[THE INVESTOR] SKINFOOD CEO Cho Yoon-ho is seeking to sell his majority stake in the Korean budget cosmetics brand to a strategic investor before its valuation falls further, according to industry sources on Sept. 20.
Currently, Cho is the largest stakeholder with 77.28 percent stake, while the remaining stocks are owned by his family.
The company has been denying speculations, but many industry watchers are projecting that SKINFOOD may shut shop due to its poor financial condition. Although, it seems more likely that CEO and his family will sell the entire stake instead of closing down stores.
Although SKINFOOD declined to confirm, according to sources, some strategic investors are currently conducting due diligence of the Korean cosmetics firm.
In 2010, the brand was ranked as one of the top three budget beauty brands here, with sales reaching 164.2 billion won (US$147.30 million). Nevertheless, SKINFOOD has been losing money since 2014 with its sales dropping 25 percent from 169 billion won to 126.9 billion won on-year in 2017, while its operating losses reached 1 billion won.
The fall was mainly due to increasing competition from other Korean cosmetic brands like Innisfree and Missha, which offer similar products at discounted prices. Moreover, the trend of Korean customers mainly shopping at health and beauty stores, which sell differentiated budget cosmetics brands, has also made the situation more difficult for SKINFOOD.
By Song Seung-hyun (email@example.com)