Musinsa Surpasses 200 Billion KRW in Production Funding Support for Small and Medium Brands

Contributing to Mutual Growth through Resolving Financial Difficulties

Musinsa announced on the 26th that the cumulative amount of production funds it has supported for small and medium-sized fashion brands struggling due to lack of funds has surpassed 200 billion KRW.

Musinsa operates a win-win growth project that lends production funds interest-free for the next season so that its partner brands can focus stably on production and marketing. This reflects the fashion industry's unique "produce first, sell later" structure, where products must be produced first and then profits are made from the sales proceeds.

Since 2015, Musinsa has been supporting production funds aligned with the seasonal production cycles of fashion brands, providing funds for the Spring/Summer (SS) and Fall/Winter (FW) seasons. As of the first half of 2023, the cumulative amount of funds supported to brands over eight years has reached 213.8 billion KRW.

Last year, a total of 81.7 billion KRW was provided in four quarterly installments to brands that passed the screening process among those who applied for production fund support. This year, 21 billion KRW was supported in March for the SS season production funds, followed by approximately 21.8 billion KRW in May to small and medium-sized fashion brands. Currently, Musinsa is the only domestic fashion store that provides interest-free production funds to its partner brands.

Musinsa’s win-win growth efforts have been proven effective through the growth of brands that received production fund support. An analysis of the growth rate of transaction amounts at Musinsa Store for brands that received interest-free production funds in 2022 showed an average increase of 80% compared to the previous year. Notably, the brand with the highest growth rate saw its transaction amount increase by more than 83 times, and more than half of the participating companies experienced transaction growth of over 50%.

Last year’s achievements are especially meaningful as they were accomplished despite the prolonged COVID-19 pandemic, Vietnam lockdowns, and the Ukraine crisis, which directly impacted the fashion industry. It is evaluated that Musinsa contributed to practically solving the financial issues of fashion brands directly affected by the surge in global raw material prices, rising labor costs including production infrastructure expenses, and increased logistics costs due to supply chain instability.

A Musinsa official stated, “We plan to further expand benefits for emerging brands and startups that have relatively unstable cash flow and difficulties securing costs. We are also exploring ways to lower the screening criteria for brands applying for production fund support to help more partner brands focus stably on brand operations.”

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