Fashion firms target SPA brands

October 28, 2013
This is the inside of Bang Bang’s recently launched store in discount chain Homeplus in Seoul. The casual wear manufacturer known for its popular jeans has diversified the product range this year, which includes underwear, accessories and outdoor products. / Courtesy of Bang Bang

This is the inside of Bang Bang’s recently launched store in discount chain Homeplus in Seoul. The casual wear manufacturer known for its popular jeans has diversified the product range this year, which includes underwear, accessories and outdoor products. / Courtesy of Bang Bang

By Rachel Lee

The country’s major fashion companies are changing the operation of their existing brands as a way to compete with the world’s global SPA brands.

SPA (specialty retailer of private label apparel) brands are those that produce their own clothing, distribute and sell it exclusively. Names such as H&M, Zara and Uniqlo are classified as SPA brands. The economic slowdown has resulted in a decrease in the revenues of luxury brands, but SPA brands are enjoying a recent boom.

According to industry sources, local fashion giants like E-land Group have adopted the SPA brand operation method to their clothing brands and also introduced new business models in order to survive in the competitive market.

Korean retail conglomerate E-Land Group has launched their SPA fashion brands this year. They include women’s wear Roem, shoe brand Shoopen and outdoor label Lukken.

According to the company, a total of eight SPA brands have been introduced and each one aims to launch high-quality products at affordable prices to local consumers.

The company has also launched a new lifestyle shop called Butter, which is entering Seoul’s busy shopping areas ㅡ Myeongdong and the Hongik University area ㅡ next year.

The influx of global SPA brand stores has caused a shortage of suitable locations in the main retail areas, which have forced some brands to look at other areas for their expansion.

Casual wear manufacturer Bang Bang is one of the fashion manufacturers turned SPA. The company, known for its popular jeans, has diversified its product range, which includes underwear, accessories and outdoor products available at lower prices by about 10-20 percent.

According to the company, it launched in August a large-size store in retailer Homeplus, selling a wide range of products and plans to open more in the country’s major discount chains including Lotte Mart.

Apparel maker Branded Lifestyle Korea has revamped its casual wear brand H&T as an SPA brand re-named H:Connect. With a new brand name and identity, the company has steadily opened stores as well as a flagship store in the southern part of Seoul. It aims to launch a total of 20 stores nationwide by next year and place supervisors in every part of the country.

According to Cushman & Wakefield Korea, the market for SPA brands was worth 500 billion won in 2008, 800 billion won in 2009, and 1.2 trillion won in 2010.

Last year, SPA brands accounted for 6.4 percent or 1.9 trillion won out of the 29.5-trillion-won fashion market. Since 2008, the overall fashion industry market grew 3.9 percent steadily year on year, but SPA brands rose exponentially by 58 percent per year.

It is forecast that the SPA market will grow to be worth around 20 trillion won by 2015. This growth is driven by fast fashion becoming more popular and the increasing number of brands out there.

For example, more and more domestic SPA brands have made an entry since the first domestic brand opened about four years ago.

“Domestic SPA brands like Roem are trying harder these days to compete against international SPA brands by expanding their footprint and launching a variety of items,” said an analyst who declined to give their name.

“Unlike fashion giants Uniqlo and H&M, local brands have just entered the market, which means even if they see rapid growth in sales for now, they will have to build up their own marketing strategies in order to survive in the fiercely competitive market.”

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