Hanssem has launched an office furniture brand, moving to expand its portfolio. As growth in its core businesses continues to slow, the strategy is to seek a rebound through new ventures. Still, with powerful rivals like Hyundai LIVART and Fursys already entrenched, the industry is watching to see whether this can be a real breakthrough.
According to related industries on the 22nd, Hanssem's revenue peaked at 2.2312 trillion won in 2021 and has declined every year since. According to the Financial Supervisory Service's electronic disclosure system, Hanssem's revenue and operating profit last year were 1.7445 trillion won and 18.5 billion won, down 8.5% and 40.7% from the previous year. Compared to operating profit of 69.3 billion won in 2021, profitability has deteriorated significantly over five years.
A housing market slump lies behind this poor performance. As housing transactions plunged and remodeling demand shrank, Hanssem's core B2C (business-to-consumer) interior segment was directly affected. The furniture industry, including Hanssem, also faced a base effect in reverse as the "home decorating" boom during the pandemic normalized.
External expense pressures also hurt. Rising raw material prices, higher labor costs, and increased logistics expenses widened the deterioration in profitability. That is why there is criticism that simple cost cutting will not be enough to regain past growth momentum.
The industry has consistently argued that for Hanssem to enjoy high growth again, it needs a fundamental shift in business structure beyond simple expense cuts. Kang Min-chang, an analyst at KB Securities, said, "Given weakened consumer sentiment and a housing market slump, it is not easy to expect the tandem growth of scale and profit that powered past share-price gains," adding, "Hanssem is focusing on selling higher-margin single remodeling items like kitchens and bathrooms amid limited top-line growth, and we need to see whether a meaningful recovery in the cost ratio is possible."
On the 2nd, Hanssem launched the "Emergen" series of office furniture and set up a showroom at Hanssem Flagship Nonhyeon. Entering the office furniture market appears to reflect a desire to expand its residential-space-centered business model into offices to secure new demand channels. The company also aims to expand the share of its B2B (business-to-business) operations for corporate clients to reduce earnings volatility.
But the market environment is not easy. The office furniture market is already firmly dominated by a duopoly of Hyundai LIVART and Fursys.
Hyundai LIVART has a dense sales network in the B2B market based on the Hyundai Department Store Group's infrastructure. Fursys, as a specialist office furniture brand, has expertise and brand recognition. An industry official said, "The office furniture market is an industry where long-term transactional relationships and trust-based sales networks matter beyond simple product competition," adding, "As a latecomer, it will not be easy for Hanssem to secure meaningful market share in a short period."
Another variable is that the office furniture market is also highly sensitive to the economy. If corporations cut capital expenditures in anticipation of a downturn, office furniture demand can quickly contract. That means, as with the residential interior business, it is not completely free from economic volatility.
Even so, the industry views Hanssem's move as an "inevitable choice." To halt a steep slide in results, the company needs to expand its business territory to every available area.
Whether it can gain a foothold in the office furniture market is expected to be a key watershed for Hanssem's potential rebound. If it fails to secure meaningful revenue in office furniture, the strategy of expanding into new businesses could become a burden. Conversely, if it delivers results above a certain level, Hanssem could set the stage for a business structure shift.
An industry official said, "Hanssem did not issue an earnings outlook for this year, which reads as an indication of crisis," adding, "Whether its entry into the office furniture market ends as mere line-filling or becomes a real cash cow depends on Hanssem's management strategy and its ability to build a sales network."