(Yicai Global) Feb. 11 -- E-Land Group’s China subsidiary apologized yesterday for passing off inferior goods as high-quality, but the South Korean fashion giant said that it was penalized mainly because some of its products did not meet the required standards.

E-Land Shanghai Fashion Trading was fined more than CNY14,000 (USD2,200) on Jan. 29 by Beijing’s market regulator for selling substandard products. A down jacket that it was retailing for CNY1,598 (USD251) at the Beijing Department Store in fact only cost CNY75 (USD12) to make.

This incident has made consumers mistakenly assume that the manufacturing cost is the total cost to produce an item, which is not the case, E-Land Shanghai said. It apologized for the inconvenience caused but did not disclose the actual cost of making the item.

It is not the first time that Seoul-based E-Land has landed in hot water with Chinese regulators. Early last year it was fined CNY200,000 (USD31,400) by Shanghai’s market authorities for selling a women’s wool coat under its fast-fashion SPAO brand that did not contain any wool at all.

The E-Land Group entered China in 1994 and at its peak in 2016 ran over 8,000 shops across the country. Since then, business has gone downhill. It closed most of its SPAO outlets in 2017 and sold its stake in E-Land Footwear USA Holdings to Chinese sports equipment maker Xtep International Holdings for USD260 million in 2019.

Editor: Kim Taylor