[Second-Generation Succession Begins] ⑦ The Hansae Family's Tangled Shareholding Puzzle... Succession Structure Leaves Room for Disputes

Yes24 Outage Amid Share Transfer to Chairman Kim Dongnyeong's Eldest Daughter
Small Gap in Sibling Shareholdings; Third Generation and Daughters-in-law Also Hold Stakes
Group Performance Lags Due to Fashion Industry Slump, Seeking Breakthrough with New Business via M&A

The second-generation management of the Hansae Yes24 Group is now in full swing. Dongnyeong Kim, Chairman of Hansae Yes24 Holdings, is currently transferring shares to his three children as part of the group’s succession process. While there are evaluations that the second-generation management system is being established stably, some analysts point out that the relatively small gap in shareholdings could lead to potential management disputes in the future.

Sukhwan Kim, Vice Chairman of Hansae Yes24 Holdings; Ikhwan Kim, Vice Chairman of Hansae Corporation; Jiwon Kim, CEO of Hansae MK.

Yes24 Outage Raises Suspicions Over Share Transfer

According to the Financial Supervisory Service’s electronic disclosure system on June 26, Jiwon Kim, CEO of Hansae MK, received 2 million shares (a 5% stake) in Hansae Yes24 Holdings from Chairman Dongnyeong Kim on June 12. Hansae Yes24 Holdings is the holding company of the Hansae Group. As a result of this transfer, CEO Kim’s stake in Hansae Yes24 Holdings increased from 5.19% to 10.19%, while Chairman Kim’s share decreased from 16.99% to 11.99%. Based on the closing price of 4,140 KRW on June 12, the value of the transferred shares amounts to 8.3 billion KRW.

This is the first time in five years since 2019 that Chairman Kim has transferred Hansae Yes24 Holdings shares to his eldest daughter. Now 80 years old, Chairman Kim has consistently distributed shares to relatives since the late 2010s as part of the succession process. This latest transfer is also interpreted as part of the succession plan.

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However, the timing of this transfer has sparked controversy. Just prior to the transfer, on June 9, Yes24?a core affiliate of Hansae Yes24 Holdings?suffered a ransomware attack that caused a system outage. The company failed to issue a timely apology after the incident, and even by June 16, a week later, had not fully restored its systems, drawing heavy criticism from the public.

In this context, some shareholders criticized the share transfer, claiming the company was focused on succession rather than responsible crisis management. Others raised suspicions that the transfer was timed to take advantage of a drop in share price for tax benefits. Gift tax is calculated based on the average closing price over 120 days (60 days before and after the transfer). The lower the share price, the lower the tax burden. Hansae Yes24 Holdings’ share price had risen to 4,350 KRW after the start of the year, but fell about 5% to 4,140 KRW on the day of the transfer. The company explained, “This is simply part of a planned share transfer and is unrelated to the Yes24 incident.”

First and Second Sons Hold Over 20% Each in Holding Company... Daughters-in-law and Grandchildren Are Also Shareholders

Hansae Group has divided its affiliates among its second-generation management based on four main business pillars: publishing, apparel manufacturing and development (ODM/OEM), domestic brands, and mobility. Sukhwan Kim, Vice Chairman of Hansae Yes24 Holdings and the eldest son, oversees the publishing and content sector?including Yes24 and Donga Publishing?formulating group strategy and managing core businesses. Ikhwan Kim, Vice Chairman of Hansae Corporation and the second son, is responsible for Hansae Corporation, which specializes in apparel ODM/OEM, as well as Hansae Mobility, the group’s mobility affiliate. The eldest daughter, Jiwon Kim, serves as CEO of Hansae MK, leading the apparel brand business.

The holding company, Hansae Yes24 Holdings, effectively controls the entire group by holding stakes in Yes24 (50.01%), Hansae Mobility (85.27%), Hansae Corporation (50.49%), Hansae MK (69.15%), and Donga Publishing (100%).

As for the holding company’s share structure, Sukhwan Kim is the largest shareholder with 25.95%, followed by Ikhwan Kim with 20.76%, and Jiwon Kim with 10.19%. Chairman Kim holds 11.99%. Including the shares held by the chairman’s spouse, children, daughters-in-law, and grandchildren, related parties collectively own 79.68%, solidifying the family’s control over the group.

