Korean leathergoods brand has no part in GST AutoLeather deal
26/05/2016
However, one of the companies mentioned in connection with the deal, Seoul-based leathergoods brand Simone, has told World Leather it has no involvement in the deal and will play no part in running GST AutoLeather if the acquisition goes ahead.
Quoting sources in the local investment banking sector, Korean media reported in March that private equity firm MBK Partners had signed a memorandum of understanding with a Japanese counterpart, Advantage Partners, to acquire its 100% stake in GST AutoLeather. They even quoted an approximate value of the deal, $400 million, and said Simone was involved in the deal. This led to speculation that Simone chairman, Kenny Park, has decided to expand from leathergoods into automotive leather.
Simone claims to be the largest producer of luxury leathergoods in the world. It is a distributor of luxury leathergoods in the Korean market for a number of high-end global brands, but it also makes large volumes of handbags and other products of its own. It operates no tanneries of its own, though, preferring to buy in all of the leather it uses.
Speaking at the 2016 Condé Nast International Luxury Conference in Seoul in April, Simone director Joowon Park claimed that her company makes 20 million handbags per year and that its workforce has a combined total of 3,500 years’ leathergoods experience. It also runs a museum in the South Korean capital dedicated to handbags.
But Simone’s vice-president for strategic planning, Robert Lee, has insisted the company has no role to play in the proposed deal for GST AutoLeather. He told World Leather at the end of May: “Simone has nothing to do with this deal [for the] acquisition of GST AutoLeather. And Simone has no plans to enlarge our business into tanneries or into other product categories such as automotive leather.”
Mr Lee went on to explain that Simone Investment, which is part of the same group, is involved in various acquisition projects and is working with MBK on the GST AutoLeather deal, but purely from an investment point of view with no overlap whatsoever with leathergoods business.
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