Missha, South Korea’s first successful budget cosmetics brand, has announced plans to downsize domestic operations and instead head to Europe.

“The budget cosmetics market in Korea is overly competitive, and has hit the ceiling. We are going to open several stores in three European countries including Germany,” said Kim Hong-tae, PR official at Able C&C, the mother company of Missha, to The Korea Herald on Thursday.

The first store in Germany will open in the city of Ingolstadt in early February, with steady and bestsellers including BB creams, sunscreen and others to be sold at around 10 euros. The other countries are yet to be unveiled.

Germany will be the latest market for Missha which runs more than 1,000 stores in 27 countries including Korea, Japan, Turkey and others.

Going global is seen as a desperate attempt by Missha, which has lost a considerable domestic market share over the past couple of years.

Able C&C posted a 2.3 billion won deficit in the second quarter of 2014. Missha fell to the No. 3 position behind The Face Shop and Innisfree in 2014, for the first time since the brand launched in 2000 and maintained the top two slots.

As part of the restructuring efforts, the company has recently decided to ditch its memorandum of understanding with Seoul Metro to open 48 stores inside train stations. Moreover, it has decided to shut down 29 shops in the Metro line 5-8 stations. In addition, stores at some of the most lucrative spots including Myeong-dong in central and the trendy Garosugil in southern Seoul have also closed in the past six months. News reports of the company’s Hong Kong business partners’ decision to close stores in Hong Kong has also been painful.

“It is true that many of the stores have shown less than impressive sales record over the past couple of years. The rent is increasing higher than ever ― the deposit for the Myeong-dong store is 3 billion won ― and sales aren’t that good. At this stage we are trying to set a new direction for our businesses,” Kim said.

By Bae Ji-sook (baejisook@heraldcorp.com)