Outdoor Sales Up 30% This Month Despite Subzero Weather
Profits Decline from December Due to Season Off
"Cannot Stockpile Inventory, Selling Even at Reduced Margins"
As the weather has rapidly turned cold this month, sales of outdoor apparel, including padded jackets, have surged. While the retail industry, which had experienced sluggish winter clothing sales due to unusually warm early winter temperatures and a consumption slump, welcomes this trend, fashion companies have greeted it with bittersweet smiles.
According to the retail industry on the 19th, sales of outdoor brands from the 1st to the 15th of this month grew by about 30% compared to the same period last year. Shinsegae Department Store and Hyundai Department Store also recorded growth rates exceeding 30% each.
Due to the continued abnormal warmth this year, demand for outdoor brands in October and November, the typical time to prepare winter outerwear, was not significant. Sales of outdoor apparel at the three major department stores increased by only 1-2%. According to the Korea Meteorological Administration's climate analysis for this fall, the average temperature this fall was 16.8°C, about 3 degrees higher than the normal 14.1°C. Starting in December, temperatures sharply dropped below freezing, leading to an increase in consumers purchasing winter clothes such as outerwear belatedly.
Thanks to the sharply cold weather, the retail industry expects winter clothing sales to increase further from the end of this year through early next year. A department store official explained, "As the weather warmed this year, the growth rate of thick outerwear sales significantly slowed down. We expect outdoor sales to grow during the remaining period, resulting in winter sales similar to last year."
The fashion industry also anticipates further growth in outdoor sales.
The problem lies in profitability. The winter season is a peak season where most products have high unit prices, so both sales and profits increase. Especially from September to November, the main sales period for winter products, many new products launched by each brand are sold. However, the season-off sales begin at the end of the year. Season-off refers to discounted sales before withdrawing new products released for the season. This inevitably lowers profit margins.
Because of this, the fashion industry expects to record poor performance again this winter. Initially, it was forecasted that the business conditions would improve toward the end of the year with a "low-high" trend, but prolonged consumption stagnation and the late arrival of cold weather were unexpected obstacles. A fashion industry official said, "Even if profits decrease, we cannot miss sales. We need to move inventory to maintain (cash) circulation, so we sell at a discount if necessary."
A customer browsing products at the Under Armour store located on the 7th floor of Lotte Department Store Main Branch. Provided by Lotte Department Store.
Many forecasts suggest that the fashion market will continue to face a recession next year. Consumer sentiment has not yet recovered, and the sharp rise in exchange rates could hinder consumption due to increased product prices caused by raw material cost hikes.
Some companies are understood to be adjusting next year's inventory or planning brand discounts to reduce stock. For example, goose down, used as padding material, must be secured a year in advance. Some brands have adjusted inventory in anticipation of poor sales. A fashion industry official predicted, "Some brands plan to aggressively hold off-season sales at major distribution channels from April to June next year to clear inventory. Unlike the past when the focus was on heavy outerwear, the trend will be to release short and thin padded jackets suitable for transitional seasons."
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