Style Nanda, which develops the domestic color cosmetics brand '3CE' that the French L'Oréal Group acquired for about 600 billion won in 2018, has implemented voluntary retirement. Some in the industry analyze that L'Oréal may withdraw from the domestic business sector of the 3CE brand due to years of poor performance.
According to the distribution industry on the 20th, Style Nanda conducted voluntary retirement for 3CE brand-related personnel at the end of last year. Following the withdrawal from the clothing institutional sector last year, Style Nanda is showing signs of scaling back its cosmetics business this year.
3CE had been operating a membership program at flagship stores located in major commercial districts like Hongdae and Myeongdong, but it ended this program last November. The company stated that this was a "strategic adjustment due to market changes"; however, the distribution industry widely interprets it as a step toward effectively withdrawing from the domestic market. In fact, after officially withdrawing from its online mall, 3CE is currently operating only its own channel on Naver Smart Store. The number of offline stores nationwide has also reduced to seven, including direct-operated and duty-free stores.
3CE, which once emerged as the representative of 'K color' by crossing between online and offline, has been evaluated to have diminished its presence in recent years. After L'Oréal acquired 3CE, Style Nanda recorded a peak sales of 269.5 billion won and an operating profit of 61.8 billion won in 2019. However, since then, performance has been on a decline. Style Nanda's recent performance includes ▲2020 sales of 256.3 billion won and operating profit of 44.3 billion won ▲2021 sales of 227.3 billion won and operating profit of 32.6 billion won ▲2022 sales of 218.5 billion won and operating profit of 32.7 billion won. However, last year, sales rebounded slightly to 224.9 billion won with an operating profit of 39.6 billion won.
L'Oréal attempted to target the global MZ generation through 3CE in the early stages of the acquisition. However, due to the impact of the COVID-19 pandemic and stagnation in the color cosmetics market, as well as the rapid growth of K-beauty indie brands, it lost competitiveness. Consequently, restructuring efforts, such as scaling back operations in China and liquidating the Japanese corporation, were also implemented.
An industry official noted, "The recommendations for resignation, withdrawal from the online mall, reduction of stores, and termination of the membership program are not merely a simple rebranding effort," adding, "Given that internal restructuring is being conducted, it seems that scenarios for withdrawal from the domestic market at the headquarters level are being reviewed."
In response, a representative of L'Oréal stated, "3CE regularly reviews its brand strategy according to the evolving market ecosystem and changing consumer needs," and added, "Last year, the direction of the business was adjusted to complement the makeup business with fashion. We plan to integrate logistics centers to expand into overseas markets and provide better services to consumers in Korea and abroad." He concluded, "There are no plans to withdraw from the domestic business at all."