E-Land Group, one of the country’s largest fashion-retail business groups, is rumored to be eyeing Korean budget cosmetics company Able C&C ― operator of the brands Missha and A’Pieu ― in a bid to gain a foothold in the cosmetics market.
Earlier this month, E-Land reportedly had Samil PricewaterCoopers conduct a due diligence on Able C&C’s finances and business status, according to industry sources.
“Able C&C has the kind of brand power, resources and distribution channels that E-Land is looking for,” said one financial analyst, declining to be identified.
In April, E-Land Group’s vice chairwoman Park Sung-kyung told reporters that E-Land would be open to acquiring a cosmetics firm once it sees a “good buy” on the market. By acquiring a strong local operator, the group expects to receive a leg up in penetrating the global cosmetics market.
|E-Land vice chairwoman Park Sung-kyung (E-Land)|
“E-Land has one of the most solid retail networks in South Korea and China. It is no surprise that the group wants to expand its business portfolio to cosmetics in a move that would bring it closer to creating an empire spanning fashion and beauty,” the analyst said.
Able C&C may be such an item for E-Land, which currently runs 54 fashion brands, 12 dining brands, four retail brands, five hotels and four amusement parks.
The company’s flagship brand Missha, launched in 2002, became a market leader in 2011 with hit products that it claimed were on par with luxury skin care brands such as Estee Lauder and SK II, but at dramatically cheaper prices.
Missha’s nail lacquers, for instance, start at 3,300 won ($3), while its higher-end antiaging cream made with Korean traditional medicinal ingredients are sold at prices of around 40,000 won to 50,000 won. This cream is distributed in more than 22 countries including Japan, China, the United Arab Emirates, Saudi Arabia, the U.S. and Slovakia, Missha said.
However, not all is well for the company. In what may have been a side effect of aggressive marketing policies and heavy competition, the company reported 3.9 billion won of operating loss in the first quarter of this year. Sales stood at 96.6 billion won. Earlier, in 2013, Missha lost its dominance in the budget cosmetics market to LG’s The Face Shop and AmorePacific’s Innisfree.
Meanwhile, both Able C&C and E-Land denied the speculation.
“No due diligence was conducted regarding an acquisition,” said Park Ga-yeon, an Able C&C spokeswoman.
E-Land officials claimed that the company is still focused more on fashion and retail. “Able C&C is not an option for us,” said Hwang Woo-il, an E-Land spokesman.
By Bae Ji-sook (firstname.lastname@example.org