Korean Popular Culture

The Textbook-in-progress of the Ivy League's first class on the Korean Wave. This blog is the work of University of Pennsylvania EALC 198/598 students (Spring 2006 & 2007). Please apply proper citation when using any part of this blog. For details on citing this site see: http://www.bedfordstmartins.com/online/cite5.html#1

Thursday, February 09, 2006

Hip-Hop, a la Bibimbap

Hip-Hop, a la Bibimbap
Forbes
Susan Kitchens
02.13.06

Brothers from South Korea make an unlikely splash in American Urbanwear.

It's late on a winter afternoon at the New York City showroom of
Southpole, a hip-hop clothing line, and the place is abuzz with
buyers from Macy's, the most familiar name in American fashion
retailing. Everyone is checking out next year's line--black bomber
jackets, frilly denim skirts, hot-pink hooded jackets--while company
cofounder Kenny Khym gets a quick update in his native Korean.
Switching back to English, he says, "Southpole is launching something
new today, and I think it's gonna be great."

That "something new" is a brand extension for Southpole, masterminded
by Kenny's older brother, David, who owns the company. It's the
latest twist in expansion for the two Korean-American brothers, an
unlikely duo atop a hip-hop apparel empire that sells one of the
best-known brands in the category (Southpole), partly through a
series of mall-based retail chains (Against All Odds, owned by
Kenny). Sales of Southpole sweatshirts, jeans and jackets hit $350
million last year, up from less than $100 million in 2000; David Khym
expects sales at the Fort Lee, New Jersey company to top $400 million in 2006.

By the Numbers
Changing Room
Young Americans gain a fringe taste.
$179 billion The size of the U.S. apparel industry; hip-hop has 1%.
20% The year-over-year average growth of the U.S. urban clothing category.
60% of the urban clothing market is targeted at men.
Source: NPD Group.

Hip-hop apparel, a $2 billion market, is a small but fast-growing
segment of the U.S. clothing industry, according to NPD Group, which
tracks such trends. In large part that rapid growth has been fueled
by those aspiring to the riches and glamour of hip-hop
celebrities--the larger-than-life, bling-dripping stars such as
Russell Simmons and Sean (Diddy) Combs, whose flashy lifestyles boost
their own brands (Phat Farm and Sean Jean, respectively). Those big
names occupy the pricey end of this apparel segment--Sean Jean opened
a swanky shop on New York's Fifth Avenue in 2004--but have left wide
open a more affordable segment that the Khyms are happy to exploit.
Southpole sells for a third less.

So how did a couple of low-key, English-as-a-second-language brothers
take a piece of this out-of-character market? Says Kenny, "We were
just a couple of cocky Korean guys who didn't think we could fail."

The Khyms got their start in the U.S. in 1977, when the family
immigrated to New York from Incheon, near Seoul. (The unconventional
transliteration of their surname traces to an earlier family presence
in the U.S.) When he was 22, David, the third eldest of the five Khym
kids, got a job at a Korean deli. Later he went to work for another
Korean immigrant at his wholesale apparel company.

In 1981 he took all of his savings--$10,000, and a $5,000 line of
credit for merchandise from his apparel boss--and opened a retail
men's clothing store in Brownsville, a rough, mostly black Brooklyn
neighborhood. Half a dozen other Koreans owned stores on
Brownsville's Pitkin Avenue at that time, says David. Sometimes they
heard gunshots. If a delivery was left before dawn, there was a good
chance it would disappear. But over time David became friendly with
his neighbors, sometimes giving them clothing or food. "We could not
focus on being the outsiders," says David. "We had to earn our respect."

David hired Kenny, then a high school student, to work for him. Every
day after school Kenny worked as a messenger, carrying inventory on
the subway from wholesalers in Manhattan to the Brooklyn shop. "And
for all of my hard work he paid me $20 a week!" says Kenny, only
partly in jest. "But what could I do? He is my older brother, so I
had to serve him."

Kenny continued working for David through college (never earning more
than $20 a week, Kenny is quick to let you know). When the Brooklyn
landlord upped the rent in 1989, David moved his store to Jamaica,
Queens--another largely black area.

Shoppers there were into urban clothing fashion--baggy jeans, for
instance--that the Khyms couldn't seem to stock quickly enough.
Apparently other retailers in the area had the same problem. So in
1991 the brothers set up a wholesale business, Wicked Fashions, and
began sourcing denim from Pakistan specifically to fill this demand.

A clothing revolution was brewing, and the Khyms were hard by it. The
adjoining Queens neighborhoods of St. Albans and Hollis were home to
many famous rappers, such as LL Cool J and Run-DMC. It was in Hollis
where the brand FUBU, an acronym for "For Us, By Us," was born in
1992, when a young waiter named Daymond John began sewing hats with
the label he created. FUBU exploded, giving rise to the first line of
what would become a slew of hip-hop brands. FUBU also had hybrid
origins, receiving backing from Samsung America, the New
Jersey-headquartered venture arm of Korea's Samsung conglomerate.
Behind the scenes the Koreans provided budding FUBU with production
and distribution channels.

But at the same time black-Korean tensions began boiling, with New
York and especially Los Angeles seeing violence break out. But the
Khyms, who'd become U.S. citizens, kept the faith. Says David, "We
just kept our heads down and kept working hard."

