Misto Holdings (formerly FILA Holdings Corp.) kept up double-digit growth in its Greater China K-fashion distribution business in the first quarter despite the end of its China license deal with key brand "Mardi Mercredi" late last year.
There were concerns about a sales gap after the core brand that drove the business's early growth in Greater China dropped out, but the combination of growth in existing brands and expansion of the new brand portfolio helped defend results. Misto Holdings plans to significantly expand its distribution brand portfolio in collaboration with companies including Samsung C&T.
According to the securities industry on the 20th, Misto Holdings posted sales of 39.3 billion won in the first quarter from its Greater China K-fashion brand distribution business, up 21.3% from a year earlier. The business involves rolling out promising Korean fashion brands in the online and offline markets of China, Hong Kong and Macau.
Misto Holdings' Greater China K-fashion distribution business took off in 2023 when it took on Mardi Mercredi's China operations. At the time, Misto Holdings signed a license agreement with Piece Piece Studio Co., Ltd., which runs Mardi Mercredi, including production and sales rights in the Chinese market, and began developing the local business. Since its launch in 2018, Mardi Mercredi has used a flower-shaped logo as its brand signature and built recognition among young consumers at home and abroad.
Without relying on outside agencies, Misto Holdings handled direct sales on key Greater China online channels such as Tmall, Xiaohongshu and Douyin. It also directly managed the entire online business process from content production to brand and performance marketing and influencer (wanghong) product sponsorships. Backed by this support, Mardi Mercredi quickly gained a foothold in the local market, with its second-year sales in Greater China surging 190% from a year earlier after the business ramped up.
After helping Mardi Mercredi successfully settle in Greater China, Misto Holdings broadened its portfolio to Marithé François Girbaud and Matin Kim, securing the so-called "three Ma" brands. Misto Holdings has rolled out these brands across major local offline districts and online channels, growing the K-fashion distribution business as a post-FILA growth pillar.
However, in Oct. last year, as Piece Piece Studio Co., Ltd. shifted course to enter China directly, the China license agreement with Mardi Mercredi ended. The industry voiced concerns that, because Mardi Mercredi was the core brand driving the early growth of Misto Holdings' Greater China K-fashion business, a sales gap and slower growth in the region would be unavoidable after the contract ended.
But first-quarter results were seen to dispel much of those concerns. Ryu Eun-ae, an analyst at KB Securities, said, "Although a drop in sales from the new business in Greater China was expected due to Mardi's absence, sales of Marithé and Matin Kim were strong in Hong Kong and Macau, sustaining growth."
Beyond the "three Ma," Misto Holdings has also sequentially established K-fashion brands such as RAIVE and Rest & Recreation in the Chinese market, reducing reliance on individual brands. The company plans to use this year as a turning point to reorganize its Greater China business portfolio and accelerate the buildup of its mid- to long-term growth base. To that end, it aims to increase its Greater China offline stores from around 80 at the end of the first quarter to more than 100 in the first half.
It is also stepping up efforts to secure new brands. Misto Holdings aims to sequentially launch about five brands centered on new categories such as men's high-end contemporary, women's casual and athleisure in the Greater China market by next year. The plan is to broaden categories from the existing women's casual-centered portfolio to menswear and athleisure to reduce dependence on specific brands or genres.
Along with this, Misto Holdings recently signed a distribution agreement with the fashion division of Samsung C&T for a men's high-end contemporary brand. A Misto Holdings official said, "We are preparing Greater China distribution for brands among Samsung C&T-affiliated premium labels that have fandoms at home and abroad," adding, "We plan to start with online this year and expand into offline operations in mainland China and Hong Kong afterward."
Lee Jin-hyup, an analyst at Hanwha Investment & Securities, said, "A large company like Samsung C&T asking to collaborate means even a large company recognizes Misto Holdings' Greater China distribution expertise," adding, "Portfolio expansion is expected going forward, not only for Korean indie brands but also domestic and overseas brands."