Hyundai Department Store Group Acquires Global Furniture and Mattress Company Zinus for 774.7 Billion KRW

Hyundai Department Store Acquires 30% Stake in Jinus, Signs 120 Billion KRW New Share Subscription Agreement
Hyundai Department Store Group Expands into Global Furniture and Mattress Business Following Furniture and Building Materials via M&A
Strengthens Competitiveness Using Group Financial Power and Affiliate Synergies... Expands Domestic Business Collaborating with Department Store

Hyundai Department Store New Headquarters Building Exterior.

[Asia Economy Reporter Yuri Kim] Hyundai Department Store Group is acquiring Zinus, a global online furniture and mattress company. With Zinus, known as the 'Amazon Mattress' for its global recognition and competitiveness, Hyundai Department Store Group plans to transform from the largest total living and interior company in Korea’s living business sector into a 'global lifestyle company.'

Hyundai Department Store Group announced on the 22nd that Hyundai Department Store will acquire a 30.0% stake (including management rights) in Zinus held by founder Yoonjae Lee and others for 774.7 billion KRW. On the same day, Hyundai Department Store held a board meeting and approved the stock acquisition contract for Zinus. This is the largest merger and acquisition (M&A) in Hyundai Department Store Group’s history. Separately from the equity acquisition, Hyundai Department Store also signed a contract to acquire new shares worth 120 billion KRW with Zinus to establish a third factory in Indonesia and strengthen its financial structure.

A Hyundai Department Store Group official explained, "We have finalized the acquisition of Zinus, a global online business innovation company, to expand the department store business, which has been focused on offline and domestic distribution, into 'online' and 'global' sectors, and to secure growth engines that can complement the department store business in its mature phase." He added, "We judged that it aligns with the group’s business direction as it offers high growth potential while enabling business synergy with the group’s living division."

He continued, "Securing new future growth engines for Hyundai Department Store will be positive not only for corporate value but also for enhancing shareholder value. In the mid to long term, leveraging Zinus’s global network and online distribution channels will play a crucial role as a foothold for the group’s global market expansion."

Zinus founder Yoonjae Lee reportedly decided to sell to Hyundai Department Store Group after comprehensively considering the company’s sustainable growth potential and business synergy. After selling management rights to Hyundai Department Store Group, Lee will continue to hold some shares and participate in company management as the chairman of the board. Hyundai Department Store Group plans to guarantee 100% employment for all Zinus employees.

Zinus is the global number one online furniture and mattress company, starting in the U.S. in 2006 and currently expanding to Canada, Australia, Japan, the UK, Germany, Spain, and more. It commercialized the world’s first technology to compress and package mattresses in boxes for delivery, dominating the U.S. online mattress market. It holds the undisputed number one position in mattress sales on Amazon, the world’s largest e-commerce platform, and commands a high market share of over 30% in the U.S. online mattress market. It is also the sole mattress supplier to Walmart stores across the U.S. and Canada.

Last year, Zinus recorded sales of 1.1238 trillion KRW (consolidated) and operating profit of 74.3 billion KRW. Mattress sales, its main product, accounted for more than 50% of total sales. Nearly 97% of Zinus’s total sales are from global markets, with about 90% of that from the U.S. market. Sales through online channels such as Amazon account for about 80% of total sales.

With the acquisition of Zinus, Hyundai Department Store Group’s living business division will grow into a global lifestyle company with sales of 3.6 trillion KRW. The business portfolio has expanded by adding Zinus’s global furniture and mattress business to Hyundai Livart’s furniture and interior business, acquired in 2012, and Hyundai L&C’s building materials business, incorporated as an affiliate in 2019. Last year, Hyundai Livart and Hyundai L&C recorded consolidated sales of 1.4066 trillion KRW and 1.11 trillion KRW, respectively.

This M&A reflects Hyundai Department Store Group’s determination to accelerate growth in the living business division, one of the group’s four core business portfolios, alongside distribution, fashion, and food sectors. Last year, the group announced 'Vision 2030,' a future blueprint, setting a goal to double the living business division’s sales to about 5 trillion KRW by 2030 compared to 2021.

The acquisition of global online company Zinus is also expected to boost Hyundai Department Store Group’s 'e-commerce business.' The group pursues a 'specialized mall strategy' that focuses on qualitative growth based on the expertise and differentiation of each affiliate in distribution, fashion, living, and food, rather than integrating online platforms or M&A based on economies of scale. The Zinus acquisition is part of this ongoing specialized mall strategy.

A Hyundai Department Store Group official said, "Acquiring Zinus, which has online-based distribution channels and differentiated product content, is significant because it secures an e-commerce content company that generates both sales and profits based on product competitiveness." He added, "We will continue to strengthen the e-commerce business based on the specialized mall strategy the group is pursuing."

Hyundai Department Store Group plans to upgrade business competitiveness by leveraging its abundant financial resources and synergies with distribution and living affiliates to nurture Zinus into a 'global online number one lifestyle company.' To this end, it plans bold investments in global markets and business cooperation with living affiliates such as Livart and L&C to expand Zinus’s product range beyond mattresses to general furniture including living room, home office, and outdoor furniture. Additionally, it intends to broaden Zinus’s business structure, currently focused on North America, to Europe, South America, Japan, and other regions. The group also plans to drive domestic business expansion for Zinus by utilizing distribution networks of its affiliates such as department stores, home shopping, and duty-free shops.

Based on Hyundai Department Store’s premium image and strong customer base with high purchasing power, the group plans to expand Zinus’s current mid-to-low price business model into the mid-to-high price market and consider entering the high value-added sleep market in the mid to long term. Regarding this, a Hyundai Department Store Group official said, "We are reviewing additional acquisitions or collaborations with sleep technology (SleepTech) specialized companies."

Hyundai Department Store Group stated, "Since announcing 'Vision 2030,' a 10-year future blueprint last year, we have successfully established The Hyundai Seoul and entered the cosmetics business with Hansome, and with the acquisition of Zinus, we have laid another foundation for sustainable growth." The group added, "We will actively pursue investments and M&As in areas aligned with the group’s growth strategy among businesses with expanding future demand, responding to mega trends and changes in consumer patterns."

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