SEOUL, Korea, Feb 5 (Korea Bizwire) – The three foreign fashion brands, including Uniqlo, Zara, and H&M, which account for more than 50 percent of the domestic budget-price apparel market, are moving aggressively this year to expand in Korea. According to fashion industry sources on February 4, Japan’s Uniqlo, Zara of Spain, and Swedish clothier Hennes & Mauritz AB, better known as H&M, will introduce sister brands to the market, posing as a formidable existential threat to homegrown brands.
Industry analysts said that these “SPAs,” or specialty retailers of private-label apparel, are expanding rapidly in Korea as the domestic fashion market has made a two-digit growth for the past several years despite the overall slump elsewhere.
Indeed, Uniqlo Co. posted a sales revenue of 694.0 billion won last year in Korea alone, up 37 percent from the previous year’s 504.9 billion won. On the back of the success, the Japanese company will introduce this year its rock-bottom price brand “GU,” whose price range in Japan is between 290 and 1,990 yen (3,000 and 21,000 won).
As for Zara, its parent company Inditex S.A. will open stores for its sister brands such as Massimo Dutti, Bershka, and Stradivarius. Meanwhile, H&M Group will soon introduce the upmarket COS brand–short for Collection of Style–by opening a store in the Lotte World Mall. Other international brands such as Gap, Banana Republic, and Old Navy will also land on the shores of Korea within this year.
To this trend, domestic fashion brands fear losing market shares to the foreign operators. A fashion industry official said, “Already so many home brands had to close their shops due to competition with the foreign SPAs. This year will see more closures unless domestic brands change the way they do business, offering more selections while cutting the fashion change cycle significantly.”