[Superrich] Clio’s stock price rises despite China’s retaliation

By Korea Herald
  • Published : Apr 6, 2017 - 14:59
  • Updated : Apr 6, 2017 - 17:15
Cosmetics brand CEO Han Hyun-ok has been enjoying an increase in her stock value, even amid faltering operations overseas following China’s retaliation against Korean companies over Seoul’s hosting of the US’ Terminal High Altitude Area Defense anti-missile system.

Established in 1997, CLIO is a domestic cosmetics brand specializing in color cosmetics. Its success led to Han becoming the only self-made woman listed among “Korea’s Richest 100.”

The company adapted the original equipment manufacturer system in the 2000s to sell high-quality products across Europe through the hands of foreign cosmetics manufacturers.

Its popularity further expanded in 2015 with the success of the KBS2 series “The Producers,” which helped promote CLIO’s product as “Gong Hyo-jin cosmetics” in China.

But recently, cosmetic brands have been among the hardest-hit by China’s economic retaliation against Korea’s THAAD decision.

The industry was struck badly in January when 11 tons of cosmetics were returned, followed by the General Administration of Quality Supervision, Inspection and Quarantine of China’s ban on some Korean cosmetic imports, citing sanitary procedures. While local cosmetics companies enjoyed brisk revenue in the first two months of the year, analysts have predicted a fall in the second quarter, as China’s group travel ban to Korea begins to take a toll on duty-free sales and others.

All the while, the value of Han’s stock assets has showed a clear upward trend, peculiar considering that Clio has been targeting the Chinese market, as have many other domestic cosmetics brands.
CEO Han Hyun-ok (center) participates in an event celebrating CLIO’s listing on the Kosdaq at Korea Exchange in Yeouido, Seoul, last November. (KRX)

Before Clio was listed on the Kosdaq, Han owned 90 percent of its unlisted shares, according to an audit report by the Financial Supervisory Service. After its listing last November, she now owns 60.91 percent.

On Jan. 11, her shares were worth 287.8 billion won ($254.1 million), and Han ranked No. 74 among Korea’s Richest 100. In the few months following, the price of the company’s shares increased by 39.26 percent.

Han was able to enjoy such an increase due to the quick recovery in stock prices. During the beginning of January when the downward risk posed by China was high, Clio’s stock price fell below 30,000 won per share, and skepticism on its recovery was widespread among the investors.

However, a rapid recovery in stock prices took place, and the closing price of Clio’s listed stocks reached 39,550 won per share as of March 10. The closing price of Clio’s stocks as of April 5 was 42,800 won, surpassing the offering price of 41,000 won that was set during its listing on the Kosdaq.

Clio was able to avoid the threats imposed by China’s retaliation owing to changes made in its distribution channels. Instead of establishing its own brand shop “Club Clio” as originally planned, it decided to enter the Chinese market through drug stores such as Watsons and Sephora.

Clio has also managed to increase its influence in the global market due to investments made by Louis Vuitton Moet Hennessy. The company not only owns luxury brands Louis Vuitton, Fendi and Marc Jacobs, but also distribution channels like Sephora and DFS duty-free stores, which has worked to CLIO’s advantage.

By The Superich Team
Yoon Hyun-jong
Lee Se-jin
Yim Ji-min (