TBH Global Achieves Inventory Management Efficiency... Expectations for Profit Improvement Grow

K-fashion company TBH Global is raising expectations for strengthened profitability by delivering improved results in inventory management, following its online D2C (Direct to Consumer) strategy.

On March 26, TBH Global announced that its inventory ratio to sales last year was 24.9%.

In the fashion industry, inventory management is considered a core factor directly linked to profitability. Apparel manufacturers engage in proactive production to prepare for the next season, and the resulting volume is reflected as inventory assets. In particular, for highly seasonal apparel, the asset value can decline over time, leading to the risk of inventory valuation losses.

For these reasons, inventory management is recognized as the most important management challenge in the fashion industry. Typically, companies attempt to clear out off-season products through secondary and tertiary distribution channels such as outlets to minimize asset value decline; however, this approach can result in decreased profitability as well as damage to brand value.

To address these issues, TBH Global has chosen not to supply major brand products to outlet channels, instead selling them through its own mall and online mall-focused D2C structure. Through this strategy, the company is maintaining its brand image while securing profitability, and at the same time reducing inventory burden and the risk of impairment.

Even before production, TBH Global has been continuously strengthening its demand forecasting capabilities. Based on extensive accumulated sales data and market analysis expertise, the company is optimizing production volume to minimize inventory risk.

To further expand profit improvement this year, the company plans to enhance its inventory management capacity. It is considering various initiatives, including the introduction of artificial intelligence (AI)-based demand forecasting technology and securing overseas production facilities.

TBH Global expects that the combination of sophisticated AI demand forecasting, efficient inventory management, and a stable production system will create strong synergy effects. The company's goal for this year is to reduce the inventory-to-sales ratio to below 20%.

A company official stated, "The most significant challenge in the fashion industry is effective inventory management," and added, "Based on demand forecasting data and inventory management capabilities accumulated in both domestic and international markets, we continue to deliver outstanding results in the industry."

The official continued, "In particular, starting last year, we succeeded in bringing the inventory asset allowance rate down to the single-digit level on an annual average. This is a meaningful achievement compared to the double-digit average level seen in the industry, and it demonstrates the excellence of our demand forecasting and inventory management capabilities."

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