Sales Decline in New Semester Products Due to COVID-19 School Opening Delay

[Asia Economy Reporter Jo Yoo-jin] As the start of the new semester for kindergartens, elementary, middle, and high schools nationwide has been delayed to prevent the spread of the novel coronavirus infection (COVID-19), the fashion industry has lost even the special demand of the new semester season. Every year, the new semester season accounts for 20-30% of annual sales, but due to the delay in school openings caused by the COVID-19 impact, demand has collapsed, and related companies are experiencing difficulties with declining sales.

According to the industry on the 23rd, LF reported that sales of major new semester items in February and March this year (as of the 16th) decreased by about 30% compared to the same period last year. The products with a sharp drop in sales were concentrated in new semester gift categories such as backpacks, wallets, and belts.

During the same period, sales of new semester bag-related items (backpacks, shoe bags, briefcases, etc.) on the open market auction also showed some negative growth. Briefcases, which showed a 75% sales growth last year, saw sales decrease by about 7%, and shoe bags dropped by 11%. Backpacks also saw a significant decline in sales growth rate from 77% last year to 18%.

Offline stores experienced an even larger decrease in sales. According to Shinsegae Department Store, total sales in the children's category, including accessories such as children's bags and shoe bags as well as clothing, plummeted by 38.8% during this period. Shinsegae Department Store holds new semester events before school starts every January and February, but this year, consumer behavior avoiding outings due to COVID-19 from January led to a significant contraction in related sales.

The sharp decline in sales of new semester product categories is due to the delay in school openings caused by COVID-19. As a preventive measure to stop the spread of COVID-19 infection, the government postponed the new semester opening and daycare center opening nationwide to April 6, causing related demand to fail to recover. Initially, the government announced a one-week delay last month, then on the 12th of this month, announced an additional two-week postponement, with rumors of a fourth delay emerging.

February and March are special seasons when demand surges for purchasing bags such as backpacks, shoe bags, and laptop bags in preparation for admissions, school openings, and semester starts. During this period, accessory product sales account for 20-30% of annual sales for each fashion company, driving overall sales. However, as the atmosphere of practicing social distancing spreads due to COVID-19, gift demand has significantly weakened, and direct demand has collapsed due to the delay in school openings.

An LF official said, "February and March, which include graduation ceremonies and Valentine's Day, are special seasons with concentrated direct demand, but this year we are not fully enjoying such a special season," adding, "We are focusing on overcoming sluggish sales by introducing new events such as giving away mask storage pouches in line with changes in consumer behavior due to COVID-19."