Musinsa, which is pursuing an initial public offering (IPO), is accelerating the expansion of its platform, offline, and global businesses, growing into a leading K-fashion company. Following last year's performance, the company set a new record high in the first quarter of this year, raising expectations for an IPO targeting a 10 trillion won corporate valuation.
Musinsa's first-quarter revenue on a consolidated basis came in at 363.6 billion won, up 24.1% from a year earlier. Operating profit during the same period rose 8.2% to 19 billion won. The company said it improved profitability through stable supply chain management despite pressures from soaring raw material costs and rising logistics expenses caused by global geopolitical risks. By segment, platform distribution commissions accounted for the largest share of revenue at 40.3%. Product sales from private brands (PB) such as 'Musinsa Standard' represented 32.4%, while direct purchase and exclusive distribution merchandise accounted for 22.5%.
A Rare Business Model in the Fashion Industry
Founded in the early 2000s as an online fashion community, Musinsa has built a distinctive business model rarely seen in the Korean fashion industry, encompassing brand incubation, distribution, and private label businesses. Along the way, the company has undergone several strategic mergers and acquisitions (M&As) and business restructurings. In 2021, it acquired the fashion information community 'StyleShare' and the fashion and lifestyle platform '29CM' for 300 billion won, and last year merged with the sneaker resale platform 'Soldout.' Last month, it absorbed 'Musinsa Trading,' a brand business subsidiary that has distributed overseas brands such as JanSport and Dickies, strengthening synergy between its platform and brand businesses.
Musinsa's core growth axis is its platform division. The company is focusing on building the competitiveness of five platforms: Musinsa, 29CM, Soldout, Empty, and its global store. Musinsa is expanding into the beauty category, while 29CM is broadening into beauty, kids, and home lifestyle categories. Its strategy of strengthening expertise by segment is also evident offline. This year, the company introduced specialized stores such as Musinsa Kicks, Run, and Back & Cap Club, and is steadily expanding offline stores including 29CM's 29Kids and 29Home, as well as luxury select shop Empty.
Private Label Strategy Becomes a Cash Cow
The PB segment has also been growing rapidly. Musinsa Standard, which features basic items at reasonable prices, recorded sales of 450 billion won last year, up 33% from the previous year, emerging as a key cash cow. Musinsa Standard's offline stores grew from just two locations in Hongdae and Gangnam at the end of 2022 to about 30 last year, with the company aiming to surpass 50 stores this year.
A significant number of new stores reached break-even point (BEP) within a year, demonstrating cost efficiency, according to industry assessments. From January to March this year, total offline sales of Musinsa Standard rose about 86% from a year earlier, while the number of customers visiting stores nationwide during the same period reached approximately 9.23 million, up around 98% from a year earlier. In addition, Musinsa's own beauty private labels 'Wijji' and 'Oddtype' are also expanding their global distribution networks centered on Japan and Southeast Asia, raising their profile.
Beyond Domestic Market to Global Expansion
The global business, with exports accounting for about 4% of total revenue, is still in its early stages but is drawing attention as a key variable that will shape the company's future valuation. The 'Musinsa Global Store,' an online mall for overseas customers launched in 2022, is operating in 13 countries including Japan, the United States, and Thailand. Transaction volume has grown an average of three times annually since its launch. First-quarter transaction volume this year also rose more than 48% from a year earlier, while export sales surged about 11.9-fold to 15.3 billion won from a year earlier. "We will accelerate the expansion of our overseas business by applying the online-to-offline (O4O) strategy we built domestically to overseas markets," a Musinsa official said.
Indeed, the number of overseas offline stores is rapidly increasing. After establishing a joint venture with China's largest sportswear company Anta Sports last year, Musinsa opened its first local store in Shanghai, China, in December of the same year, and has since expanded to five stores in China. The company plans to grow its Chinese stores to 100 by 2030. In Japan, it has operated a total of five pop-up stores since 2023, attracting approximately 140,000 cumulative visitors. Next year, it plans to open its first standalone Musinsa store in Japan. In addition, based on the Japanese distribution partnership signed with Matin Kim in 2024, Musinsa opened Matin Kim's first flagship store in Tokyo's Harajuku last month.
Musinsa is expected to file for preliminary review for a KOSPI listing as early as August. "As Musinsa is creating an unparalleled growth story in the Korean fashion industry, it is considered one of the most anticipated names in this year's IPO market," an industry official said. "The challenge is to prove the global scalability and stable profit-generating structure that can justify a high valuation of around 10 trillion won."
