Fashion and beauty corporations are moving in quick succession to prepare for initial public offerings (IPOs). As Goodai Global and Musinsa are cited as big-ticket candidates amid their growth through mergers and acquisitions (M&A) and expansion of global operations, Highlight Brands and Piece Piece Studio Co., Ltd. are also aiming to list on the stock market. The securities industry says they need to prove stable profit structures to succeed in their IPOs.
On the 14th, according to related industry sources, Goodai Global recently changed the name of its Japan subsidiary from "D&ACE" to "Goodai Global Japan" and began expanding its local business. The move is seen as a bid to systematize subsidiary operations and strengthen overseas distribution networks ahead of a listing.
Starting this month, dedicated personnel from the underwriter syndicate, including Mirae Asset Securities, NH Investment & Securities, and Citigroup, have been dispatched to and are stationed at Goodai Global's headquarters. Ahead of due diligence, the company has overhauled its organization by hiring a large number of people with IPO experience across departments.
Goodai Global is a beauty corporation that has grown rapidly with an aggressive M&A strategy. Its flagship brands include Beauty of Joseon, which made a name for itself with sunscreen in the North American market. It also owns TirTir, SKINFOOD, and Round Lab. The company is said to be seeking a corporate value of around 10 trillion won.
Last year, Goodai Global's revenue was 1.47 trillion won, up 294.5% from the previous year, and operating profit was 273.4 billion won, up 98.4%. If the results of TirTir, SKINFOOD, and Seorin Company, which were acquired during the year, are consolidated, revenue rises to 1.75 trillion won and operating profit to 401.4 billion won.
Musinsa, cited as another top-tier candidate, is also accelerating preparations for a domestic and overseas listing. Last year, it selected Korea Investment & Securities Co. as the lead underwriter, and it is reportedly planning to file a preliminary listing review as early as the second half of this year. The company is likewise targeting a corporate value of about 10 trillion won.
Choi Young-jun, Musinsa's chief financial officer (CFO), said at a shareholders meeting held at the end of last month that, given performance and growth pace, the company could reach a corporate value of 8 trillion to 10 trillion won. Musinsa's revenue last year rose 18.1% from the previous year to 1.4679 trillion won, and operating profit climbed 36.7% to 140.5 billion won, both record highs.
Highlight Brands, which is rolling out more than 10 fashion brands, has also formalized its IPO. Established in 2019, Highlight Brands is credited with successfully establishing, at home and abroad, labels including Kodak Apparel, Malbon Golf, and Sierra Designs.
Highlight Brands' revenue last year was 284 billion won, up 14% from the previous year. There are projections that exports this year will expand to 167% of the previous year. The company plans to focus on boosting its corporate value before the IPO, based on overseas business expansion.
Piece Piece Studio Co., Ltd., which operates the women's designer brand "Mardi Mercredi," well known for its flower graphic, has also moved to list. Piece Piece Studio Co., Ltd. filed a securities registration statement with the Financial Services Commission and began the public offering process for a KOSDAQ listing. Institutional demand forecasts will take place May 11 to 15, and the retail subscription will be held May 20 to 21.
However, there have been no few cases in retail where IPO plans were derailed by market variables. Kurly passed the preliminary review for a Korea Exchange main board listing in 2022 but voluntarily withdrew its listing plan the following year due to deteriorating investor sentiment. Oasis Market also attempted an IPO in 2023, but ultimately withdrew the listing after institutional investor demand fell short of expectations.
In retail and the market, there is a view that while both Goodai Global and Musinsa are eyeing a corporate value of around 10 trillion won, expectations for actual valuation could vary depending on market conditions. There are also concerns about the lack of appropriate comparables (peer group).
A securities industry source said, "The biggest variable is whether profitability can be sustained," adding, "In particular, competition among indie brands in the cosmetics market is intensifying, and the presence of China beauty (C-beauty) is also growing." The source added, "M&A or overseas investment to scale up can act as an expense burden and affect financial soundness," and said, "They need to be able to prove stable profit structures, as much as growth potential."
In Musinsa's case, Netflix, Nintendo, ZOZOTOWN, Uniqlo, and APR have been mentioned as a peer group. Analysts say the business characteristics—mixing platform, distribution, and proprietary brands—have dispersed the comparables. A retail industry source said, "The lack of clear peers makes it difficult to be assessed for fair value, which is a burden."