Value context and insight. lkm@koreatimes.co.kr
MBK Partners strengthens retail biz prior to eBay Korea acquisition bid
By Lee Kyung-min
Consumer biz expert of 30 years to lead drowning Homeplus
By Lee Kyung-min
Local private equity firm (PEF) MBK Partners has appointed Lee Je-hoon, a financial and corporate management expert with over 30 years of experience, as the CEO of Homeplus. This strategic move will strengthen implementation of MBK's projected business model for the retail business involving synergy with e-commerce.
The decision by the PEF, the largest shareholder of the struggling retail chain, seeks to lay the groundwork for an ongoing merger and acquisition (M&A) deal regarding eBay Korea valued at up to 5 trillion won ($4.4 billion).
According to Statistics Korea data, eBay Korea is Korea's third-largest e-commerce platform, with 12 percent market share, following Naver (18 percent) and Coupang (13 percent). EBay's size is the reason MBK and its shortlisted competitors ― Lotte Shopping, Emart and SK Telecom ― are showing keen interest in what they consider a rare opportunity to change their profit models dramatically.
MBK expects Lee to contribute his years of expertise in the field, characterized by his previous strong track record.
Lee served as chief financial officer (CFO) and chief operating officer (COO) at Pizza Hut Korea beginning in 2000, after serving at the U.S. headquarters of Pepsi and the pharmaceutical company, Schering-Plough Corp.
Lee was then the CEO of Carver Korea, a cosmetics manufacturer best known for its product line, AHC (Aesthetic Hydration Cosmetics). He also led Buy the Way, the first convenience store introduced in Korea, and KFC Korea.
Chief among his tall tasks is rapidly to turn around Homeplus' woeful earnings figures over the past few years.
Homeplus reported an all-time low operating profit in 2019, brought on by the COVID-19 pandemic, but the figures had suffered long before the health crisis, as a number of online sellers were able to offer a variety of products at lower prices.
Homeplus reported a year-on-year sales decline of 4.69 percent, or 7.3 trillion won, between 2019 and 2020, amid the slump in the distribution industry brought on by the pandemic.
In the same period, its operating profit decreased 38.4 percent, the worst performance since its establishment in 2005.
The retailer said it seeks to raise its sales figures to 1.3 trillion won this year, 1.8 trillion won in 2022 and 2.4 trillion won in 2023.