[Edaily Reporter Shin Ha-yeon ] TOEBOX KOREA, Ltd.(215480), a company specializing in children’s shoes and fashion, is pursuing a business merger with its new largest shareholder, GGUMBI Inc.(407400), ahead of an extraordinary general meeting of shareholders scheduled for the 14th. The company plans to improve profitability and its business structure by leveraging the largest shareholder’s e-commerce capabilities while responding to increasingly stringent KOSDAQ listing maintenance regulations.

According to the financial investment industry on the 7th, TOEBOX KOREA, Ltd. has been pushing for a business restructuring since GGUMBI Inc. became its largest shareholder last July. The key strategy is to combine TOEBOX KOREA, Ltd.’s offline-focused distribution network with the online commerce capabilities of GGUMBI Inc.

Currently, TOEBOX KOREA, Ltd. operates its business through approximately 80 department stores and outlet stores nationwide. However, due to high offline distribution fees and store management costs, online sales accounted for only about 16% of total revenue last year. Through this business integration, the company plans to expand the share of online sales by collaborating with the e-commerce platform owned by Ermore, a subsidiary of GGUMBI Inc.

The two companies will also integrate their product portfolios. They aim to build a product line spanning from infancy through childhood and achieve cost efficiencies by consolidating back-office functions such as purchasing, logistics, and management.

To this end, TOEBOX KOREA, Ltd. plans to propose the appointment of directors as the first agenda item at this extraordinary general meeting. The plan is to bring representatives from the largest shareholder onto the board of directors to establish a management structure capable of executing the business combination.

The company is also continuing its shareholder return policy. Earlier this year, TOEBOX KOREA, Ltd. purchased 1 billion won worth of treasury stock on the open market and canceled 230,000 shares of treasury stock it had previously acquired. In July, it also signed a trust agreement to acquire 2.4 billion won worth of treasury stock. The amount allocated or scheduled to be allocated to shareholder returns this year exceeds twice the net income for the first half of the year.

In July, the company successfully completed a large-scale capital increase following the payment for a third-party private placement worth 3.5621 billion won to GGUMBI Inc.

In addition, in line with the financial authorities’ stricter criteria for delisting from KOSDAQ, the company is proceeding with capital expansion, share buybacks, and business restructuring following the change in its largest shareholder.

At this extraordinary general meeting, a proposal to secure funds for shareholder returns will also be put to a vote. If Agenda Item No. 2, “Transfer of Capital Reserve to Retained Earnings,” is approved, 10 billion won from the capital reserve will be converted to retained earnings. This will secure funds that can be used for future additional acquisitions and cancellations of treasury stock or cash dividends. It will not result in a reduction of paid-in capital or the issuance of new shares.

TOEBOX KOREA, Ltd. official stated, “This extraordinary general meeting of shareholders marks a turning point for maintaining our momentum of doubling operating profit and creating strong business synergies with our largest shareholder,” adding, “We will strive to enhance corporate value and, through this, deliver the best possible results to our shareholders.”