Eland shuts down SPAO store in Garosu-gil, beefs up online business
Eland's SPAO store in COEX, Seoul / Courtesy of Eland
By Kim Jae-heun
Local fashion firm Eland has recently closed down its signature fast-fashion brand store SPAO in Seoul's southern posh Garosu-gil area. The decision came after the number of customers visiting the shop decreased sharply affected by the COVID-19 pandemic.
Garosu-gil is referred to as a “ferocious battlefield” for many global fast fashion retailers such as H&M, Zara and Eight Seconds. Eland has reportedly shut down its five-story building there due to the high rental costs.
Eland had originally been contracted to use the building until February 2023, but it decided to move out early. The fashion company's shoe brand Shoopen, which had been located on the first and second floors of the same building, also withdrew from the store.
“Garosu-gil is a commercial district with a high proportion of foreign customers. But due to the COVID-19 outbreak, the number of international tourists dropped sharply and we have decided to cease operation of the store,” an Eland official said.
It took just three years from its launch in 2009 to reach annual sales figures of 100 billion won. By 2016 that figure rose to 300 billion won. However, 2020 saw minimal growth, reaching the 320 billion won mark.
Fast fashion brands make profit by selling low-priced items at high volumes. But because people are encouraged to stay home as part of quarantine measures, many felt it is unnecessary to purchase apparel ― particularly at stores.
To cope with the pandemic, Eland came up with a new strategy to focus on its online business.
The fashion company signed a memorandum of understanding with the country's largest online fashion mall Musinsa to run a campaign for millennials.
Eland plans to provide lifestyle curation through Eland Pay, an online and offline integrated service, starting in June. The system will analyze customers' bio information and shopping patterns to offer clothes that suit them. The service will be available for subscription as well.
Meanwhile, Eland has called off its decision to sell womenswear brands including MIXXO and Roem. The company conducted preliminary bidding to dispose of the brands last month but there was a disagreement over sale prices.
Eland's women's clothing did not sell well last year due to COVID-19. However, its sales have begun to rebound as people are going clothes shopping again as the government's restrictions loosen and people start getting used to the quarantine measures.
Eland said MIXXO's sales this month skyrocketed by 302 percent compared to March last year. Roem's sales also increased by 171 percent in the same period.
“There is no reason to sell the brands at a low price. We are going to focus on selling more women's clothes again,” an Eland official said.