No.1 Fashion Company Hit Hard...Outdoor Breakthrough [MZ Leaving Golf Courses]

Kris F&C Faces Poor Performance Following Last Year
Golfwear Sales Slowdown Including Parigates and Ping
"Outdoor Brand to Achieve 600 Billion KRW Sales Within 3 Years"

During the COVID-19 pandemic, the golf craze centered around the MZ (Millennial + Z) generation cooled off sharply, causing the golf apparel specialist Chris F&C to face poor performance. After the transition to the COVID-19 endemic phase, overseas travel resumed, and with the economic downturn tightening wallets, it appears that the 20s and 30s age group has withdrawn from golf due to its high costs. Chris F&C is planning to enter the outdoor market as a breakthrough strategy.

According to the Financial Supervisory Service's electronic disclosure system on the 19th, Chris F&C's first-quarter sales amounted to 70 billion KRW, a slight decrease of 2 billion KRW (3%) compared to the same period last year. However, operating profit during this period plunged by more than 90% to 600 million KRW. While sales volume decreased, the burden of cost of goods sold increased due to rising raw material prices.

Leading Domestic Golfwear Specialist... Growth Momentum Stalls

Chris F&C is the number one golfwear company in the domestic market. Since its establishment in August 1998, it signed a clothing license agreement with the U.S. golf brand PING in December 1999, and has since entered licensing agreements with overseas brands such as Japan’s Paris Gates and Master Bunny, and Scotland’s St. Andrews, selling them domestically. It also owns its own brand, Phantom.

Before the COVID-19 pandemic, the company’s annual sales were around 250 billion KRW, but it grew to about 380 billion KRW during the global pandemic. However, sales began to decline last year, with the decrease accelerating this year. Notably, operating profit expanded to 87 billion KRW in 2021 but shrank to single digits last year.

This poor performance reflects the domestic golf market downturn. The domestic golf-related market nearly doubled to around 6 trillion KRW compared to before the COVID-19 pandemic. However, it has been declining since the endemic phase. Amid high inflation, rising costs such as green fees, cart fees, and caddie fees have led to customer attrition. The sharp drop in golf demand has resulted in golf franchises withdrawing from the market.

LF’s U.S.-style golfwear brand Random Golf Club, launched in September last year, decided to withdraw in less than a year, and Samsung C&T Fashion’s test business for Maison Kitsun? Golf, launched last spring, will end next month. Although Chris F&C’s Paris Gates and PING brands grew to annual sales of over 100 billion KRW, the decline in golfers since last year caused brand sales to fall below 100 billion KRW again last year.

Chris F&C Challenges Outdoor Market... "Achieving 1 Trillion KRW in Sales"

Chris F&C has identified the outdoor market as a new growth engine and is pursuing aggressive management. After acquiring the Italian sportswear brand Hydrogen in 2022, the company signed an exclusive contract with the Swiss outdoor brand Mammut in October last year. Recently, it secured exclusive business rights for the outdoor brand And Wander, popular among Japan’s MZ generation.

The target audiences of these brands differ. Hydrogen offers casual wear suitable for running and light trekking. Mammut targets consumers seeking authentic outdoor products. Since Mammut has a solid customer base in Europe for equipment and footwear, it plans to introduce high-performance clothing, equipment, and shoes domestically. A Chris F&C official said, "The golf market itself is small, limiting sales expansion. To grow in size, we saw the need to expand into the outdoor market, which has a larger sales scale."

In fact, the sportswear market is growing every year. According to market research firm Trend Research, the sportswear market size is expected to reach 6.969 trillion KRW this year, growing about 4% compared to the previous year.

Chris F&C plans to expand Hydrogen and Mammut stores to 50 by next year. Currently, there are 16 stores through Hydrogen’s directly operated stores and department stores, with a goal to increase to 40 by next year. Mammut plans to open its first store at Hyundai Department Store Pangyo branch on August 15. And Wander will operate its first pop-up store outside department stores in September and will plan store operations later.

The expected sales within three years are 1 trillion KRW. The company aims to maintain sales of around 400 billion KRW in the golfwear sector and achieve 600 billion KRW in the outdoor sector. Currently, the outdoor sector contributes no sales.

However, Chris F&C stated that it has no plans to acquire additional operating rights beyond these outdoor brands.