[Exclusive] 'Fashion Powerhouse' Shinsegae International... Online Launch, Store Optimization, Brand Expansion 'Three-Track'

Closure of 40 Inefficient Stores Including BOB, JIGCUT, and KOMODO
Launch of BOB Online-Only Line for Accessories and Miscellaneous Goods
Planned Introduction of Various Imported Fashion and Luxury Brands in Korea

[Asia Economy Reporter Lee Seon-ae] Shinsegae International is set to actively improve its fashion business structure through selection and concentration to elevate its status as a 'fashion powerhouse.' The restructuring efforts will be driven by a 'three-track' strategy: ▲streamlining through offline store closures ▲launching online-exclusive brands and expanding e-commerce business ▲strengthening brands and expanding the portfolio.

◆Closure of 40 stores and launch of online-exclusive brands=On the 23rd, Shinsegae International finalized its business strategy for the second half of the year and officially began enhancing the efficiency of its domestic fashion business. First, it decided to transform its business structure to generate profits even during the downturn by boldly closing inefficient stores. Among approximately 400 stores of its own women's wear brands BOBB, JIGOTT, Studio Tomboy, and men's wear brand KOMODO, 40 stores with overlapping commercial districts or low efficiency will be sequentially closed within the second half of the year.

In particular, brand efficiency efforts will be pursued by simultaneously streamlining offline stores and strengthening online channels. A Shinsegae International official explained, "Recently, the main purchasing age group for fashion has been getting younger, and with the establishment of a contactless culture, consumer patterns are shifting from offline to online," adding, "Therefore, we have devised a strategy to maximize the synergy effect between online and offline by strengthening online competitiveness and strategically operating only efficient offline stores."

Accordingly, women's wear will boldly break the existing mold and strengthen its e-commerce business targeting the 20s and 30s age groups. Instead of the fashion industry's traditional seasonal new product launches, BOBB has shortened the new product release cycle to a monthly basis since early this year, receiving great responses from trend-sensitive millennials. In the second half of the year, the recently popular accessories and miscellaneous goods lines will be separately segmented, and additional online-exclusive lines will be launched. JIGOTT has recently developed online-exclusive products priced about 30-50% lower than existing price ranges for Generation Z (those born from the mid-to-late 1990s to the early-to-mid 2010s), receiving positive feedback. Accordingly, in the second half of the year, it will actively expand its online distribution network by entering various external online channels.

◆Strengthening women's wear portfolio=Focus will also be placed on enhancing brand competitiveness. First, it has diversified its own women's wear portfolio. To this end, on the 1st of this month, it acquired Delarana and Ilaile, private brand (PB) women's wear brands from Shinsegae Department Store. This is to expand the lineup by supplementing the existing casual brand-centered business with contemporary brands and to attract a broader customer base.

Contemporary brands have been the fastest-growing genre in department stores, excluding luxury brands, for several years. They are growing alone despite the sluggish market by offering sophisticated designs comparable to luxury brands with competitive pricing.

Delarana showcases luxury-level high-end products and has recorded double-digit sales growth annually. It pursues premium quality by using only the finest fabrics and producing most products through local workshops in Italy, known as the home of luxury, receiving positive responses from customers in their 40s and 50s. Ilaile is a knit-specialized brand with strengths in feminine silhouettes and luxurious materials. As its brand name, derived from the Italian word 'ilare,' meaning 'pleasant, cheerful,' it targets customers in their 30s and 40s with youthful and sophisticated designs, establishing a solid position in the contemporary segment within Shinsegae Department Store.

Shinsegae International plans to nurture Delarana and Ilaile as mega brands to strengthen the competitiveness of its women's wear business. A Shinsegae International official emphasized, "We will achieve structural growth through portfolio diversification and boldly streamline inefficient stores to improve the overall structure of the fashion business."

◆Considering introduction of imported fashion brands=In the imported fashion business, the focus is on securing brands.

Shinsegae International's imported apparel business involves directly importing overseas brands and distributing them to domestic department stores, starting in 1992 with the introduction of 'Emporio Armani.' Brands it holds, such as 'J.Lindeberg,' 'Maison Margiela,' 'Acne Studios,' and 'Alexander Wang,' have shown rapid growth, becoming the driving force behind its performance.

Since discovering promising overseas brands, securing distribution rights, and preempting distribution channels are crucial, Shinsegae International is continuously reviewing the introduction of various brands into the domestic market. A Shinsegae International official stated, "We are currently reviewing a variety of good brands and plan to introduce them to the domestic market."

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