[THE INVESTOR] Korean cosmetics firm Able C&C announced on Nov. 13 that it will acquire its smaller crosstown rival Mefactory for 32.4 billion won (US$286.14 million).
Mefactory, established in 2014, is well known for its flagship product c3-Step Premium Piggy Nose Strip. In 2016, it launched new popular brands like Body Holic and Merzy with another cosmetics firm Honesi.
“By acquiring Mefactory, we now have a new growth engine,” Able C&C official Park Hyun-jin said in a statement.
The company said it would focus on expanding Mefactory’s new brands -- currently available at hypermarkets and health and beauty stores -- to post combined sales of over 100 billion won by 2020. Mefactory’s products will also be sold at Able C&C’s Missha outlets globally.
Able C&C is currently losing money mainly due to increasing competition from other Korean cosmetics brands, even as Korean customers prefer to shop at health and beauty stores, which sell differentiated budget cosmetics brands. The company recently announced that it turned to red in the third quarter, with 13.2 billion won (US$ 11.66 million) operating loss.
By Song Seung-hyun (firstname.lastname@example.org)