Gucci and Chanel will pull out of Shilla's duty-free shops at Incheon International Airport. The two are the luxury brands with the highest leather goods and accessories sales there.
Gucci has already closed down two outlets in Shilla shops and moved to Shilla's archrival Lotte. Chanel also refused to renew its contract with Shilla, which was scheduled for the end of August, and plans to withdraw in mid-September. The decision came after Hotel Shilla, which manages duty-free shops, offered Louis Vuitton a preferential minimum rent to open its first airport boutique in the world at Incheon.
Gucci has been posting the highest sales in fashion and accessories for two years in a row. Chanel records higher sales than Louis Vuitton in department stores in Seoul's affluent Gangnam area. Some were skeptical whether Chanel would make a success of duty-free sales as most of its products cost over US$3,000, the maximum duty-free allowance for Koreans.
But according to a survey of duty-free sales at Incheon in July and August by Airstar Avenue, Chanel was the most popular brand after Prada at Shilla and ranked first at the duty-free shop run by the Korea Tourism Organization.
Having lost the two bestselling brands in the airport, Shilla is hoping that sales from Louis Vuitton will compensate. That is why the opening date of the Louis Vuitton boutique was rescheduled for Saturday, 10 days earlier than planned, in time for the Chuseok holidays.