Korea’s Skinfood getting close to bankruptcy
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South Korean cosmetics firm Skinfood has filed for court receivership after increasing financial losses.
The company’s former popularity of a decade ago was hit by the 2015 Middle East Respiratory Syndrome (MERS) outbreak and diplomatic disputes between Seoul and Beijing, both events affecting the brand’s core overseas markets.
A company spokesperson said: “We are having temporary difficulty in securing liquidity due to excessive debt. We sought the court restructuring as we thought settling the debt and promptly normalising management will benefit everyone, including the creditors.”
The company has plans to sell off some of its overseas business rights and expand its online channels to improve its standing.
Skinfood’s sales reached KRW126.9 billion (US$111.96 million) last year, a drop of 25 per cent from the year previous, with an operating loss of KRW98 billion ($86.46 million).
Questions & Answers
Q.Why has Skinfood filed for court receivership?
Why has Skinfood filed for court receivership?
Skinfood has filed for court receivership due to increasing financial losses and difficulty securing liquidity. The company stated it has excessive debt and believes court restructuring will benefit all parties, including creditors.
Q.What factors contributed to Skinfood's financial difficulties?
What factors contributed to Skinfood's financial difficulties?
Skinfood's former popularity was impacted by the 2015 MERS outbreak and diplomatic disputes between Seoul and Beijing. Both events affected the brand's key overseas markets, leading to financial losses.
Q.What are Skinfood's plans to improve its financial situation?
What are Skinfood's plans to improve its financial situation?
To improve its standing, Skinfood plans to sell off some of its overseas business rights. The company also intends to expand its online sales channels as part of its strategy.
Q.How much did Skinfood's sales decline last year?
How much did Skinfood's sales decline last year?
Skinfood's sales last year were KRW126.9 billion, representing a 25 per cent drop from the previous year. The company also reported an operating loss of KRW98 billion.
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