Convenience store GS25 will launch a dedicated product, 'Musinsa Standard Express', next month in collaboration with the country's largest fashion platform, Musinsa. A total of 12 types of clothing, including underwear, socks, T-shirts, pants, jackets, and belts, are expected to be showcased at a Musinsa exclusive display within the convenience store.
It is not new for convenience stores to sell clothes. In the past, convenience stores have carried essential clothing items such as underwear, socks, and stockings to respond to business trips or unexpected overnight stays. However, this is the first time a separate brand has been created with a fashion specialty company to launch 'proper clothing.'
◇Japanese FamilyMart’s success with convenience store clothing, designer from Louis Vuitton also recruited
GS25 is not taking an unnecessary risk. There have been successful cases of selling clothes in Japan, often referred to as the 'convenience store kingdom.' A prime example is FamilyMart's introduction of 'convenience wear,' also known as convenience clothing, since 2021. Designed by Hiro Miyachi, a fashion designer who has participated in the Paris Collection, the clothing is manufactured using textiles supplied by Itochu Corporation, FamilyMart's parent company.
Initially starting with socks, handkerchiefs, and T-shirts, the company now sells over 50 items, including jackets and pants. The price of the representative products, sweatshirts and pants, is around 2,990 yen (approximately 26,932 won), which is cheaper than Uniqlo, Japan's leading clothing brand. They have also showcased clothing collaborations with Netflix content and the professional baseball team Yomiuri Giants.
In 2023, FamilyMart's clothing sales exceeded 10 billion yen (approximately 964 million won), growing 30% compared to the previous year. While it is small compared to the company's total sales (approximately 3 trillion yen), it is at a level comparable to mid-sized clothing brands. Last year's sales are estimated to have surpassed 100 billion won.
The representative product is a variety of colored socks, which sold a cumulative total of 22 million pairs from 2021 to October last year. Considering the price of about 4,000 won per pair, it can be estimated that they made 88 billion won just from socks.
Convenience wear is said to have transformed FamilyMart's market position. From June to November last year, the store sales of FamilyMart continuously increased for six months. The average monthly sales growth rate was 2.2%. In contrast, rival 7-Eleven experienced a four-month consecutive decline in store sales from June to September. The sales growth rate in October and November remained at 0.3%.
FamilyMart has taken a step further by recently recruiting NIGO, the founder of Human Made and artistic director of the luxury brand Kenzo, as a director. NIGO, a designer, DJ, and producer who leads street culture, has gained global recognition by presenting collaborative fashion shows with Pharrell Williams, the menswear director for Louis Vuitton. NIGO is expected to oversee store operations and strategic products at FamilyMart, as well as supervise marketing campaigns and develop next-generation marketing across various fields.
◇South Korea’s convenience store saturation… fashion and beauty as next growth alternatives
The reason why convenience stores, which used to sell cigarettes, lunch boxes, beverages, and alcohol, have entered the fashion business is due to slowing growth. This is the case in South Korea as well. The number of convenience stores in South Korea is over 55,800 as of 2023, surpassing Japan's 55,713. This means there is about one store for every 950 people, making it the highest density of convenience stores in the world.
Consequently, the profitability of convenience stores is gradually declining. BGF Retail, which operates CU, reported last year's revenue of 8.6988 trillion won, a 6.2% increase compared to the previous year. However, the operating profit dropped by 0.6% to 251.6 billion won. GS25, which competes for the top two spots in the industry alongside CU, also recorded a 5.1% increase in revenue to 8.6661 trillion won, while its operating profit fell by 10.9%, totaling 194.6 billion won.
The issue is that the saturation of store numbers and the likelihood of continued sluggishness due to consumer stagnation are high. As a result, the industry is preparing to establish new growth drivers by opening beauty and fashion specialty stores. Particularly, clothing is assessed as a purchase that induces 'purposeful buying' and has the advantage of pleasing customers with a sophisticated atmosphere. This context also applies to Daiso, a low-cost discount store that sells fashion products. Last year's sales of Daiso's fashion product line increased by 160% compared to the previous year.
However, the small store size is identified as an obstacle to selling fashion products. According to the Korea Convenience Store Association, the average area of convenience stores in South Korea is 72 square meters (about 22 pyeong), which is half the size of Japanese convenience stores.
An industry official noted, 'To increase the average spending per customer and attract new customers, there is a trend toward strengthening fashion and beauty products.' They expressed hope that 'the atmosphere of shopping for clothes could be created, similar to buying premium alcohol like wine at a convenience store.'