[THE INVESTOR] AmorePacific has been thriving in Korea and China, ranking as the 14th biggest cosmetics company in the world (WWD Beauty, 2015) by revenue. In Europe, however, the K-beauty giant has been barely making its mark.

Its European operations posted 10.1 billion (US$8.77 million) net loss last year, according to its regulatory filing released on July 11, for two years in a row. Its revenue dropped 22.9 percent on-year to 49.2 billion won.

AmorePacific has pulled the plug on its skincare business in France where its Soon and Lirikos lines failed to gain any market share since their launch in 1990. 

After a failure that cost 5 billion won, AmorePacific changed its tactics and joined the fragrance business. Its Lolita Lempicka launched in 1997 was a hit and it took over French perfumery Annick Goutal in 2011. Despite their presence at major boutiques in over 40 European countries, Annick Goutal has not been able to turn to black.

The European market for cosmetics has long been suffering from stalled growth. Companies willing to enter despite the market condition would have to invest time and money for a lengthy and demanding certification process.
This, however, will not stop AmorePacific Group chairman Suh Kyung-bae from trying again. He is planning to reenter the European market with premium skincare line Sulwhasoo, which has topped domestic sales over the last decade. “Based on the success in Asia, (AmorePacific Group) will enter Middle East and into Europe and Central and South America, in phases,” said an executive.

By Hwang You-mee (glamazon@heraldcorp.com)