Laying the Foundation for Growth as ‘Korea’s No.1 Furniture and Interior Company’
Business Efficiency, Brand Advancement, and Strengthened ESG Management
Hanssem Co., Ltd. (CEO Kim Yu-jin) announced in its preliminary earnings release for the second quarter of 2024 (consolidated basis) that it recorded sales of KRW 478.0 billion and operating profit of KRW 7.1 billion.
Although a portion of its bad debt allowance (KRW 4.6 billion) was recognized as a loss due to the unexpected ‘TMON-WeMakePrice crisis,’ the company posted operating profit that increased 478.3% year-on-year. After recording an operating loss in the third quarter of 2022 amid the economic downturn and returning to profit in the second quarter of last year, the company has now posted profits for five consecutive quarters. The company explained that improvements such as a better cost ratio through supply chain optimization have translated into results, allowing the normalization of operating profit to continue. However, sales fell 7.1% year-on-year due to declining remodeling demand caused by the sluggish real estate and construction market and the delayed recovery of consumer sentiment. On a cumulative first-half basis, sales came to KRW 963.9 billion, down 2.0% from the same period last year, while operating profit turned positive at KRW 20.1 billion, an improvement of KRW 34.6 billion.
Hanssem plans to continue its solid earnings improvement in the second half by focusing on laying the foundation for sustainable growth as ‘Korea’s No.1 furniture and interior company.’ To this end, it will implement strategies including business efficiency, brand advancement, strengthened ESG management, and the redefinition of corporate culture.
First, the company is continuously enhancing its financial soundness through ‘business efficiency.’ Thanks to strategic supply chain management driven by the reduction of purchasing costs sustained since the fourth quarter of 2022, the second-quarter cost ratio improved by 2.0 percentage points compared with the same period last year, while strategies to strengthen high-margin products and optimize prices by channel are also driving the recovery of profitability.
In addition, as an industry-leading company, Hanssem plans to achieve ‘brand advancement’ by further strengthening its unrivaled competitiveness. Hanssem is the only operator in Korea that has completed a ‘remodeling value chain’ in the interior market, operating a nationwide sales, logistics, and construction system, online and offline distribution channels, and a space proposal system that will innovate the interior market. In particular, the company plans to further enhance the competitiveness of and concentrate its marketing capabilities on core products, such as the ‘Rehouse Style Package’ for remodeling the entire home and partial renovation products for kitchens, baths, and storage that meet the demand for renovating a home without moving out.
The company is also building a foundation for sustainable growth through ‘strengthened ESG management.’ In June, Hanssem became the first in the industry to publish a sustainability management report reflecting global standards, expanding its ESG management. In line with the characteristics of a furniture company that uses wood as its main raw material, the company continues to pursue carbon neutrality, environmental protection, and responses to climate change. It has also set the goal of introducing and internalizing human rights management that proactively respects human rights and diversity in line with global standards, going beyond gender equality.
The company is also focusing on strengthening internal capabilities through the ‘redefinition of corporate culture.’ By enhancing the value of its executives and employees—who can be considered ‘internal customers’—the company aims to establish a foundation for providing better services and products to external customers as well. Going forward, Hanssem plans to proclaim a new mission to strengthen internal cohesion and solidify the organizational foundation for sustained growth and a renewed leap forward.
Although concerns have recently been raised that the recovery of consumer sentiment may be delayed amid turbulence in global financial markets, the interior market is expected to continue growing over the mid- to long term. Based on these strategies, Hanssem plans to lay the foundation for growth and prepare for the market’s recovery phase.
▲ Hanssem Co., Ltd. announced in its preliminary second-quarter earnings release (consolidated basis) that it recorded sales of KRW 478.0 billion and operating profit of KRW 7.1 billion.