Hyundai Department Store didn't sleep on its mattress acquisition
Hyundai Department Store will acquire mattress maker Zinus for 894.7 billion won ($738.4 million), the biggest acquisition deal for the company.
The department store announced Tuesday it will acquire a 30 percent stake — owned by Zinus CEO Lee Youn-jae and five other affiliated people — of mattress company Zinus for 774.7 billion won. Another 120 billion won will be used to buy newly issued shares.
The deal makes Hyundai Department Store the largest shareholder of the company, with its total stake at 35.82 percent for 894.7 billion won.
Zinus plans to use the investment to build a new manufacturing plant in Indonesia.
This is Hyundai Department Store's biggest acquisition deal. Its acquisition of apparel retailer The Handsome in 2012 for 420 billion won was its second biggest deal.
Zinus is a local mattress maker based in Seongnam, Gyeonggi, but is known as the Amazon mattress. It sells to the U.S. market through Amazon and controls over 30 percent of the online mattress market in the country. As of 2021, 97 percent of its revenue came from exports.
"Through the acquisition of Zinus, Hyundai Department Store is going beyond retail and preparing to go into manufacturing and expanding its overseas sales channels," said Nam Sung-hyun of Hanwha Investment & Securities. "It could also be an opportunity for it to combine its offline retail businesses with online channels, enhancing the competitiveness of its relatively weak online business."
Its parent Hyundai Department Store Group announced last year it will focus on the home and furniture business. It is aiming for its subsidiaries in the business to report combined annual sales of 5 trillion won in 2030, double the revenue of last year. Zinus reported revenue of 1.12 trillion won in 2021, up 13.6 percent on year, and this is expected to bring the company one step closer to achieving its goal.
Partnerships with Hyundai Department Store Group subsidiaries such as furniture company Hyundai Livart and interior design company Hyundai L&C are to be expected sometime in the future.
BY LEE TAE-HEE [email@example.com]