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The author is an analyst at NH Investments and Securities. She can be reached at jiyoony@nhqv.com. — Ed.
Domestic apparel retail sales rose 13 percent in July. Apparel growth in department store channels averaged +39% yy per hour, driven by the summer holiday and regular sales season.
Domestic fashion sales are trending upward so far in 3Q22.
July 2022 sales results show 13% year-over-year growth in domestic apparel retail sales. Sales in department stores, the main channel in the fashion category, grew 39% yy. And, online sales increased by 11% y-o-y, showing a higher growth rate than in 2Q22, when the industry as a whole posted good results.
We primarily attribute this strong sales growth in July to both brisk swimwear and luggage sales during the summer break and regular sales in our three major store groups. Despite the heavy monsoon season, healthy top-line growth is likely to continue in August with strong demand, aided by relatively low freight, department store renovations, pop-up shop events and brand collaboration product launches. Based on September autumn/winter sales forecasts, 3Q22 earnings for the sector should be high.
Domestic apparel retail sales rose 13 percent in July.
Domestic apparel retail sales grew by 13% yy in July, which was faster than the average growth rate seen in 2Q22 (+10% yy). Department stores (+39% yy), hypermarkets (+12% yy) and online retailers (+11% yy) all recorded double-digit sales growth, with all channels performing well.
In department store channels, fashion category sales increased an average of 39% yy, such as womenswear (+38% yy), womens casual (+41% yy), menswear (+38% yy), kids/sports (+48% yy). , and major overseas brands (+29% yy). This is a higher growth rate compared to the average apparel growth rate seen in 2Q22 (+23% yy).
Among online channels, fashion category sales grew 11% y. Total domestic online growth in July was +9% yy, falling into single digits for the first time this year. This slowdown is attributed to an increase in overall consumption towards offline channels in line with outdoor activities and summer vacations. However, among consumer goods, fashion categories (clothing+shoes+bags+accessories+sports) showed strong growth rates excluding services.
While the number of domestic and international visitors to DFS increased 111% yy in July, dollar value sales through DFS channels fell 17% y, while foreign sales declined 23% yy. In particular, overseas sales at DFSs in the city, with Daigos accounting for the largest share of sales, slipped 23% y, continuing to decline following 2Q22.
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