This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:18 p.m. on May 27, 2026.
As ZINUS, the largest merger and acquisition (M&A) case in Hyundai Department Store Group's history, moved to sell its U.S. production base four years after being folded into the group, post-acquisition aftereffects have resurfaced. ZINUS, once expected to serve as a bridgehead for expanding the group's online and global living businesses, has suffered sluggish results, large goodwill impairments, and even restructuring of its U.S. plant, drawing assessments that it has become the group's "sore finger."
According to the investment banking (IB) industry on the 27th, ZINUS recently decided to dispose of property, plant and equipment related to its Georgia factory held by its U.S. subsidiary "ZINUS USA INC." The disposal amount is 135.3 billion won. As of the end of last year, the book value of the asset was 103.5 billion won, and ZINUS is expected to recognize a disposal gain of about 31.8 billion won through this sale. The counterparty to the transaction is Highline Warren, a U.S. automotive accessories company, and the scheduled disposal date is Aug. 22. ZINUS said the purpose of the plant disposal is "to improve profitability and financial structure by selling a loss-making production facility."
This sale is an extension of the restructuring that was foreshadowed since the end of last year. ZINUS decided in Nov. to halt production at its Georgia plant. The Georgia plant was a base ZINUS built to expand local production in the United States. While the aim was to improve responsiveness to U.S. clients and reduce tariff and logistics risks, rising local labor and operating costs, coupled with a slowdown in U.S. mattress demand, turned it into a loss-making facility.
ZINUS is reorganizing its production system by shifting the Georgia plant's output to existing overseas production bases such as Indonesia. Rather than a simple real estate sale, this plant divestment is seen as effectively abandoning its U.S. local production strategy and reworking its cost structure around low-cost production hubs.
ZINUS was once seen as a new growth engine for Hyundai Department Store Group. In 2022, Hyundai Department Store invested about 879 billion won to acquire a 35.8% equity stake in ZINUS. It acquired a 30% stake held by founder Chair Lee Yoon-jae and others and also issued new shares. At the time, Hyundai Department Store had a blueprint to broaden its business portfolio beyond offline retail centered on department stores and duty-free shops into online, global, and living segments.
However, the report card after acquiring ZINUS fell short of expectations. ZINUS posted 65.6 billion won in operating profit as recently as 2022, but swung to a loss with a 30.1 billion won operating loss in the first quarter of this year.
ZINUS's weak performance fed directly into Hyundai Department Store Group's finances. When acquiring ZINUS, Hyundai Department Store recognized as goodwill the portion it paid above the net worth on the books. It paid a premium, factoring in ZINUS's brand, online sales network, and global growth potential.
The goodwill Hyundai Department Store recognized during the ZINUS acquisition was 320.9 billion won. But as performance deteriorated faster than expected after the acquisition, Hyundai Department Store had to write down that goodwill. It recorded goodwill impairment losses of 35.8 billion won in 2022 and 258.3 billion won in 2023, reducing ZINUS-related goodwill to about 8.6 billion won by the end of 2023. In effect, most of the premium expected at the time of acquisition was wiped out as an accounting loss.
An industry official said, "Goodwill impairment is not a cost where cash immediately goes out, but an accounting loss recognized when it is judged that it is no longer feasible to acknowledge on the books the future profitability expected from a past M&A," and added, "In ZINUS's case, it means a significant portion of the premium Hyundai Department Store paid was damaged in just two years, which could raise questions about whether the acquisition price and timing were appropriate."
The sale of the Georgia plant has become an occasion to bring these controversies back to the fore. The Georgia plant was a production base intended to reduce tariff burdens and respond quickly to local U.S. clients, but due to weakening demand and rising costs, it ultimately became a target for restructuring.
The industry sees ZINUS's future task hinging on whether it can restore its core competitiveness after withdrawing from U.S. production. While the sale of the plant can reduce fixed costs, the slowdown in U.S. mattress demand, tariff burdens, and whether orders from major clients recover remain variables.