GS Retail to exit beauty market, closing all Lalavla stores

CJ Olive Young looks set to solidify its front-runner position in the health and beauty store market, with GS Retail’s announcement that it will shut all of its Lalavla stores.

Lalavla, GS Retail’s health and beauty store brand, will shut down all of its branches by the end of November.

The brand’s online shopping mall will only take orders until Sept. 1 and will take customer inquiries about refunds or exchanges until Sept. 30.

In 2005, GS Retail formed Watsons Korea — a joint venture with A.S. Watson, a Hong Kong-based health and beauty product retailer — to operate Watsons stores. It acquired the remaining 50 percent stake A.S. Watson held in the joint venture in 2017, becoming the sole owner and changing the health and beauty store’s name to Lalavla.

Lalavla had as many as 200 branches in 2018, but the number quickly decreased to 34 branches this year as cosmetics sales decreased during the pandemic.

The brand’s sales fell 37.5 percent on year to 25.1 billion won ($19.2 million) in the second quarter of 2020. Operating loss was 4.8 billion won, compared to a loss of 4.2 billion won the previous year. GS Retail hasn’t been providing sales figures for the brand since the third quarter that year, only reports the combined sales of Lalavla, its e-commerce division and subsidiaries.

Once GS Retail shuts down all its Lalavla branches, the company said it will focus more on its convenience store and delivery business. It has been offering deliveries from its GS Fresh Mall branches to customers in Seoul, Gangwon and Chungcheong, since May.

CJ Olive Young is expected to become the clear leader in the local health and beauty store market. The company has 59.1 percent of the market as of the first quarter, with 1,265 branches.

Lotte Shopping decided to shut down all its individual LOHBs branches, the company’s health and beauty store brand, in November last year. It now only designates a small section at its Lotte Mart branches for cosmetics and health supplies, called LOHBs+.