Low Birthrate Direct Hit?... Hyungji Elite Smiles Broadly Thanks to Strong Baseball and Hanwha Fans

B2B Business Share in Workwear Sector Rises from 18% to 44%
Baseball Goods Sales Increase Including Hanwha Signing Ryu Hyunjin

School uniform manufacturer Hyoungji Elite is seeing solid success in its new business sectors of uniform and sports goods production. While sales from the school uniform business used to account for over 70%, the strong sales of uniform and sports goods products have alleviated the sales concentration. In particular, the sports business division saw baseball-related goods sell like hotcakes, thanks to the TV program 'Choegang Baseball' and the team 'Hanwha Eagles'.

According to the Financial Supervisory Service's electronic disclosure system on the 30th, Hyoungji Elite (a corporation with a fiscal year ending in June) recorded sales of 42.3 billion KRW in the B2B business division for the cumulative third quarter. This figure increased by more than 30 billion KRW compared to 10.2 billion KRW recorded in the third quarter of last year. As sales increased, the sales proportion of the B2B business division expanded from 18% to 44%. The B2B business division produces corporate uniforms (workwear), making work clothes for large corporate affiliates and financial institutions. It currently accounts for over 70% of the large corporate affiliate market.

The fashion industry estimates the domestic workwear market size to be over 1 trillion KRW. According to global market research firm TMR Analysis, the global workwear market is expected to grow at an average annual rate of 6% from 2022 to 2031. The increase in new orders due to market expansion is analyzed to have significantly boosted sales in the B2B business division. Additionally, focusing on clothes that can be worn in daily life rather than just workwear through the brand 'Willbe' has had a positive effect. A Hyoungji Elite official said, "B2B uniform sales increased as new contract orders rose and the number of employees at existing contracted companies grew," adding, "As interest in workwear grows, we will also expand into the B2C market."

The sports goods division's sales proportion entered double digits, rising from the 8% range to 11%. Sales for the third quarter reached 11.1 billion KRW, more than doubling compared to 5 billion KRW in the same period last year. The baseball segment contributed significantly to sales. This was due to the strong sales of goods (uniforms, hats, etc.) from the Hanwha Eagles, who acquired pitchers Ryu Hyun-jin and Kim Kang-min.

Baseball goods generate significant sales through on-site sales, and according to the KBO, 21 out of 23 games held at the Hanwha Eagles' Daejeon home stadium were sold out. The number of spectators increased by more than 60% compared to the previous year. The JTBC variety show Choegang Baseball goods also sold well. The baseball team Choegang Monsters' live games have sold out for 10 consecutive games, and recent ticket reservations recorded over 250,000 simultaneous users.

In the sports goods division, the unit sales price is in the 60,000 KRW range, which positively contributes to increasing company profits. In contrast, the uniform business faces intense order competition, making it difficult to raise the unit sales price. The unit sales price for uniforms is 20,000 KRW, and for school uniforms, it is in the 30,000 KRW range.

As sales from new businesses increased, the company's total sales also surged. As of the third quarter, the company's sales reached 96.5 billion KRW, an increase of 40 billion KRW compared to 57.2 billion KRW in the same period last year. The company expects to record sales of 100 billion KRW for the first time in its history by the end of this fiscal year. However, due to rising cost of sales, this did not translate into profit improvement. Operating profit was 2 billion KRW, similar to 1.8 billion KRW recorded in the same period last year.