The company saw an operating loss of KRW 2.1bn for the second quarter of this year
South Korea’s Able C&C, best known for its Missha brand of cosmetics posted South Korean Won (KRW) 103bn in sales along with an operating loss of KRW 2.1bn for the second quarter of this year.
As it also recorded a net loss of KRW 200m, its operating profit and net income both turned to a deficit. It is the first time since 2007 that the Able C&C has seen a quarterly loss.
The company said the slowdown in sales growth was due to increased competition and rising advertising and promotion costs. These increased rapidly during the quarter as the company faced intensifying competition from other makers as consumers cut back on spending amid economic worries.
“For consumer spending to grow, there should be some kind of confidence that the country’s economy will improve, but there’s no such confidence in Korea,” said Ye Jong-suk, a professor from Hanyang University.
According to Nielsen Global, Korea ranked among the lowest in terms of consumer confidence index in the second quarter of this year. The index for Korea was 51, lower than the average for Asia (105), the US (96), and Europe (71).