Caffe Bene founder Kim Sun-kwon’s Hyundai IPark apartment in Seoul’s affluent Gangnam district, is up for auction, according to local news reports on Nov. 21.
A Seoul court ordered the auction on Nov. 20 and is currently finalizing a date, said a source at Ggi Auction that specializes in real estate transactions.
|Caffe Bene founder Kim Sun-kwon|
“The house is up for auction after Kim failed to pay interest on his loans,” a Ggi Auction researcher was quoted as saying.
In September 2007, Kim purchased the apartment for 3.2 billion won (US$2.91 million) with no loans, according to industry sources. But seven years later, he used it as collateral for 2 billion won in loans from Hana Savings Bank to support his money-losing coffee chain.
The government appraisal price for Kim’s home is around 3.04 billion won. However, industry watchers expect it to fech only 80-90 percent of the price due to low demand for large-scale apartments.
Caffe Bene, established by Kim in 2008, once had over 800 stores in 2012, with sales peaking at 220 billion won. However, the rapid growth was soon challenged by market saturation. As of 2015, Caffe Bene recorded the highest rate of closing stores among top 10 coffee chains here, shutting down 140 stores, according to the Fair Trade Commission.
After selling Caffe Bene to a private equity firm in 2015, Kim attempted to recoup his previous losses by opening Tony Burger, a hamburger chain. Tony Burger outlets at one point expanded to over 70 in Seoul, but the number is now down to 50 due to competition from conventional burger brands.
By Song Seung-hyun (firstname.lastname@example.org