“There is no longer a middle.”
A representative of a clothing company, Mr. A, who recently operated a winter product pop-up store at a department store in Seoul, noted that the sales from the pop-up store were lower than expected. He said, “Our brand is in the mid-range price bracket in the market, but we barely achieved the lowest level of our sales target,” adding, “A department store merchandise planner said our brand is relatively performing well. Due to severe polarization, only very cheap or expensive items are selling, making it difficult for mid-range brands to survive.”
According to the fashion industry on the 13th, due to the polarization of consumer markets, the clothing market is now dominated by high-priced imported brands and ultra-low-cost apparel. The industry reports that in October, Shinsegae Department Store's total sales decreased by 3%, while luxury goods remained stable compared to the previous year, and fashion (-7.5%) and accessories (-8%) saw negative growth. Even in November, luxury goods showed a sales growth rate of 7%, but fashion and accessories experienced a decrease in sales.
In contrast, fashion brands that emphasize value for money, such as manufactured and distributed (SPA) brands, are thriving. FRL Korea, which operates Uniqlo in Korea, saw its sales for the fiscal year 2024 (Sept. 1, 2023 – Aug. 31, 2024) reach 1.06 trillion won, a 15% increase compared to the previous year. During the same period, operating profit increased by 5.4% to 148.9 billion won. The Japanese brand Uniqlo nearly reached 1.4 trillion won in sales in the fiscal year 2019, but faced a boycott after Japan imposed export restrictions on semiconductors, causing its sales to shrink by more than half the following year. However, as demand for affordable products grew amid economic downturns, it recovered to 1 trillion won in sales.
Shinsegae International's SPA brand TopTen is also expected to achieve sales of 1 trillion won this year. TopTen's sales were around 280 billion won in 2019, but it saw rapid growth while Uniqlo struggled due to the boycott, competing for the top two positions in the industry. E-Land World’s SPA brand Spao is also estimated to have sales of around 600 billion won this year, a 25% increase from the previous year.
The uniform-priced household goods store Daiso's 5,000 won clothing is also gaining popularity. This winter, Daiso introduced over 80 clothing items, including the ‘EasyWarm’ heating underwear series, padded vests, fleece jackets, and homewear. A Daiso representative stated, “We introduced items like sweatshirts and hoodies with EasyWear for the first time this year, and sales of EasyWear increased by 557% from the previous year in October and November.”
According to the ‘Big Data Trend 2024’ annual report released by market research firm Trend Research, the scale of the domestic fashion market last year increased by 2.8% compared to the previous year, reaching 48.4167 trillion won. By sector, the casual market where SPA brands belong saw the highest growth rate at 6%, while higher-priced women's and men's suits saw growth rates of 3.6% and -2.6%, respectively.
Given the circumstances, the fashion industry is considering suspending operations for brands with poor performance. Kolon Industries FnC division ended operations for Lucky Marche in May and has since suspended operations for its private brands (PB), men's wear Freeker, and women's wear LeMentory in the second half of the year. LF has ended its Random Golf Club and Tipi Cozy businesses, while Samsung C&T's fashion division withdrew the Maison Kitsuné golf line in the first half of this year. The golf apparel ‘Tolbiist’ from the Global Sae-A Group's subsidiary S&A will also cease operations after this fall/winter season, ending a seven-year run.
In some sectors of the industry, there is an analysis that the economic downturn has led consumers to buy the cheapest essentials while investing in unique items, fueling brand polarization. ‘Ambisumer,’ a neologism, combines ‘ambivalent’ and ‘consumer’ to signify this duality.