Hanssem to appoint new CEO to overcome crisis

Hanssem's headquarters in Mapo, Seoul / Courtesy of Hanssem

By Kim Jae-heun

Hanssem, the country's largest furniture and home furnishing company, appointed Eugene Kim as the new CEO to improve profitability and foster a rebound, an industry official said, Wednesday. It has only been a year and a half since former CEO Kim Jin-tae took over the office, brought in to rescue the faltering business.

Hanssem's new CEO Eugene Kim

The biggest reason for the CEO change can be attributed to the company losing money despite the former CEO's efforts to revive it.

Hanssem posted its first annual operating loss since its listing on the local stock market, last year. It turned into a deficit with an operating loss of 21.7 billion won ($16.82 million) on a consolidated basis. During the same period, the furniture company's sales fell 10.4 percent, year-on-year, to show 2.1 trillion won.

The company is continuing to show a deficit, this year. It marked an operating loss of 15.7 billion won in the first quarter and industry officials believe it will not be easy for Hanssem to improve its performance this year.

Hanssem was severely affected by the slump in the real estate market, which led to the underperformance of its furniture and home furnishing business here. On top of that, its product competitiveness is also losing ground to newcomers to the market.

“The domestic interior market has been downsized due to a sharp drop in house sales. At the same time, the costs incurred in the process of pursuing a remodeling business strategy increase, a researcher at NH Investment & Securities Lee Eun-sang said. “It is difficult for house sales to recover in a short period of time, so it will take some more time for the company to improve profitability.”

Hanssem has adopted a digital transformation plan by launching an online mall to create a rebound in its fortunes, but it has not shown any notable results as of yet.

The new CEO, Kim, is a young female leader in her 40s, who was born in 1981. She is currently the CEO of Able C&C, a cosmetics company, which is operated by IMM Private Equity (PE). IMM PE is the largest shareholder of Hanssem with a 35.4 percent stake.