Faltering brand MCM gets a new lease on life
▶ Kim Sung-joo, chief executive of Sungjoo Design Tech and Distribution Inc., standing next to MCM products. [JoongAng Ilbo]
For Kim Sung-joo, founder and chief executive of Sungjoo Design Tech and Distribution Inc., it was all about beating the odds.
“I’ve done it. Finally,” an emotional Ms. Kim said over the phone from Zurich, Switzerland, after her company completed the takeover of German brand MCM on Friday. “I am so happy I am choking up.”
In June, Sungjoo, which has been the exclusive distributor of MCM goods in Korea since 1991, said it was in negotiations to acquire MCM. Since March, when it signed a deal to receive exclusive distribution rights for Korean-made MCM goods in some parts of Southeast Asia, Sungjoo has been in charge of the German brand’s international marketing strategies and designing MCM’s signature handbags. It was also at that point that the negotiations began in earnest.
However, fashion industry analysts have been skeptical about Sungjoo’s chances for the acquisition, arguing that Korea as a nation does not carry the clout and positive image of leading fashion countries in Europe.
However, Ms. Kim, 49, proved her critics wrong. And she is not about to stop and rest on her laurels. “The global luxury brand market is in the midst of mergers and acquisitions,” she said. “There are a number of brands we want to take over in Europe as well.”
On Friday, Sungjoo hosted a fashion show in Munich, where MCM got its start, to mark the new beginning for the struggling company. Munich will also be home to a new flagship store.
Once considered Germany’s answer to Louis Vuitton, MCM recorded close to $300 million in annual sales in the mid-1990s, but has since suffered through inadequate brand management.
Despite a drop in sales, MCM has remained one of the best selling foreign brands in Korea. Ms. Kim, who first entered the clothing business as part of the strategy planning team of Gucci in 1987, has received the most credit for MCM’s strength in the Korean market, where, in 2004, its items distributed by Sungjoo through some 40 stores generated 62 billion won ($59 million) in sales, more than the figures in MCM’s home country.
“I know what needs to be done in order to revive a struggling brand,” Ms. Kim said, adding she has been able to draw from her experience at Gucci.
Her work, she said, is far from done. “Within the next five years, we hope to challenge Louis Vuitton again. I want to represent Korea’s businesswomen at the top of the luxury brand market.”
by Yang Sunny