Sales of luxury goods at major department stores are turning downward after having enjoyed brisk growth despite the global recession.

At Avenuel, Lotte Department Store's premium brand shop, sales grew 109 percent in February but began slipping thereafter, with growth falling to 52.4 percent in March, 33 percent in April, 20.5 percent in May and 15.7 percent in June. The department store's wider range of luxury brands is also sensing the business boom is close to an end. Their sales growth has fallen continuously since reaching a peak in February with 71 percent. This month, the growth rate was a mere 15.7 percent.

Shinsegae is also suffering. All Shinsegae stores, except for the newly-opened Shinsegae Centum City in Busan, posted average growth of 14.6 percent this month, a sharp drop from 45.4 percent in February.

The main reason behind the sagging sales is a drop in foreign customers. The won, which fell to the W1,600 level in February, is now hovering around W1,200. With the strengthening of the Korean currency, purchases by foreigners at Avenuel plunged to 5.9 percent in June from 32.9 percent in January. Sales of luxury goods to foreign shoppers also dropped to W5.1 billion (US$1=W1,286) in May after hitting W8.6 billion in January and reaching a peak of W9.9 billion in March.

Meanwhile, purchases by Korean shoppers are also showing signs of slowing. Hyundai Department Store, which couldn't enjoy the effects of the weak won due to a smaller number of foreign customers, saw their sales grow by only 20.5 percent this month, the lowest level this year. That's almost half the 36 percent growth recorded in February.

"Many think that people will spend less on luxury goods during a recession, but in fact these are the last items they want to cut down on," said Kim Ran–do, a professor of consumer behavior at Seoul National University. "It seems that the impacts of the recession, which began last September, are finally spilling over into the luxury goods market."