S. Korean skincare brand Skinfood invites bidders for open tender

Skinfood Co., one of the first wave of road K-beauty labels under court management, has been put for sale in an auction.

Skinfood and its sale advisor Ernst & Young Han Young on Monday announced public notice of the sale, inviting letters of intent until March 14. Bidders will be allowed to conduct a due diligence from March 18 to April 5 and make a final proposal. Preferred bidder is expected to be selected by the end of April or early May.

The bidder will take control over the company by acquiring new shares and bonds.

Skinfood, the country’s first food-rooting cosmetics brand, was founded by chief executive Cho Yoon-ho in 2004 after mid-size cosmetics firm Peeres founded by his father Cho Joong-min collapsed in early 2000 in the wake of Asian financial crisis.

Skinfood once ranked as one of the most popular beauty brands in Korea with annual sales reaching 200 billion won ($178.4 million) and profit 15 billion won from late 2000 to 2012. The brand ascended to become the third-largest cosmetics brand in terms of sales in 2010 after budget brands Missha and The Face Shop thanks to best-sellers Royal Honey Propolis Enrich Essence and Black Sugar Perfect Serum.

However, the company was hit hard by a sharp drop in the number of Chinese tourists following the outbreak of the Middle East respiratory syndrome in 2015 and diplomatic tension between Seoul and Beijing over the deployment of U.S. anti-missile program in 2016. Skinfood filed for court receivership in October last year, after facing supply issues and suffering from liquidity shortage from late 2017.

Skinfood, meanwhile, appointed Kim Chang-gwon, former chief executive of Hankuk Paper Manufacturing Co., as its legal administrator last month, to oversee the sale. The company resumed production of about 40 popular skincare items in November, last year, upon request for supply from customers at home and abroad.

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