Chanel cosmetics will lose its dedicated space in the Lotte Department Store, Korea's largest department store chain. A spokesman for retailer on Monday said the French cosmetics brand would shut its business in seven branches of Lotte on Jan. 29.

The luxury brand opened its business in Lotte in 1992 and sustained top sales against all competitors until 2002, when sales dropped as the focus of consumers shifted away from color makeup toward functional products including wrinkle reduction and whitening. Chanel slid to eighth in sales at Lotte in 2005.

Although it rose again to fifth last year, it earned less than half of best-selling brand Sulwhasoo. "Chanel has the best spot in the store and its booth amounts to 1.5 times of the space of other brands," the spokesman said. "The problems is that it is too arrogant as the world's best and has failed to catch up with the changing trend among Korean consumers." Korea's biggest retailer said Chanel's bag and clothing lines will remain at the emporium.

Chanel claims it was a new agreement with a rival retailer that prompted the spat with Lotte and the drop in sales is a mere pretext.