The fashion industry thrives as furniture sales gather dust
The lifting of social distancing measures in April sparked a boom in the fashion industry as people stepped out, giving furniture and home décor companies that were thriving when people were stuck at home. I gave it a shot.
Second quarter earnings for leading fashion companies were up 75% year-over-year. The second quarter is typically less profitable because summer clothes are relatively cheaper than fall and winter clothes. But this year, volumes increased as people returned to offices and restaurants after social distancing measures were lifted.
Samsung C&T’s fashion division reported second quarter sales of KRW 515 billion ($393 million) and operating profit of KRW 62 billion, a 16% increase in sales and a 44.2% increase in operating profit . Samsung C&T cited a “recovery of customer sentiment” as the reason for its strong performance.
Shinsegae International posted sales of 383.9 billion won, up 12.7%, and net profit of 33.3 billion won, up 74.6%. “These results consumption of clothing due to the lifting of social distancing,” the spokesperson explained.
Handsome clothing brand sales increased 14.3% to KRW 357.4 billion, while net profit decreased 5.4% to KRW 17.7 billion.
A Handsome spokesperson said, “The reopening has increased demand for clothing, with sales in the outdoor and sportswear categories particularly strong.
The company said the cost of new business, such as the launch of a new perfume line, slightly reduced its profit.
Kolon Industries FnC, the fashion division of Kolon Industries, recorded sales of KRW 309.9 billion, up 22.9%, and operating profit of KRW 23.4 billion, up 52.9%.
“This is our best performance in the second quarter,” said a Kolon Industries FnC official.
The outlook for the second half is mixed. Some expect similarly strong results, while others say business may stagnate due to high inflation.
Conversely, furniture and upholstery companies performed poorly in the second quarter.
Demand for furniture and interiors will increase due to moving and new construction, but housing transactions are sluggish due to rising interest rates and tighter lending regulations. Rising raw material prices and rising logistics costs are also contributing factors to the deterioration in profitability of furniture and interior products.
Hansem’s net profit for the second quarter was 988 million won, down 96.1 percent from the same period last year. Sales fell by 12% to his 500 billion won. LX Hausis’ sales increased by 5.7% to 948.5 billion won, while net loss increased by 241.3% to 47.5 billion won.
Hyundai Revert Furniture’s sales increased by 2 percent to 360.1 billion won, but recorded a net loss of 610 million won compared to a net profit of 920 million won in the same period last year. Shinsegae Casamia posted sales of KRW 67.8 billion, up 40.5%, but posted a net loss of KRW 3.9 billion, up 85.7% from the previous year.
The furniture and interior industry is optimistic about the second half of the year.
A Hansem spokesperson said, “We expect revenue growth to continue as measures such as the relaxation of loan regulations for first-time homebuyers and the postponement or suspension of transfer taxes for people who own multiple properties are positively impacting the market. We expect it to improve,” he said. .
A spokesperson for Hyundai Revert Furniture said, “We plan to gradually recover profitability in the second half of the year by expanding the entire interior distribution network and strengthening the lineup of overseas premium furniture.”
Baek Il-hyun [[email protected]]