As furniture sales gather dust, the fashion industry thrives

A shopper browses clothes at a clothing store in Seoul on April 13. [YONHAP]

The lifting of social distancing measures in April boosted the fashion industry as more people ventured out and hurt furniture and interior decoration companies, which thrive when people are stuck at home.

Revenues at major fashion companies grew by 75 percent in the second quarter, and the second quarter is less profitable because summer clothing has lower prices than fall or winter clothing. But the rate has increased this year as people return to offices and restaurants after lifting social distancing measures.

Samsung’s C&T fashion division reported sales of 515 billion won ($393 million) and profit of 62 billion won in the second quarter, a 16 percent increase in sales and 44.2 percent growth in operating income. Samsung C&T credited “regaining customer sentiment” for the strong performance.

Shinsegae International’s sales rose 12.7 percent to 383.9 billion won, while net profit rose 74.6 percent to 33.3 billion won. “These results were a reentry benefit. consumption of clothing due to the rise of social distancing,” said the spokesperson.

Handsome apparel brand’s sales rose 14.3 percent to 357.4 billion won, while net profit was 17.7 billion, down 5.4 percent.

A spokesperson for Handsome said: “As a result of the reopening, demand for clothing has increased and sales of outdoor and sportswear have been very strong.”

The company said its profit was down slightly due to new business ventures such as the launch of a new perfume line.

Colon Industries FNC, the fashion division of Colon Industries, posted sales of 309.9 billion won, a 22.9 percent increase, while profit was 23.4 billion won, up 52.9 percent.

“This is our highest performance in the second quarter,” Colon Industries FNC official said. “As the number of new golfers increases, the performance of our golf apparel product has grown exponentially.”

There are mixed forecasts for the second half. Some expect equally buoyant results, while others say business may slow down due to high inflation.

On the flip side, furniture and interior decoration companies performed poorly in the second quarter.

Demand for furniture and interior design increases as people move or buy new homes, but housing transactions have slowed due to rising interest rates and lending regulations. Rising raw material prices and rising logistics costs are contributing to the deterioration in the profitability of furniture and interior products.

In the second quarter, Hansem’s net profit was 988 million won, down 96.1 percent from the same period last year. Sales rose 12 percent to 500 billion won. LX Hausys’ sales rose 5.7 percent to 948.5 billion won, but its net loss grew 241.3 percent to 47.5 billion won.

Hyundai Livart furniture sales rose 2 percent to 360.1 billion won, but posted a loss of 610 million, compared with a net profit of 920 million in the same quarter last year. At Shinsegae Kasami, sales rose 40.5 percent to 67.8 billion won, but the company reported a net loss of 3.9 billion won, up from 85.7 percent a year earlier.

For the furniture and interior decoration industry, there is optimism for the second half.

“We expect earnings to improve with measures such as easing regulations on first-time homebuyer loans and deferring and suspending the transfer tax for people who own more than one real estate property,” a Hansem spokesman said. .

“By expanding our overall domestic distribution network and strengthening our overseas premium furniture lineup, we will return to profitability in the second half of the year,” said a Hyundai Livart Furniture spokesperson.

By Baek Il-hyun [lim.jeongwon@joongang.co.kr]