As demand for oversize sweatshirts and T shirts grew, David saw
opportunity to market his label to a broader audience. He named it
Southpole, in an apparent act of Korean patriotism: The first Korean
team to reach the South Pole had done so several years earlier.

Southpole mimicked styles it saw on the street--and sold them for
less than the celebrated hip-hop brands. In addition to watching what
their customers wanted, the Khyms conducted their own market
research. On one trip to Harlem Kenny spotted a young black man
wearing what appeared to be a down-filled puffy jacket. They took
note of the jacket so it could be reproduced with the Southpole label.

At big tables in Hong Kong factories the brothers spread out their
photographs and sample clothing purchases, explaining in painstaking
detail what they wanted. (They did not use manufacturers in Korea,
since by that time the rise of labor unions had made it too
cumbersome and expensive to make clothing there. Today they source
most products from Pakistan, India, China and Vietnam.)

All along, though, Kenny had his own ambition: to start a mall-based
chain of retail stores selling nothing but hip-hop clothing. But the
dutiful little brother had promised David that he'd stick with
Southpole for five years. "People said to me, 'Are you crazy? You are
already successful!' I was a big shot, in charge of designing,
manufacturing, bringing all the product in. I was a vice president,"
says Kenny. "But Southpole was David's dream, not mine." Kenny left
for a minimum-wage clerk job at a men's clothier in a New Jersey
mall. "I had to learn this business from the inside out," he says.

After five months of ringing up customers and folding sweaters, Kenny
set up Against All Odds, using his savings for rent money. David gave
him Southpole merchandise with extended credit lines--two months for
other buyers, six months for little brother. At that time, in 1996,
Kenny says, there were no mall-based hip-hop stores. He set up shop
at another New Jersey mall.

But there was a problem. "The mall was pathetic," says Kenny. "I
realized pretty quickly that nobody shopped there. You could roll a
bowling ball down the walkway and the chance of hitting somebody was
zero. This was my first learning stage."

Kenny had to lure shoppers. Another mall about a mile away routinely
drew crowds, but for Kenny the lease was too steep. So he made up
thousands of fliers ("10% off everything in the store!"), leaving
them on car windshields in the other mall's parking lot. Soon Against
All Odds had the foot traffic that Kenny sought. By sleeping at one
of his stores, he cut his living expenses almost to zero. "I had no
rent," he recalls, "but my parents were a little worried."

For promotional ideas Kenny brainstormed. A Canadian buddy told him
that the day after Christmas, called Boxing Day (as it is also known
in the U.K.), was the biggest shopping day in the malls. Kenny saw a
sale opportunity. Bribing the mall security guards with dinner on
Christmas Eve, he persuaded them not to kick him out that night.
Kenny worked feverishly to rearrange the merchandise in the store. He
made big posters that read "Boxing Day Sale!", staying up all night
and much of Christmas to get the work done. Recounting the story
today, 41-year-old Kenny shakes his head and laughs. "I did get some
traffic that day, and a lot of confused people asked what 'Boxing
Day' was," he says. "Mostly people wanted to make returns."

But they kept coming back. Today there are 41 Against All Odds stores
in malls in seven states. In 2005, Kenny says, sales were $78
million. He is shooting for $100 million in sales this tenth
anniversary year. Southpole is less than 10% of his business. "David
is now just one of my suppliers," Kenny says. "It's a healthy
competition we have."

But the older brother, now 50, is not slackening. Inho Park was
president of the U.S. operations of Samsung's Cheil Industries, a
chemicals and textiles company headquartered in New Jersey, before he
joined David seven months ago as Southpole's development manager.
"David is quiet and shy and is not eloquent," says Park. "But his way
of thinking is extraordinary. He never stops challenging himself. He
sets seemingly impossible goals." One of them: $1 billion in sales by
2010. Says Park: "It sounds impossible. But I think it is achievable."

The Southpole brand has pulled at least even with FUBU and is now
sold through Sears and J.C. Penney, America's bulwark general
merchandisers. Southpole is Penney's strongest national brand in the
young men's (ages 14 to 24) category. "The popularity of Southpole
among teens prompted us to expand the brand to teenage girls and
kids," says a chain spokeswoman.

Without a celebrity to show off, that's taken paid promotion.
Southpole spends 3% of revenues on marketing--a touch higher than its
bling-bling competitors.

And David continues seeking new ways to expand his business--such as
with a new line he developed in 2001, called Lot 29. Developed with
Warner Bros., the clothes feature embroidered images of cartoon
characters such as Tweety Bird. These higher-margin item are sold via
different distribution channels than are the Southpole-branded goods.

Back at the showroom in New York, Lot 29 marketers showed off the
label's newest incarnation to the Macy's buyers: a slightly more
upscale line, this time without the characters.

"Well, how'd it go?" asks Kenny when Inho Park returns from talking
with the customers. Park pulls up a chair, smiles and says, "I feel
like dancing!" Macy's is considering testing the Lot 29 line this fall.

1 Comments:

At 11:10 PM, Blogger Lucie said...

I've never heard of southpole, but another Korean-owned apparel brand that is becoming very popular with the ladies is Forever 21. It was founded in 1984 by Do Won (Don) Chang and his wife as Fashion 21. It currently operates over 200 mall-based stores, and has a thriving online business. It is constantly mentioned in women's magazines as a place to get trendy clothes for cheap (most of their clothing is private label). It's great to see Korean Americans running such diverse businesses that are gaining brand recognition.

 

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