Despite the sluggish domestic fashion market due to sluggish domestic demand, brands that achieve 1 trillion won in annual sales for the first time in the SPA (direct operation of planning, production, and distribution) and casual sectors have emerged. In the SPA field, Shin Seong-dae’s Top Ten is expected to achieve 1 trillion won in annual sales for the first time through aggressive offline store expansion. In the native casual sector, LF’s Hedges will exceed the KRW 1 trillion barrier based on good performance in overseas markets such as China, Taiwan, and Russia and expansion of lineups.
According to the fashion industry on the 23rd, sales of Top Ten, which was born in 2012, are expected to surpass KRW 1 trillion this year. Considering the increase in the number of offline stores of Top Ten, whose sales were 970 billion won last year, it is expected to easily exceed 1 trillion won. Japan’s Uniqlo was the only place in the domestic SPA brand market that exceeded KRW 1 trillion in sales, which means that native brands are joining the market. Top Ten saw its sales grow by about 2% in the third quarter of this year. Expectations for the fourth-quarter performance are also rising, with sales of Top Ten’s discount event “Tentenday,” which was held from mid-October to early November, exceeding 100 billion won.
Behind Top Ten’s increasing market dominance is the expansion of brick-and-mortar stores, which generate 90% of total sales. Top Ten has advantages not only in complex shopping malls but also in residential-dense areas, which are highly accessible offline. The number of Top Ten offline stores increased from 664 at the end of last year to 677 this year. Compared to competing brands such as Uniqlo (130 places) and Spao (170 places), the number is overwhelming.
A Top Ten official explained, “Based on big data and artificial intelligence (AI), we are predicting demand and optimizing inventory by reflecting characteristics such as weather and region, which is leading to competitiveness in offline store operation.”
Hedges sales are expected to exceed KRW 1 trillion this year after recording KRW 700 billion in 2020 and KRW 900 billion last year. Kolon Sports has exceeded 1 trillion won in annual sales among local sports brands, but it is the first time among casual brands.
Hedges opened the era of 1 trillion won in annual sales because it has found a breakthrough in overseas markets. An official from Hedges said, “The proportion of domestic and overseas sales was around 5 to 5 last year, but overseas sales are expected to be slightly ahead this year.”
Hedges is showing double-digit growth in overseas markets, especially in China, Taiwan, and Russia. In Russia, the first store was opened in Moscow’s “Avia Park Mall” last year, followed by a second store in the financial center of “Apimall City.” Russia has introduced products that have increased in size in consideration of body type.
China’s sales are expected to grow by about 10% year-on-year this year. Hedges has about 580 stores in China, and plans to open a Shanghai flagship store in January next year. In Vietnam, a product line was formed in consideration of the fact that local customers prefer bright colors. Hedges plans to increase its overseas expansion by opening its first store in India next year.
[Reporter Jeong Seulgi]