"Buying Inventory" Shinsegae Factory Store Leads Industry Win-Win Efforts

Off-Price Store 'Factory Store' Takes Initiative for Win-Win in Challenging Domestic Fashion Industry
Purchases 1 Billion KRW Worth of Inventory from Korean Fashion Brands to Ease Financial Struggles of Small Businesses

[Asia Economy Reporter Yuri Kim] Shinsegae Department Store's off-price store 'Factory Store' has taken steps to support the domestic fashion industry.

On the 27th, Shinsegae Factory Store announced, "To ease the burden on fashion companies that have faced difficult times due to the worsening external business environment caused by COVID-19, we have purchased inventory worth 1 billion KRW from domestic fashion brands." Most of the inventory comes from small-scale designer brands.

Shinsegae Factory Store is the first off-price store introduced in Korea in 2017. It sells past-season products at discounted prices. Unlike department stores that lease space to each brand and charge rent, off-price stores have department store employees directly purchase products, manage inventory, and set prices and discount rates.

Following last year, Factory Store plans to continue purchasing domestic fashion inventory this year as well. For small businesses, this helps resolve internal management difficulties while expanding sales channels, and Factory Store can offer good products to customers at affordable prices.

Among the fashion companies featured this time, 'Sumisumi' is a women's career casual brand created by CEO Jung Sumi, who was the lead knit designer at a well-known domestic fashion company. Facing prolonged sales slumps, they partnered with Factory Store to sell off all inventory older than two years. 'Replain,' started in 2013, is a cashmere knit designer brand. Despite being stocked in Shinsegae and other department stores as well as gaining popularity on many famous online malls, they felt burdened by clearing past-season inventory and decided to sell exclusively through Factory Store. 'Nasty Kick' is a street casual brand mainly sold through online platforms and select shops. Due to continued poor sales caused by COVID-19 last year, they sold off all inventory to secure funds. This year, they plan to expand the scope to internal brands for additional sales.

Currently, Factory Store sells past-season products from about 100 brands, including Shinsegae's direct purchase items, products from 'Boondeshop'?a select shop created by Shinsegae?and various famous domestic and international companies, at discounts ranging from 30% to 80%. Operating nine stores nationwide in Goyang, Centum City, Paju, Gangnam, Daejeon, Yeongdeungpo, Siheung, Gijang, and Anseong, Factory Store plans to open its 10th store in Yeoju next month. Last year, they also launched an official store on the online mall SSG.com.