other hand, Asia recorded a decline of 24% to KRW1.28bn (USD1.04m). The slump was attributed to the poor performance in China, which accounts for a whopping 60% of its Asia sales.
China’s zero-COVID policies ultimately caused revenues to decline by mid-30%, said Amorepacific.
The blow it suffered in China could not be mitigated for the “solid growth” in the ASEAN region, with major brands like Sulwhasoo, Laneige, and Innisfree posting strong growth.
Japan also benefitted from the expansion into new retail channels with partners such as @cosme.
The stellar performances in North America, Europe and ASEAN could not offset the poor performance of China.
Overall, operating profits of its overseas business decreased by 84% to KRW8.1bn (USD6.6m)
Trouble at home
Domestically, its beauty brands did not fare much better.
Its luxury beauty division, with brands like Sulwhasoo and Hera, fell by 14% to KRW1.4bn (USD1.18m).
The premium beauty portfolio, which consists of brands like Laneige and IOPE reported a decline of 27% to KRW582bn (USD474m).
The daily beauty division, which consists of its personal care brands, Mise-en-scène, LABO-H, and Illiyoon, also fell by 12% to KRW425bn (USD346m) despite more than 30% growth in the multi-brand retail channel.
The company attributed the decline to the weaken travel retail channel.
Amorepacific’s luxury brands account for 56% of total domestic revenue while the premium brand portfolio accounts for 23%. Daily beauty accounts for 16%.
Overall, Amorepacific revenue declined by 15% to KRW4.1tn (USD3.3bn) while operating profit decreased by 3.6% to KRW214.2bn (USD174m).