[Edaily Marketin Reporter YunJi Kim ] IMM Private Equity (IMM PE)’s Able C&C is accelerating its earnings recovery, driven primarily by its overseas operations. Although it was once dubbed IMM PE’s “problem child” due to the slump in the domestic retail market and poor performance in China, the company is rapidly transforming its business model by shifting its growth focus to the U.S. and Europe. In particular, following the reduction of its financial burden through refinancing last November, improvements in overseas sales and profitability have reignited interest in the possibility of IMM PE recouping its investment, which had been in limbo for a long time.

According to industry sources on the 29th, Able C&C has recently been rapidly expanding its overseas distribution network, focusing on the U.S. and Europe. Overseas operations now account for about 70% of total revenue, and the company is accelerating its push into the European market by successively placing its flagship brand, Missha, in major online and offline channels in the UK.

IMM PE previously acquired Able C&C in 2017 through the special-purpose vehicle Leaf & Vine. It invested approximately 400 billion won in the acquisition of the founder’s stake, a tender offer, and a capital increase, of which 120 billion won was raised through acquisition financing. However, following the acquisition, the company’s performance deteriorated due to the “ban on Korean products in China,” a slump in the domestic retail market, and the impact of COVID-19. It also faced difficulties, including the loss of the benefit of time (EOD), as some major lenders refused to extend the maturity of the acquisition financing.

Subsequently, IMM PE set out to improve Able C&C’s financial health by simultaneously restructuring its domestic operations and expanding its overseas business. After partially repaying the acquisition financing through dividends and other measures, the company further reduced its financial burden by completing a refinancing at the end of last year.

These structural improvements and the expansion of overseas operations are leading to a recovery in performance. Able C&C’s consolidated revenue for the first quarter of this year reached 61.4 billion won, a 10.2% increase year-over-year, while operating profit rose 91% to 9.4 billion won. Overseas sales were particularly notable. The company’s overseas revenue rose 47.2% year-over-year, with sales in the U.S. and Europe increasing by 230% and 43%, respectively. Its U.S. subsidiary also returned to profitability. This has led to assessments that the company’s strategic shift—boldly reducing its reliance on low-margin domestic offline and duty-free channels and reorganizing its overseas operations to focus on the U.S. and Europe—is yielding tangible improvements in performance.

Able C&C is accelerating its expansion not only online but also through local offline channels. For example, Misha, Able C&C’s flagship brand, entered the UK TikTok Shop in March and, in June, began selling its products at 97 offline locations of the local drugstore chain Boots as well as on its online store. Recently, the brand also launched its products at Superdrug, a major UK health and beauty chain. As the company is expanding its reach through both online and offline channels in the UK, following its success in the U.S., the proportion of overseas sales is expected to grow further.

In fact, Hana Securities recently projected in a report that Able C&C would post consolidated second-quarter revenue of 65.3 billion won and operating profit of 9.5 billion won. It forecast that operating profit would rise 32% year-over-year, while the share of exports would increase to 72%. The analysis suggests that revenue growth in the U.S. and Europe—up 150% and 48%, respectively—will drive this performance.

Park Jong-dae, an analyst at Hana Securities, noted, “In the U.S., following a 35% year-over-year increase in sales during Amazon Prime Day, sales on TikTok Shop are recovering after the relaunch of the BB Cream.” He added, “The company is following the K-Beauty growth formula of first achieving success on Amazon and then expanding into the U.S. brick-and-mortar and European markets.”

The growth of the global K-Beauty market is also bolstering Able C&C’s overseas expansion strategy. According to the Ministry of Food and Drug Safety, domestic cosmetics exports in the first half of this year reached $7 billion—a 27.3% increase from the same period last year—marking the highest first-half total on record. As the export market, which had been concentrated in China, rapidly diversifies to include the U.S., Europe, and Japan, analysts believe that Able C&C—which has proactively expanded its distribution networks in these regions—is highly likely to sustain its growth momentum.