Despite Reduced Clothing Shopping, Six Major Fashion Companies Rebound Together—Why?

All Six Major Fashion Companies See Sales Growth
Shinsegae International's Imported Fashion Sales Jump 31.8%
Clear Shift Toward 'Selective Consumption' Driven by Department Stores and Premium Brands

Amid a contraction in domestic fashion consumption, major fashion companies in Korea all achieved top-line growth in the second quarter of this year. This is interpreted as a result of the spread of "selective consumption," where consumers are reducing overall clothing purchases but are still willing to spend on their preferred brands. In particular, robust sales of imported and premium brands, especially through key distribution channels such as department stores, have offset sluggish domestic demand.

According to the fashion industry on August 20, all six leading fashion companies—Samsung C&T Fashion Division, Handsome, Shinsegae International, Kolon FnC, LF, and F&F—reported year-on-year sales growth in the second quarter. Samsung C&T’s Fashion Division saw a 16.3% increase, followed by Shinsegae International (15.1%), Handsome (7.4%), F&F (5.5%), Kolon FnC (4.9%), and LF (2.0%), all posting growth.

This performance stands in stark contrast to overall consumption trends. According to the Ministry of Trade, Industry and Energy, domestic fashion purchases during this year’s spring season (March to May) totaled 24.8 trillion won, a 7.7% decrease compared to the same period last year. Consumption declined across most categories, including menswear, womenswear, casual wear, and outdoor apparel.

The outlook for summer is also challenging. The Fashion Consumption Outlook Index (FCOI) for June to August stood at 99.5, below the baseline of 100. Decreases in spending are expected across major product categories: apparel (99.7), footwear (99.5), and bags and wallets (99.1). Analysts attribute this subdued sentiment to rising prices overall and mounting concerns over the cost of fashion products, which are weighing on consumer confidence.

Industry observers interpret the rebound in major fashion companies’ sales as evidence that consumption is shifting toward brands with strong competitiveness. This trend is most pronounced among imported brands. While Shinsegae International’s total sales rose by 15.1% in the second quarter, its imported fashion sales jumped by 31.8%—more than double the overall sales growth rate.

Samsung C&T Fashion Division also posted higher sales for international brands such as Ami, Lemaire, and Issey Miyake, alongside its in-house brands like Beanpole and 8Seconds. Handsome credited its strong results to consistent growth in existing brands like Time and System and robust performances by newly launched imported brands.

However, some analysts caution that the strength of imported brands should not be simply seen as a surge in luxury consumption. The concentration of consumer interest in certain brands is evident across a wide price and product range—from premium brands like Ami and Lemaire, to contemporary brands like Our Legacy, and various footwear brands such as Keen and OOFOS. One industry insider explained, "Brands with established recognition, dedicated fandoms, or differentiated design and functionality continue to enjoy popularity. Instead of buying multiple products, consumers are increasingly choosing to purchase one or two items exclusively from their favorite brands, which is driving strong performance for these labels."

There is also a clear pattern of concentrated spending across distribution channels. Handsome’s offline sales in the second quarter rose 8.7%, while online sales grew by only 2.3%. Consequently, the share of offline sales increased from 77.8% to 78.8%. Shinsegae International also cited expanded foreign customer bases and increased premium consumption as growth drivers. As demand concentrates in department stores and core commercial districts, brands with higher average transaction values and loyal customers have performed particularly well.

Alongside top-line growth, profitability also improved. Samsung C&T Fashion Division’s operating profit came in at 54 billion won, up 63.6% year-on-year. Handsome recorded operating profit of 4.6 billion won, a 525.0% increase, attributable in part to a low base last year. Kolon FnC more than doubled its operating profit to 15.8 billion won.

The real challenge lies in the second half of the year. While some of the strong first-half results reflect a base effect from last year’s weak performance, there are no clear signals yet of a consumption recovery. Furthermore, fashion companies now face increasing cost pressures for materials such as fabrics due to the weak Korean won and geopolitical risks. With it proving difficult to fully pass higher costs on to consumers through higher retail prices, companies must contend with both slower demand and rising expenses.

Another industry source stressed, "It's not that consumers are starting to buy more clothes, but rather that they are becoming more selective about which brands they are willing to spend on. The more the market contracts, the clearer it becomes that demand is concentrating with companies offering well-known brands, differentiated products, and loyal customer bases."

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