SEOUL, South Korea, April 9, 2024 /PRNewswire/ -- MUSINSA achieved a growth rate of over 40% in annual sales compared to the previous year, based on a steady growth trajectory in both online and offline fashion markets. Despite a somewhat sluggish domestic fashion market in the latter half of 2023, MUSINSA recorded a significant annual sales growth, reaching nearly US$ 733 million. Building on a recent organizational restructuring, MUSINSA aims to establish a stable foundation for revenue generation and growth for the current year.
MUSINSA's annual sales growth graph
Following the completion of external audits for the fiscal year 2023, MUSINSA's separate sales figure amounted to approximately US$ 651.8 million, marking a growth of 36.9% compared to the previous year. Despite challenging market conditions both domestically and internationally, with the online fashion market growing by 4.45% according to National Statistical Office, MUSINSA demonstrated remarkable growth. Within MUSINSA's separate financials are performances from its online platforms like MUSINSA and 29CM, along with outcomes from global business operations and its in-house brand (PB), 'musinsa standard'.
MUSINSA's separate operating profit amounted to approximately US$ 27.4 million, showing a 40% decrease compared to the previous year. However, this decline was largely due to the cost calculation related to RSUs (Restricted Stock Units) granted to employees earlier this year, with compensation expenses increasing by 50.2% to approximately US$ 25.8 million in 2023 compared to the previous year. Despite the significant increase in stock compensation expenses for employees, it is one-time expenditures and expected to decrease significantly starting this year.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), a key indicator of cash generation capability, amounted to US$ 76.9 million fo FY23 on a separate basis. MUSINSA's separate EBITDA margin remains robust at 12%, steadily generating profits while continuing to grow. Moreover, after recording a net loss of approximately 4.9 million US$ in 2022, MUSINSA successfully achieved a net profit of approximately 26.2 million US$ last year.
Looking at MUSINSA and its subsidiaries on a consolidated basis, sales for 2023 reached approximately 732.9 million US$, marking an increase of about 40.2% compared to the previous year, nearly reaching the US$ 733 million mark. On a consolidated basis, EBITDA also increased by 15.9% from 53.4 million US$ in 2022 to 61.9 million US$ in 2023.
Last year, MUSINSA recorded an operating deficit of approximately 6.3 million US$, attributed to increased operating expenses such as one-time stock compensation expenses totaling 30.5 million US$ paid to MUSINSA headquarters and affiliate employees, as well as increased salary costs due to workforce expansion, and rising payment commissions associated with expanded transaction volumes. In particular, SLDT, a subsidiary operating the limited edition platform 'soldout', reduced its operating loss from over 30.9 million US$ in 2022 to 20.7 million US$ last year.
MUSINSA plans to pursue cost-effective growth through systematic planning in various areas, including brand businesses strategically nurtured as new ventures, offline expansion, global expansion, and the limited edition platform 'soldout'. Additionally, with cash and cash equivalents totaling approximately 309.9 million US$ at the end of 2023, more than double the previous year's figure, MUSINSA plans to explore strategic measures that can lead to long-term growth and revenue generation.
A MUSINSA official stated, "Despite the rapidly changing fashion market, MUSINSA has maintained steady growth, recording an average annual sales growth rate of over 40% over the past three years," adding, "This year, after establishing a stable foundation in core business areas such as MUSINSA, 29CM, musinsa standard, and global operations, we will lead sustainable growth and revenue."
