[Asia Economy Reporter Seungjin Lee] The fashion industry, which was pushed to the brink last year due to COVID-19, has achieved a dramatic turnaround thanks to the pandemic. This is because the number of young golfers visiting golf courses surged sharply as outdoor activities became difficult due to COVID-19. Furthermore, consumption, which had been severely restrained due to COVID-19, revived from the beginning of the year with a 'revenge consumption' trend, bringing vitality to the fashion industry overall in the first quarter.
Sales Rebound Among 2030s Flocking to Golf Courses
According to the fashion industry on the 11th, major fashion companies all made significant progress in the first quarter of this year, shaking off last year's sluggishness. This is due to the effective impact of the golf brand business, which has been continuously strengthened since last year. According to the Korea Golf Course Management Association, the number of visitors to golf courses increased by 5.03 million compared to the previous year, and a significant portion of them were young golfers in their 20s and 30s.
Fila Holdings, which is about to announce its earnings, is a representative fashion company benefiting from golf. Fila's sales in the first quarter of this year are expected to increase by 23% year-on-year to 974.2 billion KRW, and operating profit is projected to rise 150% to 168.3 billion KRW.
This is influenced by the strong performance of its subsidiary Acushnet Corporation. Acushnet's golf business sales in the first quarter reached 647.2 billion KRW, a 32.6% increase from the previous year, and operating profit recorded 133.8 billion KRW, up 423.8%. This reflects the rapid growth in golf demand after COVID-19. Acushnet, the world's largest golf equipment company owning brands such as Titleist, was acquired by Fila in 2011.
Kolon Industries FnC (hereafter Kolon FnC), which had seen its operating profit decrease every year since 2014 and fell into the red last year due to the direct impact of COVID-19, succeeded in turning a profit this year. Golf played a key role in this success. Kolon FnC introduced the premium American golf brand G/FORE in February and launched its own brand 'Golden Bear' targeting the MZ generation (Millennials + Generation Z) in March.
Sales of Near-Luxury Goods Rise Due to Revenge Consumption
The fashion industry's strong performance continued due to revenge consumption by younger generations. Samsung C&T's fashion division recorded sales of 421 billion KRW, a 17.9% increase year-on-year, and operating profit turned positive at 21 billion KRW. Hansome, a fashion company affiliated with the Hyundai Department Store Group, achieved a rebound with first-quarter sales up 22.8% to 333.3 billion KRW and operating profit increasing 54.5% year-on-year to 45.2 billion KRW.
Shinsegae International and LF, which are about to announce their earnings, are also expected to show a performance rebound. Shinsegae International's first-quarter operating profit is forecast to increase 52.5% year-on-year to 18.2 billion KRW. LF is expected to turn a profit with an operating profit of 5.1 billion KRW.
The rebound in performance is interpreted as being largely due to increased consumption of near-luxury (contemporary) goods by the MZ generation (Millennials + Generation Z). Those who had kept their wallets closed last year have started to release suppressed consumption this year, focusing their spending on brands classified as contemporary.
Tommy Hilfiger, an imported brand operated by Samsung C&T, saw sales increase by 41% from January to April 9 this year compared to the previous year. During the same period, Lemaire also increased by 166%. 'AMI,' famous for its brand logo combining a heart and the letter A, recorded cumulative sales (as of April) that increased 340% year-on-year.
A fashion industry insider said, "Along with the influx of new golfers mainly in their 20s and 30s, fashion companies' performance is also rising together. As COVID-19 continues, the golf population is expected to keep increasing, and with consumer sentiment recovering, the fashion industry is also switching back to a growth trend centered on golf and luxury goods."
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