This article was posted on the ChosunBiz MoneyMove (MM) site at 2:57 p.m. on Sep. 11, 2025.
Mullawear, considered Korea's first-generation athleisure brand, has begun looking for a new owner before its rehabilitation plan is approved. It has been about eight months since it filed for corporate rehabilitation in January due to worsening finances, and it is understood that it has also begun accepting letters of intent (LOIs) for selecting a buyer.
According to investment banking (IB) sources on the 11th, Mulla, the operator of Mullawear, recently obtained permission from the Seoul Bankruptcy Court to pursue mergers and acquisitions (M&A) before approval of the rehabilitation plan, and has formalized the process to sell its management rights. Accounting firm Samjong KPMG was selected as the lead advisor for the sale.
Pre-approval M&A is a method in which an acquirer participates before the adoption of a rehabilitation plan to inject funds early and restore normal operations. Mulla had earlier filed for corporate rehabilitation in January and submitted an application to the court in June seeking permission for pre-approval M&A.
Mullawear, operated by Mulla, is a leggings brand launched in 2011 that gained popularity alongside the growth of the athleisure market. It was once considered one of the three major athleisure brands along with Andar and Xexymix, but it has continued to post losses amid intensified competition.
In fact, Mulla turned to a loss in 2020 and continued to record operating losses for four consecutive years through last year. Cumulative losses exceed 39.9 billion won, and by the end of 2022 Mulla's total equity had already fallen into negative territory, resulting in full capital erosion.
Mulla is reportedly planning to pursue pre-approval M&A using a stalking horse approach, in which it selects a preferred bidder to sign a conditional acquisition agreement first while also conducting an open auction. Samjong KPMG has started distributing an investment information memorandum and accepting LOIs.
Some expect that Mulla's management rights could be sold as early as this year. While due diligence in typical M&A can take a long time, the rehabilitation process requires all creditors to file claims, which can speed up the sale process.
An IB industry official said, "Once the prospective acquirer is decided, only the submission of the rehabilitation plan and the court's final approval remain," adding, "I understand that creditors, including Korea Development Bank, agreed to the pursuit of pre-approval M&A in the Seoul Bankruptcy Court's opinion inquiry."