Is Amore Ending Its 4-Year Struggle as It Embarks on a Generational Shift?

Early 50s HR Head Promoted
Major Organizational Restructuring Implemented

[Asia Economy Reporter Yoojin Cho] Amorepacific Group Chairman Seo Kyung-bae is drawing attention as he embarks on a full-scale generational change. He promoted a 50-year-old executive director, known as the group's personnel expert, to vice president and appointed him as CEO, while implementing a major organizational restructuring with the task of independent growth for each brand. Intense restructuring is also expected. Amid the long-term impact of China's THAAD retaliation and the COVID-19 pandemic, Amorepacific, which had been struggling as a perennial second place behind LG Household & Health Care, is now attracting attention to see if this appointment will mark an opportunity for growth after a long period of wandering.

On the 13th, Amorepacific Group announced its regular executive appointments for next year, appointing Kim Seung-hwan, Group Head of Human Resources and Organization and Head of Amorepacific HR Unit, as Vice President and CEO of the holding company Amorepacific Group. This is a dramatic personnel change, 14 years younger than the previous CEO, and the heads of major brands such as Sulwhasoo and Laneige were also replaced with a large number of 'young blood.'

Lim Joong-sik, CEO of Espoir (Managing Director), was appointed as the brand unit head leading Sulwhasoo; Hwang Young-min, Head of Strategy Innovation Unit (Managing Director) at the China Regional Headquarters (RHQ), was appointed as Deputy General Manager of the China RHQ responsible for the China business; and Jung Hye-jin, Executive Director and former Head of Amorepacific Premium Brand Unit, was appointed as the Laneige brand unit head. In addition, Cabin Wang, E-commerce Division Head of Amorepacific China RHQ Strategy Innovation Unit, was promoted to Deputy Managing Director, and Park Young-ho, Head of Amorepacific Research & Development (R&D) Unit (Technical Research Institute Director), was promoted from Managing Director to Executive Director.

This surprise appointment is aimed at overcoming long-standing poor performance. Since the new CEO is a personnel expert, it is widely believed that high-intensity restructuring will follow. An industry insider said, "The group has announced changes to improve the management structure of domestic and overseas subsidiaries and affiliates through this appointment," adding, "There will be large-scale restructuring next year aimed at growth opportunities, including integrating marketing and sales within brand organizations and establishing new organizations to enhance production competitiveness."

The group decided to introduce differentiated organizational structures and operational methods for each brand to achieve independent growth tailored to each brand's characteristics. An Amorepacific Group official explained, "Through this organizational restructuring, we plan to make every effort to overcome today's crisis and lay the foundation for a new leap forward."

Amorepacific Group has continued a sluggish trend for four consecutive years as growth in its two pillars, China and duty-free sales, has faltered. With the collapse of major sales channels such as duty-free shops and department stores, which are key for luxury cosmetic brands including Sulwhasoo, operating profit (848.1 billion KRW) has been halved compared to the peak in 2016 (427.8 billion KRW as of last year). In the third quarter of this year, both sales and operating profit plunged 23% and 49%, respectively, compared to the same period last year.

An industry insider said, "'K-Beauty's comeback' and 'channel reorganization shifting to online strategies' are key cards to overcome growth limitations, so it is expected that the group will focus its capabilities on reshaping the landscape next year through this innovative personnel appointment."

This content was produced with the assistance of AI translation services.