Samsung C&T’s fashion division suffered a 25.7 billion won (US$22 million) loss in China last year, following the closure of its SPA brand shop in Shanghai due to sluggish sales, the company said.
The company’s Shanghai subsidiary saw a sharp turnaround from an 8.3 billion won surplus in 2017. It is Samsung C&T’s fashion division’s only subsidiary operating in China.
Industry officials regard the failure of the 8Seconds fast fashion brand as one of reasons for its poor performance.
“The closure of 8Seconds stores in Shanghai created a huge loss for the Chinese subsidiary,” an official at Samsung C&T said. “Other brands, except for 8Seconds, have all posted a surplus in China.”
Some of the other brands that have entered the Chinese market are casual brand Beanpole and men’s apparel brand Rogatis and Galaxy.
The fast fashion brand 8Seconds opened its first flagship store in Huaihai Road, Shanghai in China in 2016, targeting young Chinese consumers.
The two-story, 3,300 square meter area building not only showcased the complete range of 8seconds but also housed Korean cosmetics, accessories and stationery brands, so that customers could experience various aspects of K-style.
However, the store closed in July last year, after operating for less than two years, due to poor market conditions and struggling sales.
Uncertainties stemming from China’s retaliation against Korean firms for South Korea’s deployment of a U.S. missile defense system, were the most often mentioned reason for explaining the downturns of Korean companies heavily relying on the Chinese market.
The official explained that Samsung C&T’s fashion division will shift its focus to online business to recover from its deficit in China, utilizing online or mobile apps such as Alibaba to reach out to potential consumers.
“We will strengthen our online business to boost earnings at our Chinese subsidiary,” the official said. “We plan to double the online sales proportion of Beanpole brands, including men, ladies and sports.”
Meanwhile, Samsung C&T’s fashion division has been stepping up efforts to increase its online presence in Korea. The company’s strategy goes hand in hand with its aim to develop online mall as a total e-commerce platform rather than a mall that sells only its apparel brands.
(Source: Korean Times)