[THE INVESTOR] A local court on Oct. 19 decided to place Korean cosmetics maker SKINFOOD under court receivership.
The ruling came after SKINFOOD filed for court receivership on Oct. 8 due to huge accumulated losses as it lacked liquidity to pay back around 2.9 billion won (US$2.55 million) loan from Industrial Bank of Korea.
After the court’s decision was announced, SKINFOOD said it would consult with its creditors to appoint a chief risk officer to normalize its business as soon as possible.
“We also plan to resume supplying our flagship products to franchisees that made payments in advance, so that they can operate their business normally,” a SKINFOOD official said in a statement.
The company also said it will consider selling shares or operating rights of its units overseas to secure some cash. It is mainly considering selling its units in the US and China.
Established in 2004, SKINFOOD was ranked as one of the top three budget beauty brands here in 2010, with sales reaching 164.2 billion won. However, the Korean cosmetics maker has suffered losses since 2014, mainly due to not having enough competitiveness and lagging behind the fast changing market trends here. Its sales dropped 25 percent from 169 billion won to 126.9 billion won on-year in 2017.
“In the long term, we aim to work on expanding our e-commerce business here to reach more customers and gain competitiveness,” the company official added.
By Song Seung-hyun (firstname.lastname@example.org)