The season for the field is approaching, but the frozen golf apparel market shows no signs of thawing. This is due to a decrease in the number of golfers, which had surged due to the impact of COVID-19. The industry is currently overcoming the crisis through brand withdrawals and business downsizing. Some companies have changed their names and ventured into new businesses.
◇Golf apparel dwindling in the post-COVID-19 era... Business scale reduction
According to the Financial Supervisory Service on the 6th, Creas F&C reported a sales amount of 331.3 billion won last year, which is a nearly 10% decrease compared to the previous year. During the same period, operating profit declined to 12.1 billion won, a reduction of about 74% compared to the previous year. The net profit also turned to a loss.
Creas F&C is selling golf apparel in South Korea under license agreements with overseas brands such as Paris Gates, Ping, and Saint Andrews. With a variety of brands for different price ranges and age groups, it initially rode the wave of increasing golfers, but from 2023, both sales and profits have been on a downward trend.
Kolon Industries FnC, which operates golf apparel brands such as J.Lindeberg, Wack, Jack Nicklaus, and L-Rod, recorded a sales amount of 1.212 trillion won last year, which is a 5% decrease compared to the previous year. Its operating profit plummeted by 64% to 16.4 billion won. This company operates various brands beyond golf apparel, including women's wear, men's wear, and accessories. However, due to the decrease in sales, it has decided to prioritize the clearance of outdated golf apparel.
Established in 1985, Jack Nicklaus will change its business structure by giving operational rights to third parties through a sub-license business. Additionally, L-Rod will transition to a brand specializing in golf clubs.
Castelbajac also saw a 16% decrease in sales to 20.9 billion won last year. The operating loss grew to 9.3 billion won, an increase from the previous year (1 billion won). This is largely due to the drop in golf apparel sales, which constitutes most of its performance.
The company plans to change its name to Hyungji Global at the shareholders' meeting on the 13th and add 'sports marketing and sports management' to its business objectives. It aims to expand into sports management and administration, starting with the promising KLPGA regular tour pro Lee Jung-min, with whom it signed a sports management contract at the end of last year.
HANSAE MK, which operates PGA Tour and LPGA golf apparel, reported a decrease in sales to 256.3 billion won last year, marking a 19% drop compared to the previous year. During the same period, the operating loss was 21.4 billion won, reduced by about 113%. The company cited the decline in sales from domestic and Chinese subsidiaries and increased cost of goods sold due to inventory valuation losses as causes. Due to poor performance, it has reportedly suspended player sponsorships for PGA Tour and LPGA golf apparel and is streamlining its operations by reducing stores.
In addition, Maison Kitsuné Golf from Samsung C&T's fashion division and Random Golf Club from LF withdrew from the market just a year after their launch.
◇Top brands see revenue decline... Growth momentum through outdoor and overseas expansion
The golf apparel market experienced a boom as a result of the COVID-19 pandemic in 2020. The number of golfers surged due to the perception that golf is a safe outdoor sport with a lower risk of respiratory disease transmission. The emergence of the neologism 'gollini,' referring to young people in their 20s and 30s who started golfing during this period, also occurred.
Naturally, apparel companies entered the golf apparel market by signing license agreements with famous overseas brands.
However, as endemicity and economic recessions coincided, the number of golfers decreased, putting golf apparel companies in crisis as well. Many shifted to running, which is less expensive than golf, leading to the rise of running shoe brands such as Asics and Hoka.
According to the report published last year, titled 'Current Status and Future Tasks of the Domestic Golf Industry,' the number of golf course users in South Korea, which had shown a steady increase since 2005, decreased for the first time in 2023. Consequently, demand related to golf also declined. According to the Korea Customs Service, the import amount of golf products in 2023 was $728.4 million (approximately 1.08 trillion won), a 17% sharp decrease compared to 2022. This trend continued into the previous year.
According to the industry, the total sales of the top 20 domestic golf apparel brands last year were 1.2435 trillion won, a 6.3% decrease compared to the previous year.
An industry insider noted, “Top brands such as J.Lindeberg, PXG Golf, and Titleist also saw double-digit declines in sales last year,” adding that “as transient golfers came and went, the bubble in the golf apparel market has burst, leaving only brands preferred by genuine golfers.”
The golf apparel industry is finding new growth momentum through new businesses and overseas expansion. Creas F&C, the top player in the domestic golf apparel market, is working to reduce its dependency on the golf business. To this end, it has secured exclusive distribution rights for international outdoor brands such as Italy's Hydrogen, Switzerland's Mammut, and Japan's Andwander in South Korea. Its goal is to grow into a comprehensive sportswear corporation with sales in the trillions within a few years.
KOLON FnC acquired master licenses for Japan and China from the headquarters of U.S. J.Lindeberg and is beginning its overseas market strategy. The company has previously experienced success by establishing KOLON Sports as a brand worth 750 billion won in China.
On the other hand, there are those who have adopted golf apparel as a new growth driver. GOLFZON, a screen golf company, recently launched 'GOLFZON Apparel.' This company saw its sales and operating profit decrease by 10% and 16%, respectively, last year. In response, it plans to leverage its platforms, such as GOLFZON Academy, to sell golf apparel to drive a rebound.