Sales of 1.5857 trillion KRW, Operating Loss of 19.9 billion KRW
Premium B2C Furniture and Differentiated B2B Furniture Strategy
Confident in Turning Profitable This Year
Hyundai Livart recorded an operating loss in 2023, following 2022. Although operating profit improved mainly in the B2B (business-to-business) furniture business, the downturn in the construction industry held back performance.
On the 7th, Hyundai Livart announced that last year it posted sales of 1.5857 trillion KRW and an operating loss of 19.9 billion KRW. Sales were the highest ever, increasing by 6% compared to the previous year. The operating loss continued for the second consecutive year. However, the deficit narrowed by 28.8% compared to the previous year. The net loss for the period was 27.8 billion KRW.
Hyundai Livart, a subsidiary of Hyundai Department Store Group, recorded its first operating loss in 2022, ten years after joining the group. Rising raw material prices and a sluggish real estate market dealt a direct blow to its performance.
However, Hyundai Livart is confident of returning to profitability this year. It recovered profitability in the B2B furniture business last year, and the construction of the Saudi Arabia ‘Amiral Project’ oil refinery plant, worth 66.3 billion KRW and ordered at the end of last year, is scheduled to proceed this year. The Amiral Project is a petrochemical plant construction project promoted by Saudi Aramco, the world’s largest oil company, in the Jubail area of eastern Saudi Arabia.
In the furniture business last year, B2B furniture led the growth. Sales in this business segment reached 513.3 billion KRW, up 34.6% from the previous year. This accounted for more than half of the total furniture business sales. Targeting the built-in and office markets was effective. On the other hand, B2C (business-to-consumer) furniture sales last year were 312.7 billion KRW, slightly down from the previous year, affected by the sluggish performance of the interior brand ‘Jipterior’.
Hyundai Livart plans to actively target the B2C furniture sector this year. It intends to enhance brand value and awareness through TV advertisements and other means. In particular, it aims to increase profitability through its premium furniture line. Last October, it launched the ‘Livart Meister Collection,’ a premium furniture line using solid wood.
The B2B furniture sector aims to expand profits by improving cost ratios. It expects the growth trend in office furniture sales to continue this year. In office furniture, as work styles shift from remote work to office attendance, demand is increasing for flexible work environments in lounge-style spaces by removing existing partitions. Accordingly, Hyundai Livart plans to target the B2B market through space consulting and differentiation of lounge spaces.
A Hyundai Livart official explained, "Operating profit improved mainly in the B2C and office furniture business sectors, but considering delays in the construction schedules of some large-scale built-in apartment sites, we recognized provisions from a more conservative perspective, resulting in an operating loss."
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