Chairman Kim’s spouse, Youngsoo Jo, Honorary Director of the Hansae Yes24 Cultural Foundation, holds 1.95%. The two daughters-in-law, Soomi Baek (1.25%) and Jihye Koo (1.16%), also own shares. Sukhwan Kim’s children?Siyoon Kim (0.25%), Ayoon Kim (0.25%), and Kyumin Kim (0.25%)?as well as Ikhwan Kim’s two sons?Kyuhyun Kim (0.14%) and Kyujun Kim (0.25%)?are also shareholders. Kyumin Kim, born in 2024, received shares from his grandfather in March of this year, together with his older sisters Siyoon and Ayoon, and cousin Kyujun Kim.

What stands out is the share structure among the siblings. In many cases, they own more shares in affiliates managed by their siblings than in the companies they directly manage.

For example, Ikhwan Kim’s son, Kyuhyun Kim, holds a 5.49% stake in Hansae MK?led by his aunt, Jiwon Kim?which is more than CEO Kim herself (4.94%) and her son, Gunhee Park (0.25%). This is the result of Hansae Dream, a children’s clothing company previously owned by Kyuhyun Kim, being merged into Hansae MK in 2022. On the other hand, Gunhee Park holds a 1.05% stake in Yes24, which is more than his mother.

Looking at the shareholding ratios in Hansae Yes24 Holdings, the difference between Sukhwan Kim (25.95%) and Ikhwan Kim (20.76%) is only 5.19 percentage points. While the group maintains that “the children have a harmonious relationship” and denies the possibility of disputes, some believe the current share structure leaves room for potential conflict.

Children Take the Helm, But Performance Falls Short

While Hansae Group has outwardly completed its transition to second-generation management, its performance has not met expectations. Hansae Yes24 Holdings posted sales exceeding 3 trillion KRW in 2022, but this dropped to around 2.8 trillion KRW last year. Operating profit also declined from 193 billion KRW to 152.2 billion KRW over the same period.

The biggest factor was Hansae Corporation, a core affiliate. Due to weakened global demand for apparel, sales fell by 18% from over 2.2 trillion KRW in 2022 to 1.7978 trillion KRW in 2024, with operating profit dropping by 21%. Over 95% of total sales come from North America, but the global economic downturn led major clients to reduce orders. Although the company benefited from a favorable KRW-USD exchange rate, this was not enough to offset the decline. Major clients of Hansae Corporation include GAP, Carhartt, and American Eagle. Hansae Mobility, which operates an auto parts business, was incorporated as an affiliate last year through an M&A. However, it is expected to take more time before it significantly contributes to performance. As of last year, Hansae Mobility’s sales were 505.1 billion KRW, and operating profit was 900 million KRW, representing year-on-year declines of 12% and 92%, respectively.

Hansae MK is also struggling. Due to weakened consumer sentiment and sluggish domestic demand, the company has been unable to avoid losses. In April, it launched an emergency rights offering to raise 11.7 billion KRW (14.7 million shares) for facility and operating funds. The issue price is 798 KRW per share, with subscription for existing shareholders and the employee stock ownership association, followed by a public offering on June 30. Hansae MK recently decided to withdraw its children’s clothing brand ‘Curly Sue’ and restructure its business around ‘Moi Moin’ and ‘Playkids Pro (Nike Kids)’. The funds raised will be used to open new stores for its operating brands, renovate interiors, and purchase inventory.

Yes24 performed relatively well. Last year, its sales rose 2% year-on-year to 671.1 billion KRW, and operating profit surged 126% to 16.3 billion KRW. The strong performance was driven by robust book sales following author Han Kang’s Nobel Prize in Literature win, as well as growth in entertainment businesses such as concert and movie ticketing. However, this year’s outlook is uncertain due to the impact of the hacking incident. Compensation must be provided to consumers affected by the breach. Yes24 has announced measures such as refunding 120% of the ticket price for affected performances and awarding additional points to affected customers.