What: South Korea's three largest department store groups saw year-on-year luxury sales growth fall from about 40% in the second quarter to between 10% and 15% in October, with jewellery decelerating most sharply.

Why it is important: The Korean figures show in a major department store market what European and US data already indicated: brand price increases no longer pull demand forward, so luxury growth now has to come from volume, assortment and customer reach.

Growth slowed in two stages across the three groups. Lotte fell to 25% in the third quarter and 15% in October, Shinsegae to 23.3% and 10.2%, and Hyundai Department Store to 25.3% and 11.8%. In jewellery, second-quarter growth of 65.0%, 80.9% and 70.6% respectively shrank to 15.0%, 20.7% and 20.4% in October. The industry attributes the slowdown to fatigue from accumulated price increases and a shrinking wealth effect.

The pattern extends beyond Korea. LVMH's fashion and leather goods organic revenue fell 5% year-on-year in the third quarter and Gucci's revenue 6%, with weak Chinese consumption and slower high-end spending in the United States weighing on results. The average resale price of a Hermès Birkin 25 fell from 2.6 times retail in 2022 to about 1.7 times. Pre-announced price increases no longer prompt buying ahead of them, and Boucheron restored some prices raised in July to their previous level in October.

In September, L'Oréal overtook LVMH as the most valuable company on the Paris stock exchange, at €203 billion against €201 billion, a shift analysts link to the "lipstick effect". Some observers caution that Korean luxury sales remain above last year's level, which points to decelerating growth rather than contraction.

IADS Notes: Pricing fatigue had already surfaced in Europe and the United States before reaching Korean department stores. The Wall Street Journal in August 2026 reported that years of price increases had pushed middle-income shoppers away from Louis Vuitton and Gucci towards Ralph Lauren and Coach, and Bloomberg in October 2026 noted that 2026 price increases were set to be the lowest since 2019, with analysts expecting luxury demand to concentrate among top-tier clients. The earlier surge in Korea also drew on foreign shoppers: The Korea Times in October 2026 reported that Lotte's luxury sales to foreign customers had more than doubled, with Shinsegae and Hyundai also on course to pass ₩1 trillion in foreign sales this year. The shift towards lower-priced categories is visible on department store floors as well, where WWD in September 2026 reported a 20% rise in jewellery sales at Liberty driven by demi-fine and fashion-led brands, and Reuters in April 2026 attributed L'Oréal's sales growth to consumers turning to beauty as an affordable luxury.

In South Korea, department store luxury sales growth falls to the 10% range in October