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L Catterton, Affinity join bid for Style Nanda

PUBLISHED : January 22, 2018 - 11:37

UPDATED : January 22, 2018 - 11:39

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[THE INVESTOR] The race to acquire Style Nanda, a Korean budget fashion and cosmetics brand, is heating up, with global big names, including LVMH-backed L Catterton and Hong Kong’s Affinity Equity Partners, joining the bid worth up to 500 billion won (US$467 million).

According to industry sources on Jan. 22, Nanda, the parent firm, has recently received letters of intent from potential bidders, including the two financial investors as well as a local department store chain, to sell up to 70 percent stake. 


Style Nanda's more than half the salescome from cosmetics brand 3CE.



Related:
Unilever acquires Carver Korea for US$2.7b
LVMH-backed L Catterton ups its stake in Gentle Monster
Affinity to buy Lock&Lock for US$558m


Some global cosmetics giants such as France’s L’Oreal and Japan’s Shiseido are also said to be interested in the stake purchase.

Style Nanda, launched in 2005, is one of the earliest and most successful shopping malls riding on the cheaper fast-fashion trends and K-pop boom in Asia, especially China. Its sales soared to reach 170 billion won last year.

While it started as a fashion brand, more recently it is focusing on cosmetics business. Now more than half the sales come from its budget cosmetics brand 3CE, one of the most popular brands among Chinese travelers.

“Style Nanda is now considered more like a cosmetics brand. After several success stories like Carver Korea, global investors are paying keen attention to Korean cosmetics brands,” an industry source told The Investor on condition of anonymity.

In September, Unilever purchased a controlling stake in Carver Korea for 2.27 billion euros -- the biggest-ever deal in the nation’s beauty market.

“Despite the market potential, it remains to be seen whether the firm can improve its own research capabilities that still lag behind its local rivals,” he added.

For its fashion business, the firm is focusing more resources into operating off-line boutique shops in an upscale push – a latest trend among successful online fashion brands here.

In 2016, CEO Kim So-hee who owns the entire stake in the firm sought to sell a sizeable portion along with the management rights and several candidates like Hyundai Department Store and TPG were in talks. But negotiations collapsed at the last minute largely due to the firm’s lax handling of audit issues.

In the meantime, L Catterton, formed in 2016 through a partnership of Catterton, LVMH and Groupe Arnault, has been increasingly purchasing stakes in Korean companies in recent years, including US$80 million in YG Entertainment, US$50 million in Clio, a cosmetics maker, and US$230 million in Gentle Monster, a sunglass brand.

Affinity has also been upping stakes in Korean firms. In August last year, the firm purchased Lock&Lock, a Seoul-based plastic container maker, for 629.3 billion won.

By Lee Ji-yoon (jylee@hearldcorp.com)

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