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Korea Herald
21 hours ago
- Business
- Korea Herald
Fashion powerhouse Musinsa gears up for stock market debut
Musinsa, South Korea's largest online fashion platform, has taken a step closer to a potential initial public offering by initiating the search for lead underwriters, a move the company frames as key to fueling its next phase of growth. According to the retailer Wednesday, it began distributing requests for proposals to multiple financial institutions the previous day to advance discussions on its long-anticipated stock market debut. 'An initial public offering is one of the key strategic options under consideration to support sustainable growth and global expansion,' a company official said. While speculation about the online fashion giant's public debut has circulated for years, the concrete discussion started to materialize in June when CEO Park Joon-mo publicly underscored the strategic value of a stock market listing during a corporate presentation. 'Our global business began in earnest in 2022, and we require strategic investment to support offline expansion and logistics infrastructure,' Park said. 'We see an IPO as one of the key financing tools essential to driving this global growth.' He added that the company is carefully assessing the timing and conditions for the IPO, noting that 'the timing and funding costs are critical factors in going public.' Market estimates place the company's valuation as high as 10 trillion won ($7.2 billion), nearly triple the 3.5 trillion won it achieved during its Series C funding round in 2023. If the IPO moves forward, industry insiders say it could serve as a bellwether for the nation's fashion sector. Founded in 2001 as a sneaker enthusiast community, Musinsa has evolved into a leading force in fashion e-commerce, while steadily expanding its offline presence through its private-label brand, Musinsa Standard, and actively extending its global footprint. After establishing a Japanese unit in 2021, Musinsa launched a Chinese subsidiary earlier this year and plans to open its first curated store in Tokyo next year. An offline multi-brand store in Shanghai is also in the pipeline, with further expansion under review in Singapore, Thailand and other international markets. These offline initiatives complement Musinsa's global online store, which currently operates in 13 countries, including Japan, Australia and the United States. Through this combined strategy, the company aims to achieve 3 trillion won in global annual gross merchandise volume by 2030. Musinsa's financial performance has reflected its upward trajectory. In the first quarter of this year, revenue rose 12.6 percent on-year to 292.9 billion won, while operating profit increased 17.6 percent to 17.6 billion won. minmin@ No Kyung-min Subscribe +
Korea Herald
25-03-2025
- Business
- Korea Herald
How Musinsa Standard challenges Uniqlo with Gen Z shoppers
In-store sales from foreign tourists in Seoul's main shopping hubs boom Musinsa, South Korea's largest online fashion platform, has long been a behind-the-scenes tastemaker, setting the tone of the country's youth fashion scene. Yet, what has given the company sharper definition over the years can be chalked up to its private label, Musinsa Standard. Now squaring off against global fast-fashion giants on its own home turf in Korea, Musinsa Standard has asserted itself as a force to be reckoned with. The brand outfitted Team Korea in sleek cerulean blue ceremonial uniforms at the 2024 Paris Olympics. Brought to life as Musinsa's private label in 2017, Musinsa Standard began as an online-based brand delivering affordable basics. In 2021, Musinsa Standard shed its online-only identity, establishing its first brick-and-mortar store in Seoul's youth-centric district of Hongdae. From there, Musinsa Standard rode a wave of store openings in three of Seoul's districts for shopping, including Myeong-dong, Seongsu-dong and Hannam-dong. The pace didn't let up, with 14 more stores added just last year. As of March, the brand operates 23 stores nationwide, extending beyond Seoul to Gyeonggi Province, as well as Busan and Daegu. It kicked off the year with a fresh launch in Ulsan in February, with the momentum continuing into the capital through three additional openings in March. "With a balance of reasonable pricing and high-quality products, Musinsa Standard will continue its offline expansion, sharpening brand recognition through strategic footholds in key commercial districts,' a Musinsa official said. The brand's reach extends beyond its own stores, with essentials now available at GS25 convenience stores nationwide. With just 23 stores to its name, Musinsa Standard is still dwarfed by global heavyweights like Uniqlo, which ran 132 locations in Korea as of December. But sheer numbers don't tell the whole story, in particular among younger generations. In a survey conducted last October by Open Survey, which polled 800 Korean nationals aged 19 to 29 about which fast-fashion chains they had ever purchased from, Musinsa Standard topped the list at 48.1 percent, ahead of global chains like Uniqlo (42 percent) and Zara (36 percent). Its swift trend-chasing agility, combined with affordability and the platform's extensive reach, has helped catapult the brand's popularity to new heights, according to industry insiders. In-store sales from tourists boom With international clientele tallying up from a total of 136 nations as of last year, foreign purchasing power is now driving a substantial share of in-store revenue in Korea. Last year, combined foreign customer sales at its three Musinsa Select shops and 19 Musinsa Standard stores skyrocketed past 20 billion won ($13.6 million), a sixfold jump from the previous year. Over 70 percent of foreign customer purchases come from flagship stores in Myeong-dong, Seongsu-dong, Hannam-dong and Hongdae -- renowned as some of the capital's main hubs for shopping and trends. According to the company, nearly half of the Myeong-dong store's customers are from abroad. In line with the trend, Musinsa is doubling down on its global playbook, planning to roll out tax refund services and multilingual in-store assistance to enhance the customer experience, the company said. Notwithstanding Musinsa's online reach spanning 13 countries, the prospect of Musinsa Standard establishing physical stores overseas remains speculative at best. 'We haven't outlined a concrete plan yet, but we're viewing the possibility through an optimistic lens,' the company official noted. Future bright but uncertain Musinsa's annual consolidated sales in 2023 soared by around 40 percent on-year to 993.1 billion, with industry estimates suggesting that the company's revenue in 2024 would surpass the 1-trillion-won mark to reach over 1.2 trillion won. In comparison, Uniqlo posted a 15 percent year-on-year surge to 1.06 trillion won in annual sales for fiscal 2024 in Korea. While the company hasn't disclosed last year's sales figures for Musinsa Standard alone, estimates suggest it had already surpassed 200 billion won in 2023, based on the performance of its in-house products. From January to October last year, the private label's cumulative store sales surged more than 3.5 times compared to the same period the previous year, according to the company. In October alone, offline sales hit a record high of 12 billion won in monthly revenue. However, Musinsa reported a decline in profitability, with its operating profit of 11.3 billion won in 2022 sliding to an operating loss of 8.6 billion won in 2023 -- a setback the company attributes to strategic investments, including scaling up its private label brand. Industry insiders note that Musinsa Standard's future moving forward, while bright, is not certain, however. 'When Musinsa as a platform faces public backlash, its private label could serve as the much-needed growth engine,' said one industry official, referring to past scandals surrounding Musinsa, including recent quality control issues involving down jackets sold on its platform. But doubts persist, the official said, about whether Musinsa Standard's appeal can withstand the test of global markets. 'While Musinsa Standard's upward trajectory remains undeniable, the real challenge will be navigating international markets dominated by powerhouses like Uniqlo and Zara, once the domestic industry reaches saturation," the official added.
