Korean E-Land unites fast fashion units for China biz growth

South Korea’s major retailer E-Land Group has consolidated one of its fast fashion brand's operations at home and in China to accelerate growth in the world’s largest consumer market while planning to combine another low-end casual unit.

The group united the South Korean and Chinese operations of Spao, its specialty retailer of private label apparel (SPA), in January, according to the holding company E-Land World Ltd. on Sunday. The company is set to also integrate the operations of WHO.A.U, a low-cost brand, in the two countries.

“Spao’s competitiveness as a SPA has reached a global level,” said an E-Land Group official. “We aim to expand the business into the world after a test in China with great potential.”

POTENTIAL LISTING

E-Land World plans to apply its manufacturing and logistics systems in South Korea to the Chinese operations. The company currently makes products in 48 hours after planning and supplies them to key stores first. If the products are popular, it mass produces them within 12 hours at overseas production bases such as Vietnam and expands sales.

Spao, which operates 11 stores in China, is already growing so fast there that E-Land’s operating profit on the mainland surged by 460% in the first quarter from a year earlier.

“Its sales of the store at Qibao Vanke Mall in Shanghai, which sells the same products as those in South Korea, almost doubled in March on-year,” said an E-Land World official in Seoul.

With the strong growth, the group is expected to list apparel affiliates, including a fashion unit of E-Land World, investment banking industry sources said. E-Land World reported 12.2% growth in operating profit to 125.6 billion won ($94.3 million) last year with sales up 3.5% to 5 trillion won.

The group has only one listed company – E-World Co., a theme park operator in South Korea formerly known as Woobang Land.

STRONG PRESENCE IN CHINA

E-Land Group is considered a pioneer of the South Korean fashion industry that succeeded in China.

The group nurtured Teenie Weenie, a female fashion brand produced in South Korea, into the mainland’s top name in the sector. It sold the brand to China’s Jinhong Group at 877 billion won.

E-Land Group plans to use US sports footwear and apparel maker New Balance Athletics Inc., especially products for kids, to expand its business on the mainland as it has a business license of the brand in South Korea and China.

“New Balance Kids is a core brand in the Chinese market,” said a group official. “We aim to generate sales of 80 billion won this year and 150 billion won next year by targeting the Chinese kids’ fashion market.”

Write to Jiyoon Yang at yang@hankyung.com
 
Jongwoo Cheon edited this article.