[Person人] Chairman Jeong Ji-seon, 'Aggressive DNA' This Time Focused on Cosmetics

Swiss Technology-Backed 'Oera' Luxury Gambit
First Achievement of 'Vision 2030'
Hansome Acquisition as a Representative Management Style

[Asia Economy Reporter Lim Hye-seon] Chung Ji-sun, Chairman of Hyundai Department Store Group (photo), has taken a step closer to the 'Vision 2030' future blueprint by officially entering the cosmetics business. The goal is to double sales by adding new future growth businesses such as beauty, healthcare, bio, and eco-friendly sectors to the existing core businesses of distribution, fashion, and living/interior, aiming to achieve sales of 40 trillion won by 2030.

Cosmetics Launch, the First Button of ‘Vision 2030’

Hyundai Department Store Group’s first cosmetics brand, ‘Oera (oera),’ is the first outcome of ‘Vision 2030.’ Chairman Chung showed interest in the cosmetics business starting in 2017. For Hansome employees, who had been focused solely on fashion, the cosmetics business was unfamiliar and new. Chairman Chung urged, "Do not rush, but focus on developing products that meet customer expectations." He also provided full support, including securing differentiated raw materials and technology through mergers and acquisitions (M&A).

Hansome employees approached the project cautiously. It took two years just to decide on the brand concept. Hansome conducted surveys on various aspects such as scent, texture, and usability with 3,000 customers interested in cosmetics. They decided to create a luxury skincare brand based on Swiss technology, and the staff immediately headed to Switzerland. They contacted Dr. Sven Golla, one of the world’s most influential cosmetics experts, and collaborated on everything from brand concept to ingredient development. They also worked with a Swiss cosmetics research institute known for excellent skincare manufacturing technology. Thus, ‘Oera’ is a brand that fully reflects Chairman Chung’s management philosophy.

After Acquiring Hansome

Hyundai Department Store Group started in 1971 as a supermarket in Apgujeong, Seoul, with sales of 84 million won. In 50 years, it has grown into a large corporation with sales of 20 trillion won and ranked 21st in the business world (assets of 18.3 trillion won). This is the result of Chairman Chung’s ‘steadfast management’ since he took office as group chairman in 2008.

The acquisition of ‘Hansome’ in 2012 is a representative M&A case that reveals Chairman Chung’s management style. At the time, there was much skepticism internally about entering the fashion business due to the domestic fashion market downturn, but Chairman Chung personally met with Hansome’s then-president Jung Jae-bong and negotiated, saying, "The growth potential is high." After the acquisition, Chairman Chung sent Kim Hyung-jong, with whom he had a long relationship, to Hansome and asked him to "take a long-term view" and "maintain the image of a ‘prestigious women’s fashion house.’" Sales stagnated after the acquisition, with 496.3 billion won in 2012, 470.8 billion won in 2013, and 524.8 billion won in 2014. Operating profit also sharply declined. Operating profit, which was 98.4 billion won in 2011, the year before acquisition, dropped to 71 billion won in 2012 and 50.3 billion won in 2013. Some even called it the ‘winner’s curse.’

"Invest More When Times Are Tough"

Despite concerns around him, Chairman Chung remained unwavering. He emphasized that ‘research and development (R&D)’ for future growth of fashion companies means securing professional designers, increasing the number of designers from about 100 to nearly three times that. He also pushed for launching new brands and renewing existing ones. Additionally, in 2017, he acquired SK Networks’ fashion division to further expand the fashion business. As a result, sales last year reached 1.2 trillion won, more than doubling eight years after the acquisition.

Chairman Chung is the type to ‘tap the stone bridge before crossing.’ He reviews problems in advance before entering a business and learns from competitors’ mistakes. Once he starts a business, there is no giving up. With a spirit of determination, he aggressively pushes forward. Although the outlet business started six years later than competitors Lotte and Shinsegae, it has settled by opening stores in landmark locations such as Gimpo, Pangyo, Dongdaemun, and Songdo.

Despite the variable of COVID-19, Hyundai Department Store has been continuously expanding its scale this year. Last year, it opened Hyundai Premium Outlet Daejeon and Hyundai Premium Outlet Space One, and this year it opened The Hyundai Seoul, receiving evaluations for presenting a new future for distribution. As a latecomer, it also opened downtown duty-free shops in Seoul (February) and Incheon Airport (September) last year. This contrasts with competitors who have been downsizing by closing underperforming stores.

A Hyundai Department Store Group official said, “Rather than being swayed by changes in the internal and external management environment, we establish mid- to long-term business strategies every 3 to 5 years and promote new projects based on them. Through this, we will secure future growth engines and contribute to revitalizing the domestic economy through job creation.”

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