CEO Kim Ji-hoon reveals ambitious plans at a corporate briefing to expand AU Brands’ reach and introduce new brands while maintaining profitability.
At a corporate briefing held on the morning of October 18, 2023, in the CCMM building of Yeouido, Seoul, Kim Ji-hoon, the CEO of AU Brands, outlined the company’s ambitions to establish itself as a pivotal player in the global fashion industry. During the event, Kim emphasized the company’s strategy focused on introducing new brand intellectual property (IP) and revitalizing unique brands and product categories.
Founded in 2022, AU Brands is known for its ‘Rock Fish Weatherwear’ brand, which specializes in boots and accessories. The company initially partnered with the UK-based company ZENNAR to introduce the ‘Rock Fish’ brand and further expanded its reach after acquiring ZENNAR in January 2023. This acquisition has propelled AU Brands into the competitive landscape of K-fashion, targeting international markets.
AU Brands has demonstrated significant profitability in its recent operations, reporting operating profit margins of 34% in 2022, 39% in 2023, and 26% in the third quarter of 2023. The company has identified global market expansion as a vital component of its growth strategy. Plans include bolstering the existing product line of Rock Fish Weatherwear and launching additional brands across various sectors such as clothing and accessories to diversify its offerings.
Kim highlighted the company’s strategic distribution efforts, stating, “We have completed distribution contracts in six countries: Taiwan, Macau, Hong Kong, Japan, China, and Thailand,” and projected a local sales target of 250 billion won across those markets by 2027.
Through its initial public offering (IPO), AU Brands aims to raise 28 billion won, calculated based on the lower end of its proposed share price of 14,000 won. The company plans to allocate 13.5 billion won, representing 48% of the anticipated funds, towards brand acquisitions.
CFO Nam Song-hyun elaborated on the acquisition strategy, stating, “We plan to acquire a brand that symbolizes a particular season and integrate it with our existing business structure. The reason we can consider M&A for new brands is due to our confidence in our existing profit structure, allowing us to maintain profitability while increasing distribution volumes.”
AU Brands intends to offer a total of 2 million shares, comprising 1.6 million new shares and 400,000 existing shares, with a total of approximately 14.16 million shares expected to be listed. The sale of the existing shares will be exclusively from CEO Kim’s personal holdings. The company aims for a market capitalization of around 200 billion won. The share offering price range has been set between 14,000 and 16,000 won per share, targeting an offering scale of 28 to 32 billion won, and estimating a post-listing market cap between 198.2 billion and 226.6 billion won. Demand forecasting for the IPO is scheduled from October 13 to 19, and the general subscription will occur over two days, from March 25 to 26, with Korea Investment & Securities serving as the lead underwriter for the listing.
Source: Noah Wire Services
