Musinsa, Once Thriving... Suddenly Enters 'Emergency Management,' Why?

Park Junmo, CEO of Musinsa, Holds Town Hall Meeting on the 15th
"Alert Before a Bigger Crisis"... Declares 'Emergency Management'
Achieved 1 Trillion Won in Sales Last Year
First Quarter Performance Falls Short of Expectations

Fashion platform Musinsa has suddenly entered an emergency management system. Although it achieved sales of 1 trillion won last year and recorded the highest performance in its history, it explained that it took preemptive measures because the first quarter performance this year did not meet expectations. It is interpreted that the emergency management declaration was made considering that the investment sentiment contraction will be prolonged as domestic and international uncertainties have recently increased.

According to the fashion industry on the 17th, Park Jun-mo, CEO of Musinsa, held a town hall meeting for all employees on the 15th and declared an emergency management system. CEO Park emphasized, "The external uncertainties are increasing in various ways," and "The complexity of Musinsa's business is increasing, so we need to be alert before a bigger crisis comes."

Musinsa's transaction amount in the first quarter of this year increased compared to the previous year, but it is known to have fallen short of internal targets. Last year, Musinsa's sales on a consolidated basis increased by 25.1% to 1.2427 trillion won compared to the previous year, and operating profit succeeded in turning to a surplus with 102.8 billion won. The annual transaction amount reaches 4.5 trillion won.

During the emergency management period, Musinsa is expected to order executives to work on weekends and streamline operations by slimming down each organization. CEO Park said, "I don't know how long the emergency management period will last," but added, "If we make bold investments and execute according to a well-organized plan, we will be able to overcome the current situation."

It is interpreted that Musinsa's decision to take out the emergency management card reflects the will of CEO Jo Man-ho. Jo, the founder of Musinsa, resigned from the CEO position in June 2021 and returned to management at the end of March last year. After Jo's return, Musinsa entered the 1 trillion won sales club and is taking steps toward an initial public offering (IPO).

However, recently, consumer sentiment has slowed down and investment sentiment contraction has been prolonged, which seems to have heightened the sense of crisis. If quarterly performance falls short of targets, it could negatively affect the IPO process. In addition, the recent corporate rehabilitation of luxury platform Ballan has increased investment risks. Accordingly, Musinsa is interpreted to have declared emergency management preemptively.