Newnex, Operator of Fashion Platform "Brandi," Files for Corporate Rehabilitation

Filed for Rehabilitation Proceedings with Seoul Bankruptcy Court on the 16th
"Debts Will Be Repaid According to Rehabilitation Process"

Newnex, the operator of fashion platforms Brandi and Hybe, has filed for corporate rehabilitation proceedings with the Seoul Bankruptcy Court.

Corporate Rehabilitation Guidance for Newnex Sellers.

According to industry sources on the 16th, Newnex announced to its sellers on this day, "We are entering court-supervised corporate rehabilitation proceedings," adding, "This decision is not intended to liquidate or halt the company, but rather to restore our financial structure and normalize operations under the management and supervision of the court."

The company continued, "We have made various efforts such as cost reduction, restructuring, and attracting investment, but it has become difficult to handle past debts with our current fixed cost structure alone," and added, "We determined that it is necessary to rationally adjust our debts through the court's rehabilitation process and to continue our business operations in a more stable manner."

According to Newnex's audit report, as of the end of last year, the company had a total capital (net assets) of negative 30.6 billion won, indicating a state of complete capital impairment. Its sales amounted to 19.5 billion won, a 66% decrease from the previous year, and its operating cash flow was negative 9.1 billion won.

This is believed to be due to the recent intensification of competition in the fashion e-commerce market. Newnex stated, "Repayment of past debts will be carried out with court approval in accordance with the rehabilitation process," and added, "Transactions and settlements occurring after the commencement decision of the rehabilitation application will be paid as usual."

An apology letter posted by CEO Jungmin Seo along with guidance on corporate rehabilitation for Newnex sellers.