F&F, known for its fashion brand MLB, has challenged itself to expand its successful myth in the industry into the K-pop sector, but is struggling with results that fall short of expectations. Under the leadership of Chairman Kim Chang-soo, regarded as the 'Midas hand' of the fashion industry, the company is attempting to gain financial support and implement new strategies, but is facing ongoing losses due to difficulties in initial market entry.
According to industry sources on the 16th, F&F Entertainment is collaborating with SBS to air a boy idol survival program called 'Universe League.' The strategy is to draw viewers' interest by shifting away from the existing individual audition format to focus on group competitions.
In January 2023, F&F established a subsidiary, F&F Entertainment, to enter the K-pop industry. The intention is to discover and nurture K-pop stars based on the global success experience of its fashion brands (MLB, Discovery). This move is noted as an unusual example of the fashion industry diving into the entertainment market.
F&F Entertainment's first project is 'Universe Ticket,' co-produced with SBS. It is a survival program that selects a multinational girl group. It aired from November 2023 to January 2024, but failed to attract viewers, recording a 0% rating after its first broadcast. Although the girl group UNIS made its final debut through this project, it has not achieved notable success domestically.
The failure of its first project since its establishment has worsened F&F Entertainment's financial status. The total capital, which was at a negative (-) 5.9 billion won at the end of 2023, has become -8.7 billion won in the first half of the last year. The operating loss reached 5.5 billion won. Although F&F injected 3 billion won through a paid-in capital increase last March, it has proven insufficient.
The problem is that there are also warning signs for the popularity of the follow-up boy group version of Universe League. The TV ratings have consistently hovered around 0% from the first episode to the present, just before the finale. There are evaluations that the program's buzz on the internet has also declined.
From F&F's perspective, major brands such as MLB, Discovery, and Supra, which are being developed by F&F, have stepped up to sponsor, aiming to create synergy between the entertainment and fashion businesses. However, it is disappointing that interest has diminished.
Brands like MLB and Discovery operated by F&F are enjoying explosive popularity in China and Southeast Asia. However, due to sluggishness in the Chinese domestic market, F&F's core fashion business growth has also stagnated. According to the Financial Supervisory Service, F&F recorded consolidated revenues of 450.9 billion won and operating profits of 108.3 billion won for the third quarter of last year, down 8.5% and 27.1%, respectively, compared to the same period last year.
In response, founder Kim Chang-soo directly set his sights on the entertainment and content business for the group's future food sources. Kim has successfully brought overseas licenses for MLB, Discovery, and others to grow them as fashion brands. However, industry evaluations suggest that the entry barriers to the K-pop market seem too high due to the dominant influence of the four major agencies: HYBE, SM, YG, and JYP.
F&F Entertainment believes it is too early to discuss specific financial results. Additionally, following the recent sale of the drama production company Victents, the company plans to focus its content business primarily on music, which allows for continued investment until results materialize.
A representative from F&F noted, "Since UNIS has only been officially debuted for six months, this period is inevitably one where investment is necessary due to the characteristics of the idol industry," adding, "We are steadily drawing an upward curve, and I hope their value will be recognized in the next 2 to 3 years."