Fashion Industry Feels Down... Samsung C&T Posts Strong Solo Earnings

Amid consumer downturn causing a recession in the fashion industry, the industry's performance in the first quarter of this year showed mixed results. While LF and Kolon FnC received poor results, Samsung C&T achieved strong performance alone with simultaneous growth in sales and operating profit.

Samsung C&T Fashion Division's Beanpole opened a pop-up store on the 8th at Shinsegae Department Store Gangnam Branch in Seocho-gu, Seoul.
[Photo by Samsung C&T]

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Samsung C&T's fashion division posted an operating profit of 57.3 billion KRW in the first quarter of this year, a 35.7% increase compared to 42.0 billion KRW in the same period last year.

Sales in the first quarter reached 526 billion KRW, up 11.0% from 474 billion KRW in the same period last year.

By brand, overall performance improved for Eight Seconds, Beanpole, and Beaker.

A Samsung C&T official explained, "Due to continuous product competitiveness improvement and sales structure efficiency, we achieved solid results across all business sectors, resulting in increases in both sales and operating profit."

On the other hand, Kolon Industries FnC division (Kolon FnC) recorded first-quarter sales of 279.2 billion KRW, a 4.9% increase from the same period last year, but operating profit dropped sharply by 63.3% to 5.6 billion KRW.

Kolon FnC plans to strengthen its portfolio to secure new growth engines going forward.

LF also recorded poor results in the first quarter of this year. Operating profit was 11.8 billion KRW, down 75% from the same period last year, and sales decreased by 2% to 441.4 billion KRW. Net profit was recorded at 13.4 billion KRW.

By business segment, the fashion business saw about 9% sales growth year-on-year, supported by mega brands such as Hazzys and Daks, as well as newly launched brands like Reebok, despite ongoing economic uncertainties.

The food-related business also saw sales increase by about 23%, driven by strong performance in home dining HMR products.

However, the real estate business underperformed due to a decline in sales from asset sales such as Koramco Trust's REITs amid a sluggish real estate market. The sales proportion of the real estate segment (financial business), which was 12% last year, fell to 4% in the first quarter.

An LF official said, "We will continue investing in branding to build fandom centered on mega brands and support the growth of new brands such as Reebok and Pato to maintain a stable fashion business. Through stable risk management, the real estate segment's performance is expected to stabilize in the second half of the year."

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