Hanssem, a fashion specialist company under the Hyundai Department Store Group, is undertaking structural improvements by pursuing a two-track strategy that involves expanding its own brands overseas and broadening its imported brand business. By reducing inventory burdens and diversifying its portfolio to target consumers both domestically and internationally, while also introducing shareholder return policies, expectations in the securities market have grown.
According to industry sources on the 14th, Hanssem has recently been raising its recognition in Europe by leading with TIME and SYSTEM. TIME participated in Paris Fashion Week this year, establishing its presence in the global fashion market. SYSTEM is expanding its overseas distribution network by entering the Galerie Lafayette department store in Paris, France, and operating a pop-up store at Harrods department store in London, UK. The company also plans to push for expansion into Asia next year.
The business of bringing overseas brands into Korea will also be expanded. This is aimed at diversifying product composition by discovering brands that have built recognition abroad and introducing them domestically. Recently, the company signed an exclusive distribution contract in Korea with SKIMS, an underwear brand co-founded by American influencer Kim Kardashian, and is pushing to expand offline stores. In addition, it plans to bring three more overseas brands into Korea within this year. Since 2022, Hanssem has introduced 12 overseas fashion brands to the domestic market, and their combined sales through August of this year increased by approximately 50% compared to the same period last year.
The offline distribution network for overseas brands will also be expanded. The goal is to increase the number of overseas brand stores from the current approximately 60 to 90 by the end of next year. SKIMS is also scheduled to open a flagship store near Dosan Park in Gangnam-gu, Seoul, in the first half of next year.
Efforts are being made to strengthen inventory management as well. Inventory assets were reduced by approximately 8% compared to the same period last year in the first half of this year. The company judges that reducing inventory burdens and expanding sales at regular prices can improve profitability by lowering reliance on discounted sales.
The recovery in sales of high-priced FW (Fall/Winter) clothing is also a positive factor. The securities market expects that Hanssem's sales in September recovered to double-digit growth compared to the same period last year, and that third-quarter performance will improve compared to the previous year.
Hanssem recently introduced a medium- to long-term shareholder return policy. It decided to raise the dividend funding criterion from 15% or more of standalone operating profit to 20% or more, and increase the minimum dividend per share from 750 won to 800 won. In addition, it plans to purchase and fully cancel 10 billion won worth of treasury shares each year.
With expectations for improved performance due to the recovery in the fashion industry in the second half overlapping with the shareholder return policy, Hanssem's stock price is on a recovery trend. According to the Korea Exchange, Hanssem's stock price rose from 15,890 won on the 17th of last month to 19,960 won on the 22nd, increasing by 25.6% in three trading days. It continued to rise slightly thereafter, closing at 21,300 won on the 8th of this month. This represents a 34% increase in three weeks.
The securities market has raised target prices to reflect expanded shareholder returns and potential performance improvements. Youn Jung-hyun, a researcher at Daishin Securities, evaluated it as "efforts to break away from chronic undervaluation despite good performance and to build market trust as a shareholder-friendly company." Jeong Ji-yoon, an analyst at NH Investment & Securities, explained, "Sales in September, when the FW season is fully underway, have recovered to double-digit growth rates, and total profit margin improvement is expected due to inventory reduction in the first half," adding, "A stock price rebound is expected due to the upward revision of three-year shareholder return targets and share buybacks."
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