Overseas Sports Brands Announce Direct Entry into Korean Market

While the domestic fashion industry is struggling with both an economic downturn and abnormal weather conditions, overseas sports brands are instead actively entering the Korean market. This is because Korean consumers are emerging as an enthusiastic group for new brands, and are leading global fashion trends through social media and other platforms.

According to the fashion industry on August 27, Canadian premium outdoor brand Arc'teryx signed an agreement on August 20 to acquire the Arc'teryx business of Nelson Sports, which has been exclusively distributing the brand in Korea. Through this deal, Arc'teryx plans to directly enter the Korean market and fully launch its Direct-to-Consumer (DTC) business, engaging directly with consumers. The DTC business model involves the brand selling directly to consumers without going through intermediary distribution channels.

Arc'teryx, often called the "Hermes of the outdoor world" due to its high prices, is a brand gaining popularity especially among younger generations. In Korea, it became a sensation in 2019 when Samsung Electronics Chairman Jay Y Lee was spotted wearing a red "Firebee AR Parka" on a train to Busan, earning the nickname "Jay Y Lee Parka." At the time, the parka sold out rapidly, causing a surge in domestic sales.

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As a result, Nelson Sports, which has been responsible for Arc'teryx's distribution in Korea, saw its sales increase from 50.1 billion won in 2021 to 161.1 billion won last year-about a threefold increase in four years. During the same period, operating profit rose from 11.3 billion won to 40.2 billion won, nearly quadrupling. The Arc'teryx business accounts for about 80% of Nelson Sports' total sales. An Arc'teryx representative explained, "Korea is a market with an active outdoor community and strong demand for Arc'teryx products, so the shift to a DTC model is a natural strategic choice."

Global sports brand New Balance also recently announced its direct entry into Korea. Since 2008, Eland World has been handling New Balance's distribution in Korea. When first introduced, annual sales were about 25 billion won, but by last year, they had grown to 900 billion won. With domestic sales expected to surpass 1 trillion won this year, the brand's headquarters has decided to establish a Korean subsidiary.

However, since Eland will continue operating the New Balance brand until 2026, New Balance headquarters is expected to directly enter the Korean market starting in 2027. Eland World's cumulative sales for the first half of this year have shown growth for five consecutive years, with New Balance and New Balance Kids sales in the sports division increasing by approximately 13% and 20%, respectively, compared to the previous year, driving strong performance.

New Balance

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New Balance. Photo by Eland World

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Japanese premium outdoor brand Goldwin will also open its first directly managed standalone store in Korea next month at Shinsegae Department Store's Gangnam branch. Goldwin entered the Korean market in 1992 through a joint venture with Youngone Trading Holdings, establishing Goldwin Korea (now Youngone Outdoor), but agreed last July to terminate its license contract with Youngone Outdoor effective January 1 of this year. Last November, Goldwin tested the direct entry effect through a pop-up store in Seongsu-dong.

During the high inflation period, Gopcore (outdoor wear worn as everyday clothing) fashion is gaining popularity, leading to an expansion of the "cost-effective outdoor" market. Yonhap News

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Among global brands, Korean consumers are classified as an active demand group.They tend to acquire information through various social networking services (SNS) and communities at a relatively faster pace than overseas consumers, and quickly spread related products as trends. Offline spaces like Seongsu-dong or Apgujeong Dosan-daero, where the latest fashion and beauty trends can be experienced, are also an advantage. An industry insider explained, "From the perspective of overseas headquarters, Korea is not just a sales market but serves as a strategic outpost for global strategy," adding, "The younger generation's consumption spreads quickly and their ability to propagate trends is especially strong."