이 기사는 2019년 12월 12일 08:00 thebell 에 표출된 기사입니다.

South Korea’s retail giant E-Land Group is close to a deal to sell its women’s apparel business to a private equity investment firm, raising the expectation that a share purchase agreement could be signed within the year.

E-Land World Ltd, an E-Land Group’s affiliate well known for its women’s apparel brand EnC, is currently negotiating privately with a private equity firm to sell its entire stake, sources close to the matter said last Friday. After months of negotiation, the two parties could ink a deal as early as this month.

E-Land World is seeking about 30 billion won ($25 million) for the business, which has 12-month earnings before interest, taxes, depreciation and amortization (EBITDA) of three to four billion won ($2.5 to 3.4 million) as of the end of 2018.

In March of this year, E-Land World officially put itself up for sale, hiring Deloitte Anjin to run an auction for the company. The preliminary bidding was held in early April, but later the company stopped the auction process to have private negotiations with potential buyers. Now candidates reportedly have been narrowed down to one.

EnC, one of more than 20 apparel brands under E-Land World, targets women in their 20s and 30s. Launched almost 30 years ago, EnC has strong brand awareness among both young and old consumers in the country. In addition, an opportunity to enter new business areas, such as cosmetics, innerwear and accessories, based on its strong brand image and existing sales channels could be considered attractive to potential buyers. Indeed, this has been one of the company’s key marketing points.

It is also considered that there is room for profitability growth by expanding to the Chinese market and aligning distribution channels. The EnC brand’s first attempt at entering China in the past ended in failure, with Chinese consumers’ shopping behavior vastly shifting from offline to online. The brand, however, has recently been ramping up its efforts again to attract Chinese consumers, opening its online store on Alibaba's Tmall in May.

Despite a slowing growth in the domestic apparel market, the EnC brand’s financial performance has improved recently. Last year, revenue from the brand grew about 12 percent to 35 billion won ($29 million) according to the company’s. Its debt ratio is also lower than the average for its peers, and its operating margin stands at 10.8 percent, the highest among its peers.

(By reporter Kim Hye-ran)