이 기사는 2021년 10월 08일 07:33 thebell 에 표출된 기사입니다.

SM Entertainment, the South Korean entertainment company behind boy bands EXO and NCT, will exit its restaurant business in Japan and use the money saved to expand its platform business, a move to catch up with changes accelerated by the Covid-19 pandemic.

The company’s Japanese unit, SM Entertainment Japan, will merge with its wholly owned restaurant subsidiary SM F&B Development Japan, according to a regulatory filing on Tuesday. The transaction is expected to be completed on December 1.

The merger is to save costs and enhance management efficiency, the company said in the filing. SM F&B Development Japan recorded a net loss of 6.9 billion won ($5.8 million) in 2020 as the pandemic has crippled the restaurant industry. The decision in effect marks the company’s exit from the Japanese restaurant market.

The merger is also part of a broader restructuring of the company’s Japanese operations. In April last year SMEJ Plus, a fan club service, and SMEJ were separated from SM Entertainment Japan. Four months later, SMEJ was merged into Stream Media Corporation (SMC), one of the entertainment company’s affiliates listed on the Japanese stock exchange, making SMC a key subsidiary of SM Entertainment Japan.

SMC operates Japan’s satellite channels such as KNTV and DATV, while its mainstay business is the distribution of K-pop and K-drama content. It also represents South Korean artists working in Japan.

SM Entertainment is expected to divert the money saved from restructuring to the platform business, with SMC likely to play a pivotal role to that end.

SMC owns a 29.95% stake in online concert platform Beyond Live Corporation and a 47.54% stake in karaoke app Everysing Japan, which used to be held by fan community platform operator DearU.

SMC raised 30 billion won from Naver in November 2020 in a deal that gave the South Korean internet giant a 7.5% stake in the Japanese company. JYP Entertainment, the second largest shareholder in DearU, acquired a 13% stake in Beyond Live Corporation in July 2020.

Meanwhile, the sale process for SM Entertainment founder Lee Soo-man’s controlling stake is underway. Frontrunners in the race include Kakao Entertainment, CJ ENM and Naver. (Reporting by Pil-woo Choi)