[Asia Economy Reporter Park Soyeon] Modern House, the No.1 company in the domestic home living sector, is scouting for a site near Gangnam Station to establish a large flagship store.
According to the investment banking (IB) industry on the 31st, Modern House is planning to create a large offline store that can become a landmark of Gangnam Station and is searching for a suitable location.
An IB industry insider said, "Modern House showed remarkable growth in offline stores even during the COVID-19 pandemic," adding, "They are working on creating a landmark store near Gangnam Station, where there is heavy foot traffic."
Earlier this year, Modern House opened an offline store in Songcheon-dong, Jeonju, with a total area of about 3,900㎡ (approximately 1,180 pyeong). It is a large store more than half the size of a FIFA K-League recommended soccer field.
Despite the prolonged COVID-19 situation, Modern House has maintained a clear growth trend, supported by the increase in single-person households and the expansion of the home living market by about 10% annually.
Modern House, which owns 123 offline channels, plans to open 12 new stores this year in major distribution companies such as Lotte and Hyundai, as well as in key commercial districts.
Currently, Modern House is on the market for mergers and acquisitions (M&A).
MBK Partners recently appointed Goldman Sachs as the sales advisor and has started the sale process of Modern House. The transaction target is 100% of the shares of MH&Co, the operating corporation of Modern House. The valuation is mentioned to be around 2 trillion KRW.
Modern House is the No.1 company in the home living sector, securing over 50% market share in the domestic market. It sells about 10,000 products ranging from interior accessories to furniture and pet supplies. Its competitors include Mujirushi Ryohin, a Japanese brand that entered Korea in partnership with Shinsegae Group’s brand Jaju and Lotte.
It was launched in 1996 as a business division of E-Land Retail. When E-Land Retail faced a liquidity crisis in 2017, MBK acquired Modern House through a business transfer method for about 686 billion KRW.
Since then, MBK has expanded stores into large department stores such as Lotte, Shinsegae, and Hyundai, and increased the online sales ratio from the previous 5% to 10%, rapidly recovering performance. Sales, which were 334.5 billion KRW in 2018, are expected to exceed 400 billion KRW this year.
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