4 More Stores Added in China This Month
Huia Closes Mix to Mix Brand
Focuses on Jeximix... Full-Scale China Strategy in Second Half
Brand X Corporation, which operates the yoga apparel brand XEXYMIX, is focusing all its efforts on its business in China. Last month, after the largest shareholder stepped down from management, Brand X Corporation has been winding down most of its new businesses and is strategizing to grow XEXYMIX into a global athleisure brand.
According to the distribution industry on the 4th, Brand X Corporation partnered with YY Sports to open two stores in the Shenyang area of China last month, and additionally opened two more stores in Jinan and Shanghai. This brings the total number of XEXYMIX stores in China to seven.
The company began its full-scale entry into the Chinese market by opening three offline stores, starting with its first store in China, the Changchun Eurasia store, followed by the Tianjin Henglong Plaza Riverside 66 store, and the Shanghai Wanxiangcheng Department Store. They aim to open about 15 to 20 stores by the end of this year.
Targeting 20 Stores in China by Year-End... Betting on Premium and Large-Scale Stores
Currently, consumption of athleisure apparel is clearly increasing in China. More people are enjoying yoga, and the number of people using yoga wear as a fashion item in daily life is growing. According to market research firm Gong Enwang, the Chinese yoga apparel market size is expected to more than double from $1.6 billion in 2021 to $3 billion by 2028. The share of the Chinese yoga apparel market is also high, projected to account for 26.44% of the global market by 2028.
Canadian athleisure company Lululemon has already succeeded in the Chinese market by branding itself as a "luxury yoga wear" targeting the middle class. The Chinese market has played a significant role in the overall sales growth of the company. In the first quarter, Lululemon recorded sales similar to last year in the U.S. and other regions, but sales in China and other global markets grew by 25% during the same period, boosting overall performance.
XEXYMIX’s target customers are the Chinese middle class. The strategy is to attract consumers by pursuing premium and large-scale stores but offering prices lower than Lululemon. First, the store size has been made about 50 to 60 pyeong (approximately 1,650 to 1,980 square feet), more than twice the size of Korean stores (20 to 30 pyeong). Locations were chosen where premium sports brands like Nike, MLB, and Fila are present. This fall and winter, they plan to introduce higher-priced padded products. Marketing efforts have also been strengthened, with Chinese member 'Wuji' from the girl group serving as the model.
A XEXYMIX representative said, "Since sales in China will become full-fledged from the third quarter, we expect to record the highest sales this year. Because these are large stores, we cannot rapidly increase the number of stores, but we will gradually expand."
"Even Brands That Didn’t Work Were Closed" ... Xoo Su-yeon Leading as Sole CEO to Grow 'XEXYMIX'
Brand X Corporation’s aggressive approach to the Chinese market indicates that the business restructuring to focus on growing XEXYMIX as the core brand has been completed. Since the end of 2022, Brand X Corporation has been focusing on strengthening its internal structure by winding down underperforming business sectors and concentrating on the high-growth athleisure fashion segment. Rather than investing in new businesses, the company decided to pour more resources into XEXYMIX, which has been rapidly increasing sales with golf wear, tennis wear, and men's products.
In fact, Brand X Corporation sold its subsidiary Gelato Lab, a gel nail brand acquired in January 2021, to a competitor after about two years, and in November last year, it also divested its stake in Brand X Healthcare, a health food specialist company. The company also reduced its stake in Brand X Fitness, which was expected to be a foothold for entering the digital healthcare market, from 87% to 16%. This effectively means the healthcare business has been wound down, and the last activity on the YouTube channel operated by 'Gukmin PT,' a platform run by Brand X Fitness, was a year ago.
On the 10th of last month, CEO Xoo Su-yeon, who has been leading the XEXYMIX business, became the sole CEO. Until now, Brand X Corporation had a dual CEO system with Xoo Su-yeon and Kang Min-jun, who was in charge of new business and marketing, maintaining a husband-and-wife management structure. However, after the company’s largest shareholder, former CEO Kang, wound down all the brands he led, the business was reorganized around CEO Xoo Su-yeon.
According to XEXYMIX’s semi-annual report, the company ended operations of 'Mix to Mix,' a sub-brand of XEXYMIX, and also discontinued the business of 'HUIA,' which sold toothbrush sterilizers and cleaning agents.
Recovered 10 Billion KRW from HYBE CB Investment... Can They Accelerate Investment?
Brand X Corporation has also recovered 10 billion KRW in funds by winding down investment activities. In November 2021, the company formed Lakewood No. 2 Association and invested 10 billion KRW in HYBE convertible bonds (CB). Although the bonds had a zero interest rate of 0%, the company invested expecting capital gains from HYBE’s stock price increase. However, HYBE’s stock price plummeted from around 380,000 KRW to the mid-150,000 KRW range, resulting in the company only recovering the principal. Essentially, the investment yielded zero profit.
On the 11th, Brand X Corporation exercised the early redemption option to recover the 10 billion KRW investment and dissolved the association. The association was a subsidiary for investment activities, and this move is interpreted as a commitment to focus more on the core business than on investment activities.
Previously, Brand X Corporation also raised funds by issuing 20 billion KRW in convertible bonds for the first time after listing to expand overseas markets. At that time, the company explained that the funds were secured in advance for overseas business expansion. As the company focuses on global market expansion, continuous funding is expected. Currently, the company’s retained earnings stand at about 40 billion KRW.
A Brand X Corporation representative said, "We have not decided how to use the recovered liquidity yet. Since we are moving in the direction of growing XEXYMIX into a global brand, we will focus on promoting the brand overseas."
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