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Shinsegae International acquires a 100% stake in high-end cosmetics brand Swiss Perfection

Jul 14, 2020 (Gmt+09:00)

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Korean fashion and beauty business Shinsegae International Co., Ltd has acquired a 100% stake in Swiss Perfection, a high-end cosmetics brand based in Switzerland, in a move to beef up its cosmetics business and fuel overseas expansion. The deal was prompted by Shinsegae Department Store president Chung Yoo-kyung who has identified the cosmetics business as a channel for future growth.

There have been many cases of foreign cosmetics companies such as L'Oreal and Estee Lauder acquiring Korean brands. However, this is the first time a domestic company has acquired an overseas high-end cosmetics business.

The deal size has yet to be disclosed, but it is estimated to be worth billions of won. Both parties will discuss business plans throughout the year as Shinsegae International aims to kick off its newly acquired business early next year.

“Luxury cosmetics market is attractive as it boasts an average of 5% annual growth. This acquisition will allow us to tap into the high-end skincare market which is seeing fast growth,” a source at Shinsegae International said.

Shinsegae International plans to increase its revenue by transitioning Swiss Perfection's distribution model from B2B to B2C, along with opening stores in major department stores and duty-free stores both locally and globally. It also plans to tap into China within three years.

“It is optimistic to see that Chinese millennials prefer luxury cosmetics. We plan to grow as a global cosmetics company with Swiss Perfection at the forefront," said Gilhan Lee, the director of Shinsegae International Cosmetics Division.

Swiss Perfection's products are made by using its signature anti-aging technology named Cellular Active IRISA, which will be secured by Shinsegae International as part of the deal.

Shinsegae International also plans to use Swiss Perfection's global network to speed up the overseas expansion of its own beauty brands such as Vidi Vici and Yunjac.

Founded in 1998, Swiss Perfection is a widely recognized luxury brand, creating 100% of its products from Switzerland. Its famous serum and cream products are priced around 500,000 won ($415) to 1,000,000 won each, and used in spas across 5-star and 6-star hotels such as Four Seasons and Millennium Hilton.

Shinsegae International began as a high-end fashion business under Shinsegae Department Store before launching the cosmetics business in 2012 after acquiring local beauty brand Vidi Vici, which was also led by Shinsegae Department Store president Chung.

In 2012, Shinsegae International's cosmetics business posted revenue of 1.9 billion won, which surged to 368 billion won in 2019. Vidi Vici accounted for over 210 billion won in sales.

Shinsegae International has been quite active in acquiring domestic sales rights of well-known brands including luxury perfume brand Byredo in 2014, cosmetics brand Santa Maria Novella in 2015, perfume brand Diptyque in 2017, and makeup brand Hourglass in 2018.

Shinsegae is a retail giant in Korea, with operations including department store, large retail franchise E-Mart, hotel business including 5-star hotel Westin Chosun, and the Shinsegae Duty-Free store among others.

 

By Min Jihye
spop@hankyung.com



(Updated on July 15, 2020 to add Shinsegae Department Store president Chung Yoo-kyung's role, as well as examples of Shinsegae International's previous acquisitions of sales rights.)

Danbee Lee edited this article

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