Second-hand luxury goods online retailer Feelway up for sale Cafe 24 seeks $84 mil for the company

Translated by Kim So-in 공개 2021-10-19 08:08:30

이 기사는 2021년 10월 19일 08:04 더벨 유료페이지에 표출된 기사입니다.

Feelway, which operates an e-commerce platform for used luxury products, has been put up for sale after Café 24 acquired the company three years ago.

Café 24 is trying to sell management rights of Feelway, industry sources said on Friday. A 100% stake in Feelway, which is 50% owned by Café 24 and the remaining 50% owned by the MNC private equity fund, will be sold.

The MNC private equity fund is a special purpose vehicle established by financial investors, including Cactus Private Equity and Maple Investment Partners, formerly known as MG Investment, that Café 24 secured in a bid to raise funds for its Feelway acquisition.

Café 24 is seeking to sell the company for around 100 billion won ($84 million). The price is not significantly higher than the price tag of 84 billion won it paid for Feelway in 2018.

Profitability of the company has deteriorated since the acquisition. Feelway recorded earnings before interest, taxes, depreciation, and amortization (EBITDA) of 3.3 billion won on a non-consolidated basis in 2020, about half its EBITDA of 6.7 billion won in 2017 just before it was acquired by Café 24.

One of the reasons for the deterioration of profitability is an increase in expenses due to the expansion of offline business. Feelway, which used to focus on the online business, it is now trying to expand its offline business. The company recently opened its store in Apgujeong-dong, Seoul.

Feelway recorded operating expenses of 12.3 billion won on a non-consolidated basis in 2020. The operating expenses increased by 2.2 billion won compared to a year earlier, of which more than half was due to an increase in employee benefits.

The sale is expected to draw strong interest from potential buyers given the growth of the second-hand luxury market. A sale of Gugus, another domestic shopping mall for second-hand luxury products, is also underway, with the company being in talks with a preferred bidder.

Sales of luxury goods at the top three department stores - Lotte, Shinsegae, and Hyundai Department Store - increased by 15.1% in 2020 from a year ago, according to the Ministry of Trade, Industry and Energy. Analysts said the second-hand luxury market is continuing to grow thanks to the increased consumption of luxury goods. (Reporting by Byungkeun Kam)
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