SEOUL, Nov. 22 (Korea Bizwire) — South Korean fashion companies are accelerating their move to trim unprofitable brands amid a prolonged domestic slump, industry sources said Wednesday.
Handsome Corp., the apparel unit of Hyundai Department Store Group, said it is in the process of closing down one of its brands, Mothan.
“It is part of our efforts to improve profitability and to build a stable growth base,” a company official said.
Shinsegae International Inc., the apparel arm of retail giant Shinsegae, meanwhile, is re-examining the launch of a new handbag brand which was originally planned for the second half of this year.
Earlier in August, Shinsegae International also suspended its Banana Republic business, which it had been importing for a decade.
In January, Eland Group, a major South Korean outlet mall operator, sold its brand Teenie Weenie to a Chinese company for some 877 billion won (US$803 million). Eland said it will continue to sell other brands to reduce the company’s debt ratio and improve its financial circumstances.
The size of the domestic fashion market is predicted to reach 39.3 trillion won in 2017, up from an estimated 38.3 trillion won last year, according to a report by the Samsung Fashion Institute.
This would mark the fourth consecutive year of single-digit growth for the fashion industry, causing many industry watchers to view it as an effective slowdown. The market expanded 11.8 percent on-year in 2011.