“Park is said to have been attracted to the fact that Kuznets had influenced his peers including the noted British economist John Maynard Keynes,” an industry source said.
This is not the first time Park has bought something that could be perceived as extraordinary. He is reported to have bought more than 3,000 reputed items at international auctions. Some of the most famous ones are the diamonds of Hollywood actress Elizabeth Taylor, which he bought for $8.8 million, as well as Jacqueline Kennedy’s pearl necklace, and stage costumes of Madonna and Michael Jackson.
“The items that he bought are on display at Ashley buffet restaurants, Lexington Hotel, Kensington Hotel and more, because Park thinks it is important to have ‘something to look at and visit’ at his business outlets. Especially at the Ashley Hongdae outlet in northern Seoul which showcases the belongings of pop stars such as The Beatles, John Lennon and Michael Jackson,” a company insider, who insisted on remaining anonymous, said.
But eventually, Park wants to exhibit them in a special museum, the dream of all collectors. In 2013, the group announced a plan to establish 10 to 15 museums, with the first one in Aewol county of Jejudo Island.
“The reason Park chose Jejudo is because more and more Chinese tourists visit the island, and China happens to be the largest overseas market for the enterprise. It may become a bigger market for profits than Korea one day,” the source said.
E-Land has acquired Poonglim Resort in Jejudo Island, and more recently opened Kensington Hotel Jeju by remodeling Seorabul Hotel that it acquired. The company has also joined hands with Chinese developer Hongkelong to develop a global culture-leisure complex, which includes the plan of a museum inside, but the project has been pending since 2012.
From fashion store owner to business empire
What started out as a 6.6 square-meter-cloth shop named “England” in front of Ewha Woman’s University in 1980 by Park has come a long way. E-Land has now more than 100 businesses under its belt ranging from fashion to eateries, interior design to lifestyle, resort, sports and cultural facilities. Its reported annual sales exceeded 10 trillion won last year, with over 20 percent generated in China. The company has more than 50,000 employees and is the 49th largest Korean business conglomerate by assets.
In the New Year’s briefing to his workers, Park told them that E-Land would become a global top 200 business group with more than 10 growth engines generating more than 1 trillion won sales each by 2021. He also suggested that the company would have more than 300 executives and 300,000 staff workers by then.
Park’s wealth has never been revealed because he is not a registered executive of his company and E-Land is not a listed company ― except for a small resort in Daegu, which the company acquired when it was already listed.
But taking into account that he owns 40.03 percent of E-Land World ― de facto holding company of E-Land ― whose treasury shares amount to 45.47 percent, followed by his wife’s stake of 7.94 percent, Park could safely be considered as owning more than 90 percent of the business empire.
Master of M&As
Many people attribute Park and his company’s success to his aggressive mergers and acquisitions. “E-Land has a reputation for discovering ailing but attractive companies and resuscitating them,” a stock analyst said.
In fact, E-Land has conducted about 20 M&As since 1980, of which a majority proved successful.
E-Land acquired ailing New Core Department Store in 1994 and transformed it into a successful discount store ― which was a rather new retail form back then and opened the era of discount outlets. The company has acquired Italian luxury fashion brand Mandarina Duck and several others to give an elegant boost to its business portfolio.
E-Land has also unsuccessfully eyed the acquisition of Korean budget cosmetics brand Missha, U.S. baseball team L.A. Dodgers and more.
The M&A deals are known to be performed by a small group of people ― a local daily reported that the notoriously reclusive Park and three of his very close aides conduct the business deals. “I don’t know if he is the master of M&A like many people say. But what I can say for sure is that he knows what exactly could make money,” a stockbroker was quoted as saying to a local daily.
But things may not be so rosy for Park.
His rather reclusive management style has been an issue several times. Being a devout Christian, Park has adapted sincere Christianity into his management. There are still chapel services in the morning and workers are “encouraged” to read the Bible. Job applicants have also reportedly been asked whether they are willing to convert to Christianity, and this policy is said to be the No.1 hurdle for E-Land to become a global enterprise with cultural diversity.
Local daily Money Today reported that Park has been reluctant to list his company out of fear that it would not be able to spare tithes.
“Park has been donating 10 percent of the company income to various charities as a tithe. But once outsiders intervene in its management, they may raise issues about the excessive donations,” the paper quoted an industry insider.
The fact that Park has had labor issues is also a setback. Labor unionists of E-Land held a strike for more than 200 days in 2000 and a sit-in for over 300 days in 2007, but he has reportedly stayed tight-lipped about the issue.
Park was even slammed by the parliament in 2007, when he refused to show up at the National Assembly’s audit into the matter. Lawmakers at the Labor and Environment Committee criticized him for evading the calls and making unnecessary business trips to the U.S. Workers held protests near Park’s church to raise public awareness.
The Korea Investors Service, a credit-rating firm, gave E-Land World and E-Land Retail a “BBB+” ratings. The KIS explained that E-Land has spent a whopping 270 billion won for M&As and another 1.2 trillion won for business expansion between 2012 and 2013. The firm also noted that E-Land’s debt ratio was 366.4 percent, with 4.8 trillion won in debt, as of September 2014.
The KIS noted that most of the debts need to be paid off within 1-2 years and that this could put a strain on E-Land’s financial status.
“But we are creating more cash than many other businesses in the industry. We believe it is better to invest than pile up cash reserves for the economy’s sake,” said Hwang Woo-il, the company’s PR manager, said.
“Our debt is not as serious as the numbers may portray because we are receiving money from China and other businesses. There’s not as much to worry about as some would suggest,” he said.
By Bae Ji-sook (email@example.com)