Boosting Clothing Companies

The clothing companies are anticipating good results prior to the first half`s settlement of the accounts.

The clothing industry told yesterday that the sales of the major clothing companies have shown the increase rate of the double digit from the same period of last year.

Especially, the companies who have been under the `work-out` or the court receivership such as the Shinwon and the Nasan are recovering quickly. Hence, the expectations for the early release from the `work-out` and the court receivership are also escalating.

▼ Break through the Recession

The Nasan under court receivership has made a big profit by lessening the distribution cost while increasing the material cost using the high-quality materials.

Paik Young-Bae, the president of the Nasan, told that ``as the operation results has improved, the foreign or domestic clothing companies has been interested in the purchase of the Nasan. We expect that the Nasan will get out of the court receivership with a new owner within 1-2 years``.

The Nasan`s total sales in the first half is estimated 104 billion won, up 18.2 percent, and its working profit amounts to 19.5 billion won, up 21 percent, compared to the first half of last year.

The Shinwon are expecting to finish the `work-out` earlier than the scheduled date of the end of next year because it took first place in the increase rate of the net profit (19,955 percent) of the first quarter of this year among the listed companies as of last December.

An official of the Shinwon told that ``the overseas subsidiaries in Indonesia, China, and Guatemala have played tremendous roles as an outpost of the exports and the strategy of `No sale` has had the effect of making the profit in the domestic sales``.

The operational results of the menswear companies, which are called the `barometer of the clothing market, also have bounced back. The LG Fashion increased its sales to 11 percent until May of this year from the same period of last year. And the Cheil Industries Inc. also recorded the increase of 10.5 percent in its sales.

An official of the LG Fashion told that ``The sales of the menswear has increased by the average of 5 percent as a result of improving the quality by inviting the technical counselor``.

▼ Has the consumer sentiment recovered?

The first half of last year was the point in time when the economy distinctly showed the recovering tendency. Hence, the clothing companies told that ``the consumer sentiment seems to perk up to some extent as the sales has increased over the first quarter of last year when the economy turned to the rising tendency``.

An official noted that ``the clothing consumption keeps increasing among the office workers in their 30s rather than 40s-50s. If the economic condition continues to revitalize around autumn, the increase of the sales is certainly expected``.

artemes@donga.com