Winter Arrives Early, Padded Jackets 'Fly Off the Shelves'... What's at Stake for Fashion Companies in Q4?

Samsung C&T and Handsome Grow Sales and Operating Profit Despite Third-Quarter Off-Season
October Temperatures Plunge 10 Degrees in Four Days as Early Demand for Lightweight Padded Jackets Grows
Warmer-than-Average Weather Possible in November and December; Winter Clothing Sales and Inventory Management Are Key

Yonhap News Agency

As purchases of lightweight padded jackets have risen since summer and the autumn chill arrived early, competition to promote winter outerwear is heating up, prompting fashion companies to step up efforts to capture year-end peak-season demand. Major fashion companies increased both sales and operating profit in the third quarter, typically a seasonal off-season, drawing attention to their fourth-quarter results, when sales of high-priced winter clothing are concentrated. However, with temperatures in November and December potentially higher than average, sales and inventory management in response to changing weather is expected to determine profitability.

According to the fashion industry on November 9, Samsung C&T Fashion Group and Handsome Corporation both achieved growth and improved profitability in the third quarter of this year. The third quarter is typically a seasonal off-season, after summer clothing sales have wound down and before demand for new fall and winter products picks up in earnest. This year, however, strong sales of signature products from major brands and transitional-season clothing boosted results.

Samsung C&T and Handsome Improve Third-Quarter Results Despite Seasonal Slump

Samsung C&T Fashion Group posted third-quarter sales of KRW 498 billion, up 11.9% from the same period a year earlier. Operating profit rose 66.7% to KRW 20 billion. Its operating margin also increased to 4.0% this year from 2.7% last year. Cumulative sales and operating profit for the first three quarters of this year were KRW 1.664 trillion and KRW 112 billion, respectively.

Handsome Corporation, a fashion company affiliated with Hyundai Department Store Group, also posted third-quarter sales of KRW 324.8 billion and operating profit of KRW 7.574 billion. These figures were up 4.9% and 206.1%, respectively, from the same period a year earlier. Strong sales of transitional-season clothing, growth in key domestic brands, and increased sales of newly imported brands supported the improvement in results. Sales from January through August this year of the 12 overseas brands, including Our Legacy and Kith, introduced in Korea by Handsome were up 50% from the same period a year earlier.

The Salomon Cross Insulation Jacket. Screenshot from Salomon's website.

A key variable for the fashion industry is sharp temperature fluctuations. According to the Korea Meteorological Administration, the nationwide average temperature last October was 15.8 degrees Celsius, 1.5 degrees higher than average and the fifth-warmest on record. The daytime high in Seoul reached 30.1 degrees Celsius on October 12, setting a new October high-temperature record. However, cold air moved in during the latter part of the month, and the nationwide daily average temperature fell 10 degrees in just four days, from 19.8 degrees on October 18 to 9.8 degrees on October 22.

Padded Jacket Sales Surge Despite Late Heat as Sharp Temperature Swings Boost Demand for Winter Clothing

Notably, sales of winter clothing rose even before the cold weather set in in earnest. According to KREAM, a fashion trading platform, transaction volume for padded jackets and windbreakers in September rose 117% from the previous month, while transaction value increased 135%. Transactions of padded vests surged 335%, while those of lightweight padded jackets and short padded jackets rose 193% and 179%, respectively. At MUSINSA, transaction value for lightweight padded jackets in August was up 718% from the same period a year earlier. This indicates that consumers were buying winter clothing in advance despite the late-season heat.

Lightweight padded jackets are especially versatile: they can be worn on their own in fall or layered under outerwear in winter. As more consumers seek to adjust their outfits to changing temperatures, they appear to be buying a variety of outerwear in addition to thick padded jackets.

Fashion Companies Bring Winter Peak Season Forward; Inventory Management Is Key

Fashion companies are moving up the timing of promotions for winter products. SSF SHOP, Samsung C&T Fashion Group's online mall, started its Black Friday event, running from November 4 to 16 this month, six days earlier than last year and extended it by two days. It also launched a new "Outerwear Battle" promotion, featuring lightweight padded jackets, cashmere and wool coats, and fur jackets. Winter products from major brands, including Beanpole, Theory, and Canada Goose, are being offered with discounts.

The key factor is the weather ahead. According to the Korea Meteorological Administration's three-month outlook, the probability that the nationwide average temperature will be higher than average is 60% in November and 50% in December. A brief cold spell could spur outerwear purchases, but if mild weather persists, sales of cold-weather clothing such as thick padded jackets may fall short of expectations.

The early emergence of demand for winter clothing is another variable. If consumers have already bought clothing they would otherwise have purchased in November and December, the early increase in sales may not lead to higher overall fourth-quarter sales. On the other hand, if demand expands from lightweight padded jackets to midweight and heavy down jackets as the cold weather sets in, companies could see additional sales.

Discount rates and inventory management are important for profitability. Winter outerwear has a high average selling price, which can help boost sales, but price reductions from heavy discounting and increased promotional expenses may limit the impact on profit. If inventory builds up because of a warm winter, the burden of discounting toward the end of the season will also grow.

A fashion industry official said, "In today's fashion market, it is becoming increasingly important not only to supply products quickly in response to weather changes but also to gauge consumer reactions in real time and adjust sales strategies accordingly." The official added, "With consumer spending increasingly polarized, companies are expected to offer both competitive prices and brand differentiation. Each company's product planning and distribution capabilities will be a factor widening the gap in performance."

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