MUSINSA’s sales continue toskyrocket amidst rapidly changing market conditions, achieving 50% or moregrowth compared to the previous year.
MUSINSA reached 645.2 billionwon in sales, which is approximately a 60% increase year-over-year based on the2022 separate financial statement. As a result of expanding online and offlinemarketing activities, starting with MUJINJANG SALE, the large-scale marketingpromotion, MUSINSA gained female store users and new customers between the ageof 25 and 35, which has led to an increase in the profits of the brands on theplatform.
Another factor that accountedfor the growth in sales is that the increase in demand for products andservices in specific categories, such as luxury goods, beauty, golf, sports,and kids, attracted new customers to the platform. 29CM, whose grossmerchandise volume (GMV) increased by almost 80% YoY in 2022, played asignificant role as well.
The annual sales in theconsolidated statement of financial position records 708.3 billion won, up by54% YoY. The figure takes into account the performance of MUSINSA’ssubsidiaries, MUSINSA TRADING that launched a select shop called EMPTY lastyear and SLDT that runs Soldout, a platform for limited edition goods. Soldoutcontinuously focused on advancing its services, which has led to a 275%increase in the gross merchandise volume compared to 2021.
MUSINSA has continuously madeinvestment in 29CM and MUSINSA STORE, which successfully entered the verticalmarket, to maintain the robust growth momentum. Four specialized stores openedin last year only. Offline stores, such as MUSINSA TERRACE, MUSINSA STUDIO,29CM SEONGSU, and 29CM GALLARY, started business mainly in Seongsu and Hannamto support the offline marketing activities of partner brands as the economyreopened from the lockdown. On top of that, MUSINSA launched LAZY NIGHT, whichis an inspirational fashion and lifestyle platform for women.
In particular, MUSINSA openedits global store and started offering services on the website and applicationin 13 countries, including Japan, USA, Singapore and Thailand, in September2022, the year of taking a global leap. MUSINSA went through a large-scalehiring process in various areas of expertise, such as global businessdevelopment, marketing, service planning and engineering, to facilitate Koreanbrands to go global successfully. In April of this year, MUSINSA will start toactively target overseas market, starting from Japan.
The operating profit in theseparate financial statement decreased to 53.9 billion won YoY due to theaggressive preemptive investment made last year, including the initial costsfor establishing new services, such as the global store, LAZY NIGHT,specialized stores, etc. In addition, about 26.8 billion won worth ofstock-based compensation expense, including Founder Cho Man Ho gifting hisstocks to employees, had a significant one-time effect.
As for the non-operatingexpenses, about 21.4 billion won was recognized as financial expenses afterevaluating the fair value of the loss on the valuation of derivativeinstruments for RCPSs, which has caused a net loss. It reflects the impairmentloss of goodwill (15.6 billion) and the discontinued operation loss (9.3billion) following the discontinuation of services on StyleShare, which wasacquired by MUSINSA STORE last year to adjust to the rapid changes in themarket environment through efficient business management. The operating profitin the consolidated financial statement was 3.2 billion won, affected by theloss in a subsidiary (SLDT).
“MUSINSA did not shy away from investing in new projectsin 2022 to keep the strong growth momentum going,” MUSINSA said, and added that“this year, new projects will be expanded from last year, while strengtheningthe strategy to invest in brands in and outside of Korea to secure stablerevenue streams. We will also utilize our capacities to boost offline marketingactivities for partner brands.”