Lotte Shopping may join IMM's purchase of a stake in Hanssem
Lotte Shopping is considering joining a bid for a stake in Hanssem, Korea’s largest furniture company.
On Wednesday, Lotte Shopping reported in a regulatory filing that it is reviewing the investment along with IMM Private Equity.
It added, “nothing specific has been decided.”
IMM Private Equity, a Gangnam-based group, agreed in principle in July to buy nearly a third of Hanssem from Cho Chang-geol, the company’s CEO, and seven other affiliated parties.
The exact percentage of the purchase has not been disclosed, but local media reports put the total amount being offered at 30.21 percent for 1.5 trillion won.
If Lotte Shopping agrees to the stake in Hanssem with IMM, the two will form a special purpose company for the deal, with Lotte Shopping owning 30 to 40 percent of that entity, according to a reports from local media.
The purchase is seen helping Lotte Shopping generate synergy effects in sales through its retailers, including department stores, discount marts and the Hi-Mart household electronics shops.
“In the post Covid 19-era, Lotte Shopping could offer a more diversified lifestyle to customers through acquisition of Hanssem,” said Prof. Seo Yong-gu, who teaches business at Sookmyung Women’s University. “Leading people’s lifestyles is important because people make purchases based on their lifestyles.”
Its rivals already have connections to furniture brands.
Hyundai Green Food, which owns 12.0 percent of Hyundai Department Store, owns 41.2 Hyundai Livart, while Shinsegae Department Store operates Casamia, both furniture brands.
Lotte Shopping has Conran Shop, which is related to the high-end furniture brand from Britain.
Lee Jae-min, an analyst at NH Investment & Securities, said in a report on Wednesday that the Hanssem “deal is attractive considering the rise in interest in furniture following Covid-19.”
Lee added sales of Hanssem’s brands grew 20 percent every quarter since the first quarter of last year.
Lotte’s joint purchase of Hanssem shares is expected to be determined after Lotte Group chairman Shin Dong-bin arrives back to Korea from Japan later this week, according to the local press.
BY JIN MIN-JI [firstname.lastname@example.org]