[Exclusive] Hanssem Sells "First Store" Bangbae Branch for 39 Billion KRW

Symbolic First Store Opened in 1997 Sold Off
Asset Securitization Accelerates After IMM Acquisition
Business Structure Reform Pursued Alongside Dividend Expansion

Hanssem has sold its first offline store, "Hanssem Design Park Bangbae Branch," for 39 billion KRW. The sale of the Bangbae Branch, which had been regarded as a symbol of Hanssem's offline presence, is part of the company’s asset securitization strategy.

According to industry sources on May 15, Hanssem sold the building and land of the Bangbae Branch, located in Seocho-gu, Seoul, to DDI Bangbae PFV this past February. The site is expected to house a senior residential facility, a joint project between SK D&D and global private equity firm Warburg Pincus.

Hanssem Design Park Bangbae Branch is a store that represents the company’s growth history. Hanssem, which started as a kitchen furniture specialist in 1974, expanded into a comprehensive interior company and opened the branch in 1997. At the time, the company directly purchased a 1,592.3-square-meter (approximately 482 pyeong) plot across from its headquarters and constructed a building with one basement floor and five above-ground floors, with a total floor area of 5,117 square meters (about 1,548 pyeong).

Hanssem Design Park Bangbae Branch. Hanssem

This sale is in line with the asset securitization strategy of IMM Private Equity (IMM PE), Hanssem’s largest shareholder. Since 2023, IMM has included both the Bangbae Branch and the nearby Bangbae office building as targets for securitization; however, it is known that progress with the Bangbae office building has been difficult due to its complex ownership structure. Last year, Hanssem sold its Sangam office building in Mapo-gu, Seoul, to Gravity Asset Management for about 320 billion KRW and has continued to use the building under a "sale and leaseback" arrangement, paying rent after the sale.

IMM acquired Hanssem for about 1.4413 trillion KRW in 2022. At the time, Hanssem’s share price was 96,000 KRW, but IMM paid 221,000 KRW per share to secure a 27.71% stake (about 6.52 million shares) held by Honorary Chairman Cho Changgeol. However, after the acquisition, Hanssem’s performance deteriorated as both demand for furniture slowed and the real estate market slumped. Sales, which stood at 2.2312 trillion KRW in 2021, fell to 1.9084 trillion KRW last year, and the company recorded a net loss of 27.9 billion KRW in the first year after the acquisition. As of the previous day's closing, Hanssem’s share price is 41,250 KRW.

Hanssem is expanding its dividend capacity using the cash secured through asset securitization and cost reduction efforts. Last year, Hanssem paid out 140.6 billion KRW in dividends, nearly double the 74.2 billion KRW paid in 2023. However, cash flow from operating activities amounted to only 48.9 billion KRW in the same year. As a result, the company increased dividends using liquidity secured mainly through asset sales rather than cash generated from its core business.

Hanssem plans to continue its focus on asset efficiency while also fundamentally restructuring its profit model by improving its supply chain and operational efficiency. The company aims to achieve tangible profitability improvements by restructuring around competitive products.