KKR, Shinsegae, GS compete to buy Kim's Club

By Kim Jae-won

U.S. private equity fund KKR and local retail giants Shinsegae and GS Retail have shown interest in buying Kim’s Club, aiming to take over its lucrative outlet building in southern Seoul, company officials and sources said Friday.

Kim’s Club, a retail affiliate of E-Land Group, owns a NewCore Outlet store in Gangnam whose market value is about 500 billion won ($413.8 million). The store draws tens of thousands of shoppers everyday thanks to its location close to Gangnam Express Bus Terminal. Subway Lines No. 3, No. 7 and No. 9 are also easy to access from the store.

Shinsegae Vice Chairman Chung Yong-jin posted a photo of Kim’s Club Market in Gangnam last week with the comment “I’m spying” on his Instagram page. Market watchers said that he was showing his interest in acquiring Kim’s Club with the posting, though Shinsegae denied it.

KKR eyes the supermarket chain to create synergy with Ticket Monster, a local social commerce in which the fund owns a key stake, observers said. KKR lost a bid to buy Home plus, the nation’s second-largest discount chain, from U.K. retail giant Tesco last year. Local private equity fund MBK Partners bought 100 percent stake in Homeplus for 7.2 trillion won, the largest acquisition deal ever in Korea.

GS Retail, which runs convenience store chain GS25 and GS Supermarket, also seeks to expand its supermarket unit with the acquisition, market watchers said.

E-Land is seeking to sell the retail unit due to a liquidity crisis. The fashion and retail conglomerate is facing financial problems due to aggressive mergers and acquisitions at home and abroad over the last few years. Credit ratings agencies downgraded the group, citing its high loans to capital ratio.

E-Land has grown in to a mid-sized business conglomerate from a small clothing shop in the neighborhood of Ewha Woman’s University in western Seoul thanks to its good quality clothes sold for cheap prices.