[Edaily Reporter SHIN MIN JOON ] #HYUNDAIDEPARTMENTSTORECO.,LTD has effectively completed its corporate governance restructuring following the recent delisting of HYUNDAI HOME SHOPPING NETWORK CORPORATION(057050), which had served as the group’s intermediate holding company. Through this move, HYUNDAIDEPARTMENTSTORECO.,LTD has resolved uncertainties regarding its corporate governance structure while further solidifying the joint management system led by brothers Jiseon Chung and Jeong Gyo-seon.

Having laid the groundwork for management stability, HYUNDAIDEPARTMENTSTORECO.,LTD is now accelerating efforts to enhance the group’s value. Group affiliate ZINUS(013890)is expected to be the final piece of the puzzle. This is because, while the group’s core affiliates—such as its department stores—are posting strong earnings, ZINUS is the only one among the 24 affiliates to report an operating loss. ZINUS aims to return to profitability by strengthening its expansion into the U.S. market, leveraging competitive product pricing, and diversifying its business structure.

According to the Financial Supervisory Service on the 5th, HYUNDAI HOME SHOPPING NETWORK CORPORATION was recently delisted. Following a spin-off, the investment division of the former HYUNDAI HOME SHOPPING NETWORK CORPORATION will be absorbed and merged into the holding company, HYUNDAI G.F. HOLDINGS. The home shopping business division will be incorporated as a wholly-owned subsidiary of HYUNDAI G.F. HOLDINGS. Consequently, HYUNDAI G.F. HOLDINGS will directly control its former sub-subsidiaries—△Hyundai Futurenet, △HandsomeCorporation, and △Hyundai L&C—as direct subsidiaries.

The key objective of this corporate governance restructuring is to eliminate uncertainty in the group’s ownership structure. By elevating Hyundai Futurenet—which was previously a sub-subsidiary of HYUNDAI G.F. HOLDINGS—to a direct subsidiary, the HYUNDAIDEPARTMENTSTORECO.,LTD Group has satisfied the restrictions on holding company activities. Additionally, by delisting HYUNDAI HOME SHOPPING NETWORK CORPORATION, the group has resolved the issue of duplicate listings between HYUNDAI G.F. HOLDINGS and HYUNDAI HOME SHOPPING NETWORK CORPORATION.

According to the restrictions on holding company activities, a holding company’s great-grandchild company must hold 100% of the shares of its great-great-grandchild company. Prior to the restructuring, Hyundai Futurenet—which was a great-grandchild company of HYUNDAI G.F. HOLDINGS—held only a 35% stake in its subsidiary HYUNDAI BIOLAND Co.,Ltd. (a great-great-grandchild company of HYUNDAI G.F. HOLDINGS). To meet the mandatory ownership ratio requirement—one of the restrictions on holding companies—Hyundai Futurenet had to purchase a 65% stake (19.5 million shares) in HYUNDAI BIOLAND Co.,Ltd. Based on the closing price that day, the value of this stake amounted to approximately 70.6 billion won.

Hyundai Futurenet(126560)’s cash and cash equivalents totaled only 31.8 billion won as of the first quarter of this year. found it difficult to repurchase its own shares, making fundraising unavoidable. However, following the merger of HYUNDAI HOME SHOPPING NETWORK CORPORATION into the holding company HYUNDAI G.F. HOLDINGS, became a subsidiary of HYUNDAI G.F. HOLDINGS. HYUNDAI BIOLAND Co.,Ltd. also became a sub-subsidiary, thereby eliminating the burden of acquiring Hyundai Futurenet’s shares. The HYUNDAIDEPARTMENTSTORECO.,LTD. Group has completed a structure centered on HYUNDAI G.F. HOLDINGS to directly control its core affiliates, thereby maximizing decision-making efficiency across the entire group.

A department store industry official stated, “With this restructuring of the corporate governance structure, the HYUNDAIDEPARTMENTSTORECO.,LTD Group has achieved two goals at once,” adding, “The group has not only resolved the issue of duplicate listings of holding companies—a matter the government views with sensitivity—but has also strengthened its co-management system between brothers by improving management efficiency.”

Now that it has completed its corporate governance restructuring, HYUNDAIDEPARTMENTSTORECO.,LTD is accelerating efforts to enhance the group’s corporate value. The key variable is expected to be ZINUS, a furniture and mattress manufacturer. ZINUS’s performance has been sluggish so far this year.

In the second quarter of this year, ZINUS posted revenue of 147.5 billion won and an operating loss of 26.7 billion won. Revenue fell 35.7% year-over-year. Operating profit turned to a loss from a profit of 29.1 billion won in the same period last year. This is attributed to a decline in mattress demand from U.S. clients due to growing global macroeconomic uncertainty.

ZINUS is aggressively targeting the U.S. market to return to profitability. This is because the U.S. is ZINUS’s core market, with U.S. sales (as of the second quarter of this year) accounting for more than half of its total revenue. ZINUS has placed its bets on product and price competitiveness. The company possesses unique “Roll-Pack” technology, which compresses mattresses and other products for packaging and shipping in boxes.

With ZINUS’s Roll-Pack mattress packaging, once customers remove the box and plastic wrap after purchase, the compression is released, and the mattress returns to its original shape within a maximum of 72 hours. Since 2024, ZINUS has been developing and implementing its second-generation compressed packaging, the “Small Box,” which reduces volume by approximately 60%. ZINUS’s best-selling Green Tea mattress is priced at 270,000 won, making it significantly more affordable than competing U.S. products that cost several million won. This is because ZINUS minimizes distribution costs by selling online through platforms like Amazon without operating physical stores.

ZINUS is also boosting production efficiency. To this end, the company is selling its manufacturing plant in Georgia, U.S., and reorganizing its operations to focus on production in Indonesia. ZINUS determined that, considering factors such as tariffs and labor costs, production in Indonesia is more competitive than in the U.S. The sale of the Georgia plant will also secure approximately 135.3 billion won in funds for ZINUS. ZINUS is also increasing its market share in new markets, such as South Korea, through customized products. ZINUS’s sales in the South Korean market have been growing steadily, reaching 44.3 billion won in 2024 and 59.0 billion won last year.

A company official stated, “In addition to mattresses, ZINUS is diversifying its business structure by expanding its non-mattress product lineup to include △bed frames △motion beds △bedding △living room furniture,” adding, “We will continue to restructure our business with a focus on profitability.”