Hats, glasses, bags... accessories are emerging as the success formula for K-fashion.
According to the fashion industry on the 19th, iAi Combine, which operates Gentle Monster, plans to open a new hat brand store called "ATIISU" in Sinsa-dong, Gangnam-gu, Seoul, on the 21st. It appears to have chosen hats as a new business after glasses (Gentle Monster), beauty (Tamburins), and desserts (Nudake).
ATIISU will feature a unique worldview and design, similar to iAi Combine's existing brands. It suggests details such as adding wings to the back of the hats or styling that makes it seem like one is wearing pantyhose on their head. Just as Gentle Monster gained recognition by featuring BLACKPINK's Jennie as a model, Stray Kids' Felix has garnered buzz before the launch by wearing ATIISU. The company plans to use the term "headwear" instead of hats to attempt a concept shift in the category.
Last year, iAi Combine's consolidated revenue was 789.1 billion won, a 30% increase compared to the previous year, and its operating profit surged 55% to 233.8 billion won. The operating profit margin reached an impressive 30%. Many in the industry view that the company's unique marketing has positioned its brand as a premium brand by targeting accessory product categories that do not depend on seasons, body types, or sizes, rather than clothing.
Last year, the company's consolidated cost of goods sold was 123.7 billion won, resulting in a cost of goods sold rate of only 16%. Considering that at the same time, the cost of goods sold rates for major fashion corporations Handsome and Shinsegae International were 43% and 38%, respectively, this is significantly low. These corporations mainly operate premium clothing brands.
A source in the fashion industry noted, "The reason Gentle Monster continued to grow despite the recession affecting fashion corporations' performance is due to its accessory-focused product portfolio," adding, "While clothing is sensitive to seasons, trends, and body types, accessories are favorable for global expansion and have a lower inventory burden."
The newly launched hat business is also considered a lucrative venture. EMIS, a fashion brand that showed remarkable growth last year, is a success story. EMIS, which primarily operates logo hats and bags, recorded sales of 86.3 billion won last year, a 155% increase compared to the previous year, with operating profit rising by 194% to 42.9 billion won. It means that half of the sales resulted in profit. The company has recently expanded into Japan, Hong Kong, Bangkok, and Macau.
F&F's MLB, which has annual sales exceeding 1 trillion won, is also a case of starting with hats and expanding its business to clothing. Until 2018, the proportion of hat sales was over 60%, but thereafter it expanded its focus to clothing, shoes, and bags. Approximately 40% of MLB's sales come from overseas markets such as China. Recently, MATTE KIM, which has emerged as a leader in K-fashion, is also known to have accessories like bags, wallets, and hats making up about half of its total products.