F&F Soars with '450% Growth' Performance Wings

[Asia Economy Reporter Yujin Cho] F&F, which operates the Discovery and MLB brands, is estimated to have posted operating profit growth in the first quarter of this year despite the recession caused by the novel coronavirus infection (COVID-19), standing out alone. Among listed fashion companies such as LF, Shinsegae International, and Fila Holdings, F&F is the only one to show profit growth.

According to financial information firm FnGuide on the 17th, F&F's estimated consolidated operating profit for the first quarter of this year is 21.4 billion KRW, an increase of 13% compared to the same period last year. Sales (182.8 billion KRW) and net profit (17.9 billion KRW) during the same period are also expected to have increased by 12% and 24%, respectively. This contrasts with the overall sluggish performance in the fashion industry following the first confirmed COVID-19 case in Korea on January 20. The delay in school openings and decreased foot traffic in offline stores prevented the usual benefits from the new semester and Valentine’s and White Day sales. LF’s operating profit for the first quarter was 18.8 billion KRW, Shinsegae International’s was 23.6 billion KRW, and Fila Holdings, the holding company of Fila Korea, posted 93.2 billion KRW, each showing sharp declines of 28%, 19%, and 20% year-on-year, respectively.

Fila Holdings, whose overseas business is reflected in consolidated results, was heavily impacted by deteriorating business conditions in Europe and the United States, where confirmed cases have surged since last month. Due to COVID-19, outdoor activities such as sports have been curtailed, and sales have plummeted in Europe, which accounts for about half of royalty income, as confirmed cases surged. In the U.S. market, which has been sluggish since the fourth quarter of last year, major offline stores have suspended operations, making negative growth inevitable this year. A Fila Holdings official said, "The opening schedule for two outlet stores in the U.S. this year has been temporarily postponed, and there is no confirmed date for resumption."

F&F led profit growth with strong performances from its main brands, Discovery Expedition and MLB. Discovery saw strong sales of accessories such as shoes and backpacks during the new semester promotion held from late December to early January, just before the first confirmed case in Korea. This strong sales momentum continued online even after the COVID-19 outbreak, driving performance growth.

Main products such as the Bucket Walker 2, Jogger Flex, and Max have gained popularity among the 10-20 millennial generation, boosting sales. Discovery’s total shoe sales in the first quarter increased by 300% compared to the same period last year. An F&F official said, "Sales from Discovery’s shoe segment have risen to a level comparable to the apparel segment, and despite a modest new semester season, strong backpack sales contributed to the positive performance."

MLB’s solid demand in China also contributed to the strong performance. MLB’s ugly shoes Big Ball Chunky and hat products featuring ribbons and glitter continue to be in demand on China’s Tmall. MLB, which features HyunA as a model, has gained recognition as a brand worn by popular female celebrities and ranked first in sales per square meter in the fashion and accessories category at downtown duty-free shops last year. MLB’s bag sales increased by 450% and shoe sales by 260% in the first quarter. An F&F official said, "Although offline sales such as duty-free shops and exports declined somewhat after the COVID-19 outbreak, daily sales online on platforms like China’s Tmall are at the level of the fourth quarter of last year."

This content was produced with the assistance of AI translation services.