Uniqlo Hits 1 Trillion Won in Sales for the First Time Since Boycott and Pandemic
Domestic SPA Brands Also Show Strong Growth
Rational Consumption Increases Amid High Inflation and Economic Downturn
Manufacturing and distribution integrated (SPA) brands are posting strong performances in the domestic fashion market. This is attributed to the increase in consumers seeking SPA brands with high 'cost-effectiveness' (performance relative to price) at reasonable prices amid high inflation and economic recession.
According to the distribution industry on the 11th, F&RL Korea, which operates the SPA brand Uniqlo in Korea, surpassed annual sales of 1 trillion won in the 2024 fiscal year. F&RL Korea recorded sales of 1.0602 trillion won and operating profit of 148.9 billion won from September last year to August this year. This is the first time in five years since the 2019 fiscal year that Uniqlo has recorded annual sales of 1 trillion won in Korea. Operating profit also increased by 5.4% compared to the previous year. F&RL Korea, a company with a September fiscal year-end, discloses its performance by compiling results from September of the previous year to August of the current year.
Uniqlo was directly hit by the 'NoNoJapan' boycott movement against Japanese products that occurred in 2019. F&RL Korea is a joint venture between Uniqlo's Japanese parent company Fast Retailing and Lotte Shopping. F&RL Korea recorded sales in the 1.3 trillion won range for two consecutive years from the 2018 fiscal year, but sales halved to 629.8 billion won in the 2020 fiscal year immediately after the boycott movement. Operating profit also turned to a loss, dropping from 199.4 billion won in the 2019 fiscal year to an operating loss of 88.4 billion won the following year. However, operating profit returned to black immediately in the 2021 fiscal year with 52.9 billion won, and in the 2022 fiscal year, operating profit surged 117% compared to the previous year.
Domestic native SPA brands have also been posting strong performances one after another this year. Topten, operated by Shinseong Tongsang, is expected to be the only native SPA brand to approach 1 trillion won in sales this year. Topten's sales last year were about 900 billion won, and this year, provisional sales are expected to reach 970 billion won. E-Land's SPAO is also expected to generate sales of about 600 billion won this year, up about 25% from last year, and Eight Seconds, operated by Samsung C&T Fashion Division, has been showing double-digit growth every year with annual sales in the 300 billion won range last year.
Musinsa Standard, a private brand (PB) and SPA brand operated by Musinsa, is also continuing its success. From January this year to the 26th of last month, the number of visitors to Musinsa Standard's offline stores was cumulatively 10.28 million, surpassing 10 million. By age group, people in their 20s accounted for the largest share at 43%, followed by customers in their 30s at about 30.3%. Thus, customers in their 20s and 30s make up more than 70%.
The reason SPA brands are consecutively posting strong performances is believed to be the increase in the so-called 'YONO (You Only Need One)' generation, who buy only essential clothing amid high inflation and economic downturn. The YONO generation refers to consumers who avoid unnecessary or ostentatious consumption and emphasize practical consumption. SPA brands, which offer reasonable prices and a wide range of products, are gaining popularity among the YONO generation.
Another reason for their popularity is that SPA brands avoid excessive logos or patterns and mainly offer clean designs of so-called 'basic items.' These basic items are neat and versatile, making them easy to mix and match with other clothes.
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