Cowell Fashion Acquires Logen Delivery for 340 Billion KRW... Strengthening Fashion Commerce

Acquisition of 100% Stake in 4th Largest Domestic Courier Market Player Logen Courier
Establishment of Integrated Logistics Platform with Affiliates within Daemyung Chemical Group

[Asia Economy Reporter Lim Hye-seon] Cowell Fashion announced on the 9th that it has decided to acquire 100% of the shares of Logen Delivery. Through its subsidiary special purpose company (SPC) CF Investment, it signed a stock purchase agreement to acquire 100% of the shares held by the Hong Kong-based private equity firm Baring Private Equity. The acquisition amount is 340 billion KRW.

Logen Delivery is the 4th largest company in the domestic courier market. As of last year, its sales amounted to 512.8 billion KRW, with an average annual growth rate of 14% over the past five years. Logen Delivery has built a logistics platform specialized for small and medium-sized shippers, giving it an advantage in handling irregular-sized volumes. Notably, 75% of the total handled volume comes from small and medium-sized shippers, and 85% of the volume is generated from e-commerce channels, which clearly differentiates it from the three major courier companies affiliated with large conglomerates.

Cowell Fashion cited the decision to acquire Logen Delivery’s shares as driven by "the inherent growth of the courier industry due to the continuous expansion of e-commerce and the strengthening of fashion commerce through the establishment of an integrated logistics platform with affiliates within the Daemyung Chemical Group, to which Cowell Fashion belongs."

First, Cowell Fashion focused on the growth potential of the courier industry due to changes in lifestyle paradigms.

With the increase in single-person households and dual-income families, the spread of non-face-to-face consumption, the expansion of direct delivery from production sites, and overseas direct purchases, the e-commerce market size is expected to grow at an average annual rate of 16.3% from 2019 to 2024. According to Statistics Korea, the transaction amount of domestic online shopping malls reached approximately 160 trillion KRW last year, a 69% increase compared to 2017. Considering that over 85% of Logen Delivery’s volume is generated from e-commerce shopping, it is expected to continuously benefit from market growth.

Additionally, with the normalization trend of courier transportation prices, the environment of the courier industry is changing favorably, and Logen Delivery’s value is expected to increase further due to the changed environment and its differentiated services. In the second half of this year, the third investment in the Bucheon terminal will be completed, and an auto sorter will be additionally installed to cope with the growing volume in the metropolitan area.

Cowell Fashion plans to strengthen fashion commerce by building infrastructure with its own company and e-commerce affiliates within the Daemyung Chemical Group.

First, synergy is expected with Cowell Fashion’s own mall, 'CowellFashion.com.' Cowell Fashion, which has a high contribution rate from non-face-to-face channel sales, saw its online channel sales contribution grow gradually to 16% last year.

They plan to secure delivery volumes from comprehensive shopping malls operated by the Daemyung Chemical Group such as Fashion Plus, Style Crew, and Moda Outlet Mall, as well as from own-brand malls operated by various online brands, and establish a 3PL fulfillment integrated logistics platform together with logistics operator Logis Valley SLK.

The acquisition funds will be raised through Cowell Fashion’s cash reserves and long-term borrowings. A Cowell Fashion official stated, “We do not plan any capital raising that would dilute stock value, such as rights offerings or mezzanine issuance,” adding, “Even after the acquisition, we will maintain a stable financial ratio with a debt ratio below 100%.” Furthermore, “Based on last year’s financial statements, simply combining the figures would result in sales of 939.2 billion KRW and operating profit of 109.2 billion KRW, significantly enhancing shareholder value.”

Lim Jong-min, CEO of Cowell Fashion, said, “We decided on the acquisition to lay the foundation for sustainable growth by equipping a high-profit logistics platform through collaboration with affiliates, driven by growth expectations from the favorable macro environment of the courier industry and Cowell Fashion’s high understanding of e-commerce.”

This content was produced with the assistance of AI translation services.