Young fashion brands are turning into cash cows amid an economic slump and consumption polarization. (Image courtesy of Shinsegae Department Store)
SEOUL, Nov. 21 (Korea Bizwire) – After becoming nuisances at department stores due to the growth of online shopping, young fashion brands are turning into cash cows amid an economic slump and consumption polarization.
Young fashion brands, which cater to the consumption trend of the MZ generation with high cost efficiency and trendy design, are enjoying robust sales growth even as department stores struggle to stay profitable.
According to industry sources on Sunday, the nation’s top three department stores, namely Lotte Department Store, Shinsegae Department Store, and Hyundai Department Store, registered double-digit growth in sales of young fashion brands this year.
Although major department stores are in a slump due to sluggish consumption resulting from high interest rates and high inflation, they are registering improvement in the young fashion segment.
In particular, it’s a positive signal given that young fashion sales marked single-digit growth or negative growth in the pre-COVID-19 year of 2019.
For Lotte Department Store, young fashion sales growth climbed to 10 percent this year after standing at around 5 percent in 2019. The share of young fashion sales in the fashion category also rose to about 25 percent.
For Shinsegae Department Store, young fashion sales took an upturn to 10.4 percent this year after dropping by 5.9 percent in 2019. The growth of young fashion brands at its Centum City and Gangnam outlets reached 27.3 percent and 63.2 percent, respectively, in the third quarter of this year, thanks to the influence of new brands.
Hyundai Department Store’s young fashion sales growth jumped to 25.1 percent this year from a decline of 1.3 percent in 2019.
For offline department stores, young fashion brands were neglected until five years ago. As the MZ generation, the main customer base of young fashion brands, rushed to online sellers, department stores’ young fashion brands lost ground.
However, the situation changed during the COVID-19 pandemic period. The MZ generation, which is sensitive to trends, emerged as the main consumer base, and luxury consumption lost its shine due to an economic slump, paving the way for the revival of young fashion brands that offer trendy items at affordable prices.
Ashley Song (ashley@koreabizwire.com)
