17-Year-Old Granddaughter Steps In... The Unique Third-Generation Succession of 'The North Face' Youngone Group [Second-Generation Management Begins] ⑧

Vice Chairman Sung Raeun's Daughter Koo Seojin
Acquires 30% Stake in Ray&Co This Year... Eyes on Future Moves
Vice Chairman Sung Raeun Secures Succession and Inheritance Tax Funds
Through Top-Tier YMSA in Ownership Structure
Designated as a Large Business Group, but Expected to Be Excluded Next Year

Cha Eunwoo, The North Face Ambassador, Wearing 'Workway Short-Sleeve Shirt' and 'Workway Shorts'

#Textile and fabric export company YMSA paid out 13 billion won in dividends last year. This amount was more than three times the company's annual standalone operating profit of 3.6 billion won. It was the first dividend in seven years since an 8 billion won payout in 2017. YMSA sits at the top of the ownership structure of Youngone Corporation, which holds the Korean license for the outdoor brand The North Face. In 2023, Sung Kihak, Chairman and CEO of Youngone Holdings and founder of the group, gifted 50.10% of his 100% stake in YMSA to Sung Raeun, Vice Chairman of Youngone Holdings. As a result, the group established a succession structure with the following ownership chain: "Sung Raeun → YMSA → Youngone Holdings → Youngone Corporation & Youngone Outdoor (operator of The North Face) → Scott." At the time, Vice Chairman Sung Raeun borrowed 85 billion won from YMSA to pay the inheritance tax on the stake. YMSA lent Sung Raeun the proceeds from selling a building in Daegu to its subsidiary Youngone Corporation, which led to a Fair Trade Commission investigation into allegations of unfair support during the succession process.

This year, as Sung Raeun's daughter, Koo Seojin, began acquiring shares in Youngone Holdings, the group's succession plan is once again drawing attention. By leveraging a "pyramid ownership structure" centered on unlisted companies, the family is able to transfer the business with relative ease, and in the process, large dividends are funneled to the owner family to fund the succession. Under the revised Commercial Act, it has become more difficult for owner families to concentrate profits in listed companies, which is why the third-generation succession process is under close scrutiny.

Sung Kihak, Chairman of Youngone Corporation, Sung Raeun, Vice Chairman of Youngone Corporation.

According to the Financial Supervisory Service's electronic disclosure system on July 17, Koo Seojin purchased 550 shares of Youngone Holdings on the open market in two transactions this year. On March 27, when Koo first acquired shares, Youngone Holdings changed its largest shareholder from "Chairman Sung Kihak and four others" to "YMSA and five others." Koo, born in 2008, is 17 years old this year. This is the first time a third-generation member of the Youngone Group has been registered as a related party of the largest shareholder.

In April, Koo also received a 30% stake in Ray&Co, an unlisted company wholly owned by her mother, Vice Chairman Sung Raeun. Ray&Co's main businesses are advertising, exhibition, and event planning. Since 2022, it has also operated "House of Tail," a pet clothing brand.

Third-Generation Succession... Will Unlisted 'Ray&Co' Be Used?

Ray&Co, Vice Chairman Sung Raeun's personal company, is attracting attention because unlisted holding companies played a key role in the group's second-generation succession process.

Youngone Holdings is a holding company with more than 80 subsidiaries, including Youngone Corporation, an OEM manufacturer for fashion brands such as The North Face and Lululemon. The group started as Youngone Corporation, an apparel manufacturer founded by Sung Kihak in 1974, and converted to a holding company structure in 2009 after a spin-off. YMSA secured a stake in Youngone Holdings by participating in a paid-in capital increase, and subsequently increased its stake to 29.9% through open market purchases, becoming the largest shareholder of Youngone Holdings.

Chairman Sung Kihak designed the succession by transferring his YMSA stake to his second daughter. While companies typically transfer shares in holding or operating companies during succession, Youngone Group created a pyramid structure and transferred shares in the unlisted company that controls the holding company. Since unlisted company shares are usually undervalued compared to listed company shares, this approach reduces gift taxes and is also advantageous for raising succession funds.

In fact, Vice Chairman Sung Raeun received 6.6 billion won of the 13 billion won dividend paid by YMSA last year. Youngone Holdings and Youngone Corporation are also supporting the succession by increasing compensation to Vice Chairman Sung Raeun. Last year, she received 6.325 billion won from Youngone Holdings and 6.275 billion won from Youngone Corporation, representing increases of 67% and 50%, respectively, compared to the previous year. During the same period, Kim Juwon, Executive Director of Youngone Holdings, saw his compensation rise from 554 million won to 758 million won, an increase rate only half that of Vice Chairman Sung. Meanwhile, Lee Minseok, President of Youngone Corporation, had his compensation increased by 5.41%, from 555 million won to 585 million won.

