Hanssem (009240 KS) is Korea’s leading furniture company, selling home furniture and home remodelling services to consumers and interior packages to construction companies.
The company’s brand name is excellent. It has dominated the kitchen category for many years. Vertical integration enables it to maintain strong quality control, and its scale reduces costs.
Hanssem experienced strong growth until 2016 when Korea’s housing market deteriorated. The government introduced tightening measures, which reduced the pace of construction. IKEA entered the Korean market in 2014. And finally, a sexual assault by a Hanssem employee in 2017 led to a temporary consumer boycott of Hanssem-branded products.
It appears that the situation improved from 2019 onwards. That year, a new CEO took over, and Hanssem’s market share improved. Pre-sales of new apartments has now increased significantly. Sales of existing apartments also picked up during COVID-19.
The government’s plan to build 2 million public housing units appears to benefit the furniture industry, though its impact on home remodelling demand is unclear.
Founder Cho Chang-gul and his affiliated entities have recently decided to sell their stake in Hanssem to private equity firm IMM and Lotte Shopping. It looks like Hanssem’s strategy will shift following the acquisition, though the details have not yet been announced.
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