Korea's No.1 home decorating shop Modern House back on the sale block

Park Chang-young, Lee Young-wook, and Jenny Lee 2022. 5. 18. 13:30
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[Source: Modern House]
Modern House, South Korea’s No.1 home decoration firm, returns to the sale block with its owner of five years MBK Partners hoping to cash out from its investment at 1 trillion won ($786.7 million).

According to the investment banking industry on Tuesday, MBK Partners, Korea’s leading private equity firm, has selected Goldman Sachs to manage the sale of its entire stake in MHNCO., the operator of Modern House and BUTTER, its sub-brand of miscellaneous goods. MBK which bought the stake at 686 billion won in 2017 is asking for around 1 trillion won.

Modern House, established by E-Land Group in 1996, is Korea’s first home deco company. It holds the top position with a market share of more than 50 percent versus Shinsegae Group’s JAJU and MUJI, a joint venture between the Japanese home brand and Korea’s Lotte Group.

Over the last five years, Modern House has expanded its presence by opening new stores in major department stores. Its annual sales are expected to amount to 410 billion this year, up from 335.4 billion won in 2018 immediately after MBK’s acquisition from cash-strapped E-Land. Its EBITDA, the earnings before interest, taxes, depreciation, and amortization, is projected to be 60 billion won, up from 31.9 billion won in 2018. Its online sales' contribution to its total sales also jumped from 5 percent to 10 percent.

Its competitors Lotte, Shinsegae, and Hyundai Department Store are floated as possible candidates to go after the stake forsynergic effect, given the growing interest in home decoration among Korean consumers. GS Retail and SK networks may also come for the deal to bolster their lifestyle platforms.

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