Able C&C Reports 304.4 Billion KRW in Sales Last Year... Operating Profit Turns to Loss

[Asia Economy Reporter Seungjin Lee] Able C&C saw its operating profit turn to a loss last year as it was directly hit by COVID-19.

Able C&C announced on the 4th that its consolidated sales in 2020 were 304.4 billion KRW, a 27.9% decrease compared to the previous year. Operating loss turned to 66 billion KRW, and net loss for the period expanded by 809.1% to 87.4 billion KRW.

Offline sales plummeted last year due to the impact of COVID-19. Offline sales, combining franchise and directly managed stores, were 171.9 billion KRW on a separate basis in 2019, but dropped 47.6% to 90 billion KRW last year.

Able C&C also carried out restructuring of inefficient stores last year, closing a total of 164 stores. The company explained that although sales decreased and losses widened significantly due to cost processing from the restructuring, significant profit improvement is expected this year as a result of the restructuring.

The deteriorating performance of three companies acquired by Able C&C in 2018 and 2019?M Factory, Jea H&B, and GM Holdings?also affected last year’s sales. At the time, steady growth of the three companies was expected given the business environment, but due to the impact of COVID-19, the results fell short of expectations.

In particular, Jea H&B’s duty-free store sales account for an absolute proportion, and the company suffered a major blow as duty-free store operations were sluggish due to COVID-19. Accordingly, Able C&C explained that the goodwill from the acquisitions of each company was impaired, which expanded the net loss for the period.

Able C&C plans to accelerate its structural improvement this year based on the growth of its online division and strong performance in overseas markets last year.

Able C&C recorded sales of 53.5 billion KRW in the online division last year. This represents a 39.7% growth compared to 38.3 billion KRW in 2019. The sales proportion nearly doubled from 12% to 23.7%. The comprehensive online cosmetics mall ‘My Nunk’ surpassed 1 million mobile application downloads in December last year, just eight months after its launch.

Additionally, the overseas division posted sales of 68.7 billion KRW last year. Although this is a 13.6% decrease compared to the previous year, Able C&C stated that considering the difficult business environment overseas due to COVID-19 and other factors, this is a commendable performance.

In particular, the Japan subsidiary recorded its highest-ever sales of 38.6 billion KRW. In the North and Central American regions, sales reached 7.4 billion KRW, showing significant growth compared to 4.3 billion KRW the previous year. The European region also recorded sales of 10.9 billion KRW, a 31.3% increase from 8.3 billion KRW the previous year.

An Able C&C official said, "This year, we plan to continuously pursue three strategies: expanding overseas markets, strengthening the online division, and optimizing offline operations, aiming for a sales rebound."