Hanssem launches new 'Kitchen Bach' product after 4 years... Will it drive Rehouse performance?

Refocusing on Premium Brands
Strengthening Leadership in the Kitchen Interior Market

Hanssem is launching a new product for its premium kitchen furniture brand 'Kitchen Bach' for the first time in four years, aiming to capture the premium market. Since being acquired by a private equity fund, the company has focused on profitability management centered on mid-to-low-priced lines through various business restructuring methods. However, as sales in the Rehouse (remodeling) sector continued to decline, Hanssem is now seeking a rebound by emphasizing quality, its core competitiveness.

According to industry sources on the 18th, Hanssem will release a new Kitchen Bach product in April. Kitchen Bach is Hanssem's top-tier kitchen furniture brand, and this is the first new product launch since October 2021. Reflecting the housing trend of increasingly higher ceiling heights, the new product is reportedly larger than previous models and features enhanced material quality.

Since the management rights were transferred to IMM Investment, a private equity fund, in 2021, Hanssem has focused on improving cost-effectiveness. The strategy maximized market share by enhancing price competitiveness based on a large-scale production system. The integration of the previously separate Kitchen Bach Business Division with the Rehouse Business Division was also part of this approach.

While Hanssem hesitated in the premium market, domestic and international competitors and small-to-medium brands aggressively entered the market with premium strategies, leading to changes in market share. An industry insider said, "Many companies targeting the premium market emerged while Hanssem's former employees were active across the industry during the period Hanssem vacated this segment." Consequently, there is reportedly growing concern within Hanssem that its brand position in the kitchen furniture market could be shaken.

The sluggish performance of the Rehouse division is also considered a contributing factor. Hanssem's Rehouse division sales decreased by about 37%, from 704.2 billion KRW in 2021 to 441.6 billion KRW in 2023. Cumulative sales up to the third quarter of last year were 290.8 billion KRW, and even when including fourth-quarter results, a year-on-year decline appears inevitable. Despite overall market contraction due to reduced moving demand caused by high interest rates and decreased new housing supply, concerns have arisen that Hanssem's core business is losing competitiveness.

Hanssem's launch of this premium new product is interpreted as a strategy to strengthen competitiveness in the Rehouse division's B2C (business-to-consumer) market and to further solidify its position as the number one kitchen furniture brand. Kim Yoo-jin, CEO of Hanssem, emphasized in this year's New Year's address, "We will strengthen the fundamental competitiveness of our core business to secure growth momentum."