Samsung’s fashion unit logs record profit again in 2023

Samsung Group’s fashion unit posted record profit and revenue for the second straight year in 2023. The fashion division, which logged deficits in 2015 and 2016, has restructured its business, introduced new brands targeting young customers and strengthened e-commerce sales since 2018 to improve earnings.

Samsung C&T Corp., Samsung Group’s construction and trading arm, said on Wednesday its fashion unit achieved record highs of 194 billion won ($145.6 million) profit and 2.05 trillion won revenue last year, respectively, up 7.8% and 2.5% on-year.

The fashion unit had operating losses for two years from 2015 due to slow sales of 8seconds, Samsung’s own fast fashion brand launched in 2012. The fashion unit’s annual revenue stayed at the 1.7 trillion won level for five consecutive years from 2017.

Samsung has focused on restructuring its fashion business since 2017 for operational efficiency. Its menswear Mvio label and handbag brand Ravenova withdrew in 2017; Mvio came back in 2019 only for e-commerce sales.

In 2018, Samsung shut down all offline stores of 8seconds in China. In 2022, the company closed the textile fabric business, which had accumulated 8 billion won losses for four years from 2018 – the closure came as a surprise as the textile business founded Samsung C&T in 1956.

BRANDS TARGETING YOUNG CONSUMERS

Fashion unit head Lee Joon-seo, who took the helm in 2021, has led a turnaround by introducing global brands like Ami, Maison Kitsuné and Lemaire to attract young customers and by strengthening sales of its own brands Beanpole and Kuho.  

As the fashion industry revived with the pandemic on a downward trend, Samsung’s fashion division posted more than 2 trillion won in revenue for the first time in 2022.

Fast fashion brand 8seconds continued to expand its sales to post 300 billion won revenue last year, targeting young consumers seeking trendy clothing at low prices.

As it cut the fashion business’ dependence on offline stores, the sales via SSF shop, Samsung C&T’s official online shopping store, increased to 20% of the fashion unit’s entire revenue.

Meanwhile, Samsung C&T on Wednesday posted 2.87 trillion won in operating profit for 2023, up 13.5% on-year. Its revenue fell 2.9% on-year to 41.9 trillion won. The company’s construction business logged a 134 billion won profit, up 18.2% on-year, and 19.31 trillion won in revenue, up 32.3%.

Write to Sul-Li Jun and Jeong-Soo Hwang at sljun@hankyung.com

Jihyun Kim edited this article.