1. What’s Happening at SG Global?
SG Global’s H1 2025 report officially announced declining sales and deteriorating profitability. The slump in the fashion business is particularly severe, and difficulties in inventory management are adding to the burden on the company’s fundamentals.
2. Why is This Happening?
- Fashion Business Slump: The continued decline across the fashion business, including the ‘COLOMBO’ brand, stems from a failure to adequately respond to changing luxury consumption trends among Gen Z and intensified competition.
- Inventory Management Difficulties: Increasing inventory levels worsen cash flow and increase the likelihood of further losses in the future.
- External Environment Factors: The weakening Euro could negatively impact export competitiveness, while US interest rate volatility adds uncertainty to investment activities.
3. So, What’s Next?
In the short term, there is a high possibility of increased stock price volatility. However, there are also positive aspects. Solid performance in the apparel export sector, securing non-operating income through financial asset investments, and the decline in international oil prices and shipping rates can contribute to future performance improvement.
4. What Should Investors Do?
- Turnaround Strategy for the Fashion Business: Pay attention to new branding strategies targeting Gen Z or efforts to strengthen the competitiveness of existing brands.
- Improvement in Inventory Management Efficiency: Check for concrete plans and execution of inventory reduction and turnover rate improvement.
- Response to External Environment Changes: Examine risk management strategies for exchange rate and interest rate volatility.