SEOUL -- Hyundai Department Store, a major department store chain in South Korea, will acquire Zinus, a domestic eCommerce mattress and furniture company that commercialized a technology to compress and pack bed mattresses and deliver them in boxes for the first time in the world with online channel sales accounting for 80 percent of all sales.
Hyundai Department Store said in a regulatory filing on March 22 that the acquisition is aimed at expanding its presence overseas and strengthening online business capabilities. Zinus founded by Chairman Lee Young-jae controls 30 percent of the U.S. online mattress market by offering a budget-friendly lineup of memory foam, spring, and hybrid mattresses in a variety of heights.
Hyundai Department Store said that its board approved the proposed acquisition of a 35.8 percent stake in Zinus for 894.7 billion won ($732 million), including 120 billion won worth of new shares to establish a new factory in Indonesia and strengthen its financial structure. Zinus has business concerns in the U.S., Canada, Australia and Japan, with global sales accounting for 97 percent of all consolidated sales that stood at 1.12 trillion won in 2021.
Hyundai Department Store promised to guarantee 100 percent employment of Zinus employees and allow Lee to keep holding some shares and participate in management as chairman of the board of directors. The department store group would cooperate with affiliates to diversify a lineup of Zinus products to mid and high-priced models and expand the scope of overseas businesses to Europe and South America.
The group's long-term goal is to acquire or collaborate with sleep tech companies for its foray into the market for high-end sleep aids. The deal underlines Hyundai Department Store's efforts to become a global lifestyle company. The group has proposed a goal of raising sales in the living business to around five trillion won by 2030 from 2.5 trillion won in 2021.
"We have made a final decision to acquire Zinus to expand the department store business area centered on offline and domestic distribution to online and global markets, and to secure a growth engine to supplement the department store business, which is in the phase of industrial maturity," an unnamed Hyundai Department Store official said.
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