Fashion outlet ceo stays course amid competition
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Hong Seong-yeol, CEO of Mario Outlet, talks about his leadership during an interview held at Mario Outlet II in Gasan-dong, Geumcheon-gu, Seoul, Thursday. / Courtesy of Mario Outlet
By Kim Ji-soo
Hong Seong-yeol, CEO of Mario Outlet, believes in doing things with honesty; in a “do-or-die” style.That is how he built his Mario Outlet and maintains its edge against heightening competition.
“People nowadays only talk about giving it their all or committing to something in a do-or-die style. But what they need to know is that one’s actions must be, in and of themselves, do-or-die,” said Hong, 62, as he speaks about the company he founded 36 years ago to launch the fashion brand Carte Knit, and which has since grown into a massive outlet in the former factory district of Guro in southwestern Seoul.
Perhaps it is a tall order for the young generation, or perhaps just heartfelt advice from a self-made businessman.
“I want to train my employees so that they feel like they can grow at Mario. Just recently, a few have left to become government employees. I let them go but also let them know that they can come back after having learned much,” Hong said in an interview at his office at Mario Outlet in Gasan-dong, Seoul.
The Herb Village in Yeoncheon, Gyeonggi Province.
“I don’t ask them to stay; I let them go. And I believe in managing my employees not through human relationships but with concrete goals as to where the company is headed,” Hong said.
A native of Dangjin, South Chungcheong Province, Hong started his firm in 1980 in Daebang-dong with a 2 million won loan from his family members. Daebang-dong is a neighborhood not far from Gasan-dong, formerly the Guro Industrial Complex. A self-taught fashion person, he took executive-level business courses at Yonsei University and Sogang University.
When the financial crisis hit Korea and other parts of Asia in the late 1990s he witnessed the former factory district of Guro hollow out and companies, including clothing firms, go bankrupt. This was when the idea struck him. He would create outlet malls that sell inventory at affordable prices. The story of how he went against the advice of business acquaintances and fought legal hurdles and strong regulations are well-repeated.
Asked about his toughest hurdles, Hong said, “I don’t know which one to cite.”
Hong pursued his business goal to build his three Mario Outlets beginning in 2001 through 2012. The Mario Outlet stand among other modern fashion malls in what is now the Seoul Digital Industrial Complex, the former Guro factory industrial zone which is now a modern outlet shopping district. The Mario Outlet is note-worthy in that it sells some 600 brands including luxury ones.
His success is such that he is frequently invited to open Mario Outlet elsewhere in the country and even in China.
“I have put my plans for China on hold for a while. Why? It’s simple. I cannot talk through a translator anymore,” he said. He admitted that when he was first exporting his Carte knitwear, he talked through translators.
But running a massive stretch of outlet malls means a whole new game.
“It means a leader having to know and manage everything, from cleaning, to display, to architecture-related issues,” Hong said, which is difficult to do through a translator.
Hong is so jocular that he mixes a joke or two in between what he says. During the nearly two-hour interview it was easy to tell that Hong is very much a hands-on leader who likes to work “efficiently, smartly and with perseverance,” he said.
As to why he jokes a lot, he said, “I have to joke or I would be thinking about work all the time,” he said.
Hong wears many hats, as CEO of Mario Outlet and owner of Herb Village in Yeoncheon. He said he is foremost a fashion person who has a verve for business and luck in meeting good people.
“Once I show my sincerity, I hear that people can never forget it,”he said confidently.
Earlier this year, he made news by opening anew Herb Village in Yeoncheon, Gyeonggi Province. It’s a pretty sprawl of some 57,000 square meters formerly owned by Chun Jae-kook, first son of the former President Chun Doo-hwan. The government seized Herb Village when the former president failed to pay fines totaling 220 billion won (or about $192 million) in restitution to state coffers for money that he was found to have accumulated illegally. The village came up for sale, and Hong purchased it. Hong’s plans for Herb Village are very detailed.
“Since we acquired it only in late 2015, we will have to experience four seasons this year to determine just what concept the village will eventually embody,” Hong said. He said he is testing various flowers, “We have planted anjelonia recently and have many others to plant at the village, which also has about 40 lodgings.
“I am thinking of several ideas for the village. A businessman’s ideas must change swiftly in this time and age,” Hong said.
Hong has created a garden and animal farm at the Mario Outlet so the Herb Village seems an extension of those business approaches.
Asked about the increasing competition from large conglomerates and other companies for outlet malls, Hong asked back, “Aren’t two department stores, two large marts per district (in Seoul) too much?” His employees, those on the frontlines, said they are watching the market development closely.
Hong has always subscribed to the principles of honesty and providing the best service at the most affordable price to customers. The Mario Outlet is estimated to post some hundreds of billions of won in annual sales, yet the company has made significant efforts to attract Chinese visitors through foreign language services, tax refund services and payment options in their currency.
“Honesty will get you through so many suspicions, so many questions and unearthing,” Hong said.
Asked again what were the hardest times in his life, he recounted several incidents, including when his first workshop for Carte Knit was flooded in 1987 (during which he confessed to his Japanese suppliers about why he could not meet the deadline, which led to better relations with the clients) his legal hurdles and battles to build Mario Outlet.
“As a leader, I make sure to manage our organization, make cool judgments, show initiative and show attention to detail,” Hong said.