Kim Dong-sun, head of strategic management at Hanwha Galleria and the youngest son of Hanwha Group Chairman Kim Seung-youn, is ramping up efforts to amplify his presence as a succession scheme at the nation’s seventh-largest conglomerate is taking shape centering on the chairman’s three sons.
While his elder brothers -- Dong-kwan, president of Hanwha Solutions; and Dong-won, president of Hanwha Life Insurance -- are taking over the group’s key defense and energy and financial business units, respectively, the youngest Dong-sun’s role had long been under wraps.
In March this year, Hanwha Galleria was spun off from Hanhwa Solutions to be directly controlled by its de facto holding firm, Hanwha Corp. The move was made to simplify Hanhwa Galleria’s governance structure.
The new structure speeds up Hanhwa Galleria’s decision-making process, especially on major merger and acquisition deals. But industry watchers say the latest spinoff is aimed at completing Hanwha’s leadership transition from the charismatic chairman to his three sons, with the youngest Dong-sun leading the group’s modest but promising retail business that includes Hanwha Hotel & Resort and Hanwha Galleria.
In a recent regulatory filing, the junior Kim tripled his stake at Hanwha Galleria, the group’s retail arm, from 50,000 to 160,000 shares. He now owns 0.08 percent of the total shares worth 182 million won ($137,384).
“(Kim Dong-sun's) stake purchase comes as he aims to fortify his management control over the retail unit as well as enhancing corporate value,” a Hanwha Galleria official said.
The official hinted that for Kim to expand his presence as the de facto head of the group’s retail business, he would focus on targeting new businesses such as looking into the soft landing of diverse overseas brands in Korea. For instance, Hanwha Galleria set up a subsidiary called FG Korea to facilitate the process of importing the US burger chain Five Guys – one of Kim's latest pet projects.
Kim is also looking into preparing businesses specifically targeted at consumers of the “MZ generation” – a local term referring to millennials and Generation Z. Kim recently bought land adjacent to the Galleria Department Store in the posh Gangnam district, southern Seoul, for some 89.5 billion won, in a bid to attract younger shoppers who were previously marginalized by sales of high-end products at the luxurious retail outlet.
“Revving up the group’s existing retail businesses such as sales of department stores would not be Kim’s top priority. Instead, he will be in charge of dealing with attracting new business opportunities,” the Hanwha official added.
Another industry official said this could be a turnaround for Kim Dong-sun, whose presence in the group had been low compared to his older brothers.
“Considering Kim Dong-sun’s stake, his position in Hanwha Group is currently insignificant,” the official said, adding that Hanwha Galleria and Hanwha Hotel & Resort take up just some two percent of the group’s total sales.
“However, if Kim manages to attract large-scale M&As for the group’s retail business and ramp up the group’s premium food business, he could be on track to completely change his status within the group," he added.