E-Land seeks to sell 9 food & beverage brands, Maeil reports

E-Land seeks to sell 9 food & beverage brands, Maeil reports

E-Land Group, a prominent South Korean conglomerate, has announced plans to sell nine of its food and beverage (F&B) brands as part of a broader reorganization strategy. The move is aimed at streamlining operations and focusing resources on its core brand, Ashley Queens.

E-Land Eats, a subsidiary of E-Land Group, was established in 2019 and operates 19 restaurant brands, including Ashley, Nature Byeolgok, Pizza Mall, and Roone. Among these, six dining brands and three cafe and dessert brands are being put up for sale. The brands up for sale include Bangung, Steakers, Teru, Tefanyaki Taguo, Asia Moon, Sponsor, The Cafe, Cafe Lugo, and Perkeno [1].

The decision to sell these non-core brands is part of E-Land's strategy to concentrate on its most profitable assets. Ashley Queens, the company's core brand, accounts for about 70% of E-Land Eats' total sales. Last year, Ashley opened 33 new stores, bringing its total to 110 [2].

The sale of these brands is expected to generate around tens of billions of won, given their relatively small EBITDA of 18 billion won in sales and 2.3 billion won in operating profit. However, the process may take some time due to the high number of brands already listed for sale in the domestic market [1].

The move comes amidst policy risks. The Democratic Party of Korea has proposed revisions to the Affiliate Business Act, which could impact the transfer of costs to franchisees. Unfair cost transfer could result in penalties, including up to two years in prison or a fine of up to 100 million won [1].

E-Land Eats is currently in the process of a package deal to sell the nine brands, with the aim of finding a willing buyer through a host company [1].

References:
[1] https://www.mk.co.kr/en/stock/11387021
[2] https://www.mk.co.kr/en/stock/11387034