More and more South Korean firms are leaving Japan due to business difficulties caused by the protracted weak yen.
Fashion and retail conglomerate E-land said Monday it pulled its fast fashion brands SPAO and Mixxo from Japan in the past few months. The measure comes less than two years since the company launched both brands.
“If fast fashion brands are price competitive, it’s difficult to survive. It must have been inevitable to close down operations due to the weaker yen leading to sales drop,” an industry watcher said, wishing to stay anonymous.
The Seoul-based fashion company, which runs about 150 brands and 10,000 stores globally, aggressively entered the Japanese market in 2013 by partnering with Japanese retail group Seven & I Holdings.
Vowing to compete against Spanish brand Zara, Japan’s Uniqlo and Sweden’s H&M, E-land initially aimed to open 20 to 30 stores by 2015 and rake in 20 billion yen ($165.4 million) in sales.
But the won-yen exchange rate recently dropped to the 900 won mark from 1,200 won in early 2013, largely affecting the company’s sales.
E-land officials downplayed the view, claiming that leaving Japan is part of its bigger plan to expand the growing Chinese market.
“We’re not permanently pulling out from Japan,” an E-land spokesman said.
E-land is the latest Korean company to have given up its business in Japan.
In November, Korean cosmetics giant AmorePacific pulled its namesake flagship brand from the Japanese market due to shrinking profits over the weakening yen.
The firm shut down operations of its eponymous brand at four locations in Japan last year. The company said it will now focus on low-cost makeup affiliates Etude House and IOPE.
