By Kim Jae-heun
Retail companies are reorganizing their respective business structures to cope with a rapidly changing ecosystem in the industry.
Expanding concerns over the spread of the coronavirus have brought uncertainties in corporate management, which has led many ― including the likes of LF Corporation, LG Household & Health Care and AmorePacific ― to either integrate or separate their subsidiaries.
LF Corporation (LF) is strengthening its food and beverage (F&B) business in an effort to transform the firm into a lifestyle company.
In 2007, LF established LF Food to launch a seafood buffet restaurant "Makino Chaya" and Japanese ramen brand "Hakoya." Ten years later, LF Food acquired international food material distributing company "Mono Link" to trade items in both business-to-business (B2B) and business-to-consumer (B2C) sectors.
Established in 2000, Mono Link has been importing international ingredients from various countries including Japan, Thailand and Vietnam. They trade directly with local companies to offer a fair market price while providing free cooking programs for restaurant owners. Its revenue has been growing 30 percent every year, reaching 100 billion won last year.
Mono Link has been operating separately from LF Corporation's other subsidiaries until now, but it will come under one management system starting March 1.
Monolink's online food shopping mall "Mono Kitchen" has also posted a notice stating that it will transfer customers' personal information to LF Food, meaning that the distribution company will join the group congregating LF Food's affiliates.
By streamlining and realigning its business structure, LF is aiming to achieve a "synergy effect" between subsidiaries in various sectors and become the leader in the local F&B sector.
LF has recently acquired Koramco Reits & Trust to enter the field of mortgage loans. It has also merged and acquired 10 firms to advance into the online distribution and cosmetics sectors too. It also bought bakery and coffee shop "Publique" in 2015 and acquired the trademark rights of popular premium burger brand "Kraze" in 2017.
Meanwhile, LF Corporation is planning to separate its three fashion brands; TNGT, Blue Lounge and Il Corso, into independent corporations.
"The three brands run their business mainly on the street, which is quite different from other brands that operate stores at shopping malls. Also, their main target customers are in their 20s and 30s, which requires quick decision-making," an LF Corporation official said.
LG Household & Health Care (LG H&H) and AmorePacific are also reorganizing their business structure to reinforce the efficiency of subsidiaries.
In January, LG H&H has incorporated American health and beauty company New Avon into its U.S. branch. The household and health care company acquired New Avon last year to further expand its business in the American market.
"By incorporating New Avon under our U.S. branch, we can better manage the American firm and reduce business risks and taxation," an LG H&H official said.
LG H&H has also announced that it will put OBM Lab under its managerial system, which supplies raw materials for the company's luxury cosmetics brand "The History of Whoo." The household and health care company hopes this will allow a stable supply of materials and tighten the security of commercial confidentiality.
Since OBM Lab has been providing the raw materials for Whoo and another luxury cosmetic brand "Sooryehan," LG H&H achieve 2 trillion won in sales for the first time as domestic cosmetics company in 2018.
Last October, AmorePacific separated its beverage brand O'sulloc into an independent corporation.
The company official said the move was meant to improve business expertise and efficiency.
An industry source said the corporations' efforts to reorganize their business structures can be seen as a move to maximize synergy between subsidiaries.
"Due to the coronavirus incident, companies need management systems that can receive feedback in a timely manner and give orders to cope with rapidly changing environments," the source added.
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| LF President & CEO Koo Bon-keul |
Expanding concerns over the spread of the coronavirus have brought uncertainties in corporate management, which has led many ― including the likes of LF Corporation, LG Household & Health Care and AmorePacific ― to either integrate or separate their subsidiaries.
LF Corporation (LF) is strengthening its food and beverage (F&B) business in an effort to transform the firm into a lifestyle company.
In 2007, LF established LF Food to launch a seafood buffet restaurant "Makino Chaya" and Japanese ramen brand "Hakoya." Ten years later, LF Food acquired international food material distributing company "Mono Link" to trade items in both business-to-business (B2B) and business-to-consumer (B2C) sectors.
Established in 2000, Mono Link has been importing international ingredients from various countries including Japan, Thailand and Vietnam. They trade directly with local companies to offer a fair market price while providing free cooking programs for restaurant owners. Its revenue has been growing 30 percent every year, reaching 100 billion won last year.
Mono Link has been operating separately from LF Corporation's other subsidiaries until now, but it will come under one management system starting March 1.
Monolink's online food shopping mall "Mono Kitchen" has also posted a notice stating that it will transfer customers' personal information to LF Food, meaning that the distribution company will join the group congregating LF Food's affiliates.
By streamlining and realigning its business structure, LF is aiming to achieve a "synergy effect" between subsidiaries in various sectors and become the leader in the local F&B sector.
LF has recently acquired Koramco Reits & Trust to enter the field of mortgage loans. It has also merged and acquired 10 firms to advance into the online distribution and cosmetics sectors too. It also bought bakery and coffee shop "Publique" in 2015 and acquired the trademark rights of popular premium burger brand "Kraze" in 2017.
Meanwhile, LF Corporation is planning to separate its three fashion brands; TNGT, Blue Lounge and Il Corso, into independent corporations.
"The three brands run their business mainly on the street, which is quite different from other brands that operate stores at shopping malls. Also, their main target customers are in their 20s and 30s, which requires quick decision-making," an LF Corporation official said.
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| LG Household and Health Care CEO and Vice Chairman Cha Suk |
In January, LG H&H has incorporated American health and beauty company New Avon into its U.S. branch. The household and health care company acquired New Avon last year to further expand its business in the American market.
"By incorporating New Avon under our U.S. branch, we can better manage the American firm and reduce business risks and taxation," an LG H&H official said.
LG H&H has also announced that it will put OBM Lab under its managerial system, which supplies raw materials for the company's luxury cosmetics brand "The History of Whoo." The household and health care company hopes this will allow a stable supply of materials and tighten the security of commercial confidentiality.
Since OBM Lab has been providing the raw materials for Whoo and another luxury cosmetic brand "Sooryehan," LG H&H achieve 2 trillion won in sales for the first time as domestic cosmetics company in 2018.
Last October, AmorePacific separated its beverage brand O'sulloc into an independent corporation.
The company official said the move was meant to improve business expertise and efficiency.
An industry source said the corporations' efforts to reorganize their business structures can be seen as a move to maximize synergy between subsidiaries.
"Due to the coronavirus incident, companies need management systems that can receive feedback in a timely manner and give orders to cope with rapidly changing environments," the source added.