Vice Chairman Sung Raeun appears to be using her increased compensation and dividends to repay loans from YMSA. Last year, YMSA recovered 13.4 billion won in loans.

Industry insiders believe that Koo Seojin, Vice Chairman Sung Raeun's daughter, will use her stake in the unlisted Ray&Co as a stepping stone for succession. One possible scenario is merging Ray&Co with YMSA to integrate the company into the Youngone Group's ownership structure. Through internal transactions, the unlisted company could be grown and dividends could be used to fund gift taxes. However, as of last year, Ray&Co's sales were only 2 billion won, with an operating profit of 200 million won.

'Designated as a Large Business Group'... Rush to Exclude Affiliates

As of the end of 2023, Youngone Group's total assets exceeded 6 trillion won, prompting the Fair Trade Commission to designate it as a "public disclosure target business group (large business group)" last year. The Fair Trade Commission requires groups with more than 5 trillion won in assets to make regular disclosures, including cross-shareholdings and internal transactions among affiliates, and closely monitors unfair support and private interests of controlling families.

For this reason, just before being designated as a large business group in 2023, Youngone Group failed to properly report its affiliated companies owned by relatives, leading to a Fair Trade Commission investigation last year for "false submission of affiliate companies." This coincided with the start of Chairman Sung Kihak's succession process.

Youngone Group is expected to avoid large business group designation next year. According to its second report this year, Youngone Group's total fair assets stand at 5.024 trillion won, down about 1.06 trillion won from 6.089 trillion won last year. This is because 32 companies, including Hwashin and Hwashin Jeonggong, received recognition for independent management by relatives, reducing the number of affiliates from 50 to 20. Hwashin is an auto parts company founded by the late Chung Ho, an uncle of Chairman Sung Kihak, specializing in automotive chassis and body parts. With the number of affiliates dropping to 20, Youngone Group's overall ranking also fell. In 2025, it ranked 92nd out of the 92 groups designated as public disclosure target business groups.

After being designated as a business group this year, "EK Tech" and its subsidiary "KR Consulting" were further excluded from the group. Due to liquidation, their assets will not be included in next year's calculation. As of 2024, EK Tech and KR Consulting had total assets of 900 million won and 2 billion won, respectively.

EK Tech is a personal company run by Sung Kahun, Chairman Sung Kihak's youngest daughter, who holds a 79.19% stake. The company has operated the eco-friendly apparel brand "Edit Plus." In 2024, Edit Plus posted sales of 1.2 billion won and an operating profit of about 40 million won. In the past, EK Tech was known as the de facto owner of the "The North Face Edition" brand, a socially responsible consumption project by Youngone Outdoor, which led to controversy over unfair support for the owner family.

Clouds Lift Over Earnings... But 'Scott' Remains a Wild Card

Vice Chairman Sung Raeun graduated from Stanford University in the United States and joined Youngone Corporation in 2002, entering the family business. She served as Director of Global Compliance CSR and Executive Director at Youngone Corporation, and became CEO of Youngone Holdings in 2016. She is regarded as having proven her management capabilities.

Youngone Holdings posted sales of 1.8 trillion won in 2015, which grew by 150% to 4.53 trillion won in 2022. Last year, it recorded 4.306 trillion won in sales, marking three consecutive years above 4 trillion won. This was due to strong performance by Youngone Outdoor, a subsidiary of Youngone Holdings, which saw a surge in sales of The North Face during the COVID-19 pandemic, as well as solid sales from Youngone Corporation, its OEM subsidiary.

The wild card is the bicycle company "Scott." Although Youngone expanded its control after settling a dispute with the second-largest shareholder earlier this year, Scott's performance shows no sign of improvement. During the COVID-19 pandemic, bicycle demand in Europe surged, and Scott played the role of a cash cow, posting 1.3975 trillion won in sales and 176.5 billion won in operating profit in 2022. However, performance plummeted from the following year. Last year, Scott recorded sales of 953.6 billion won and an operating loss of 212.8 billion won. In the first quarter of this year, it continued to post a loss, with an operating loss of 28.1 billion won.

Some analysts expect Scott to remain in the red this year as well. Hyung Kwonhun, a researcher at SK Securities, noted, "At the end of the first quarter, inventory stood at about 570 billion won. This is still high compared to the pre-COVID-19 inventory level of 200 to 300 billion won, and considering seasonality, it could increase further in the second half." A Youngone Corporation official stated, "This year, our goal is to reduce the size of the deficit compared to last year, and we are faithfully executing our business strategy to achieve this."