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| Models pose with clothing at an LF Mall store in a department store in Seoul, on May 9, 2021. Korea Times file |
By Kim Jae-heun
Apparel makers and other fashion companies here are increasingly concerned that their sales will continue to remain in the doldrums due to the resurgence of COVID-19 infections and soaring inflation, according to industry officials, Wednesday.
According to market tracker FnGuide, the country's major fashion firms are expected to show solid business performance in the second quarter of the year, though the trend will likely not continue in the second half.
LF's sales and operating profit between April and June are predicted to reach 531.4 billion won ($404.5 million) and 59 billion won, respectively, up by 14 percent and 15.6 percent, quarter-on-quarter. Handsome's revenue and profit are expected to reach 350.4 billion won and 27.8 billion won, respectively, in the same period.
However, these two along with other companies are expected to see their sales and profits decline in the coming months. The daily number of new COVID-19 infections is surging at a rapid pace and the soaring cost of living is slowing down consumer spending. People are avoiding going out again and they are spending less money on fashion items in order to cope with the rising prices of food and energy.
In particular, the fall and winter seasons are important for fashion firms as they sell clothes at high unit prices during that period.
"So far, there is no significant change, but we can expect consumption activities to slow down ― affected by the growing number of new COVID-19 cases in the country and continually rising inflation," an LF official said. "We will reduce our inventory management risks by minimizing the size of our first batch and producing additional products in high demand."
Meanwhile, recent data released by the Bank of Korea showed that the consumer composite sentiment index (CCSI) has decreased 6.2 percent points from 102.6 in April to 96.4 in May.
It is the first time in a year and four months that the index has fallen below the baseline of 100. The CCSI is a comprehensive indicator of consumer sentiment towards economic conditions, and a figure lower than 100 points means that consumers are more pessimistic than the long-term average between 2003 and 2021.
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