The author is an analyst with NH Investment & Securities. She can be reached at jiyoony@nhqv.com. — Ed.
Domestic sales of retail clothing rose 13% year over year in July. Apparel growth in department store channels averaged +39% year over year, driven by the summer holiday season and regular sales season.
Domestic fashion sales have been on an upward trend so far in 3Q22
Sales results for July 2022 show a 13% year-over-year increase in domestic apparel retail sales. Sales at department stores, a key channel in the fashion category, expanded 39% year over year. And, online sales rose 11% year over year, showing a higher growth rate than the second quarter of 2012, when the industry as a whole posted good results.
We attribute this strong sales growth in July primarily to both the brisk sales of swimwear and luggage during the summer holiday season, as well as the regular sales season in the three main store groups. Despite a heavy rainy season, healthy top line growth is likely to hold in August with strong demand, helped by relatively low baseload, store renovations, pop-up store events and product launches. brand collaboration. Based on September/Winter sales forecasts, 3Q22 revenues for the sector should be substantial.
Domestic sales of retail clothing rose 13% year over year in July
Domestic retail apparel sales rose 13% yoy in July, outpacing the average first-quarter growth rate of 22 (+10% yoy). Supermarkets (+39% yy), hypermarkets (+12% yy) and online retailers (+11% yy) all posted double-digit sales growth, with all channels performing well.
In department store channels, fashion category sales grew an average of 39% yy, split into women’s suits (+38% yy), women’s casual (+41% yy), menswear (+38 % yy), kids/sports (+48 % yy), and major overseas brands (+29% yy). This is a significant growth rate even compared to the average growth rate for apparel witnessed in 2Q22 (+23% yy).
Among online channels, sales of the fashion category expanded by 11% year-over-year. The overall online domestic growth rate in July was +9% yoy, falling into single digits for the first time this year. We attribute this slowdown to the fact that overall consumption has shifted to offline channels in line with increased outdoor activities and the summer holiday season. However, fashion categories (clothing+shoes+bags+goods+sports) among consumer goods excluding services showed solid growth rates.
Although the number of domestic and foreign visitors to DFS increased by 111% yoy in July, dollar sales at DFS channels fell by 17% yoy, offset by a 23% yy decline in foreign sales. In particular, foreign sales at DFS within the city, where daigous account for a high share of sales, fell 23% year-on-year, continuing their decline after 2Q22.
