Jaahn Cosmetic, High-Intensity Business Division Restructuring... "Expecting Profit Turnaround This Year"

[Asia Economy Reporter Hyunseok Yoo] Jaahn Cosmetic announced on the 31st that it has completed a high-intensity business division restructuring for management efficiency.

The company boldly eliminated imported brands, which were the main cause of previous losses, and reorganized the structure focusing on its own brands with high profit margins, expecting to achieve a performance turnaround starting this year.

Most of last year's losses occurred in 11 imported distribution brands such as "Kiss Me" and "Canmake." On the other hand, private brands (PB) like "Lilybyred," "Haeserin," and "Dearown" achieved profitability.

A company official said, "Although Japanese imported brands contributed to the overall sales increase of Jaahn Cosmetic, their profit margins were extremely low, and excluding selling and administrative expenses such as advertising costs, the more they sold, the greater the losses became. When profits were achieved through high-margin PB brands, the imported brands offset those profits and turned the results into losses, worsening performance."

Jaahn decided to boldly exclude all imported brands except for the only profitable American brand "Okips," leaving only PB brands to focus on "selection and concentration." Additionally, the internal organizational structure, which was previously divided by work areas such as product development, design, and sales, was reorganized into "Brand Teams 1, 2, and 3" to strengthen each brand's unique identity.

The brands remaining after restructuring are seven: "Lilybyred," "Dearown," "Ereuno Cosmetic," "Haeserin," "Okips," "Hydrogen Cosmetic," and "Gentle Camo." Six PB brands and one imported brand remain. The company will no longer continue with 13 existing imported distribution brands such as "Kiss Me," "Canmake," "BCL," "K-Palette," and "Diane."

A company official added, "In the past three years, the top four brands in sales among Jaahn Cosmetic's operating brands were 'Kiss Me,' 'Lilybyred,' 'Haeserin,' and 'Canmake,' showing that 'Kiss Me' and 'Canmake' had a high sales contribution. However, since the loss margin from these two brands was very large, from a mid- to long-term perspective, the elimination of imported brands was essential for management efficiency."

Meanwhile, Jaahn Cosmetic has started to liquidate inventory through the online and mobile cosmetic platform "Celecon Cosmetics" and the global healthcare platform "Celecon Health," operated respectively by its parent company Jaahn Group and Jaahn Bio. Going forward, the company plans not only to liquidate inventory but also to shift its main sales channels from offline H&B stores to online and mobile platforms and overseas exports.

A company official stated, "PB brands such as Lilybyred have already built a loyal fan base with excellent quality, affordable prices, and innovative marketing. If we increase the online and mobile sales ratio by collaborating with Celecon Cosmetics, which has a solid position as a cosmetic platform, we expect the sales and net profit of PB brands to accelerate."