CJ Olive Young expands alcoholic beverage business ahead of IPO

The Korea Times

The Korea Times

Business

Thu, September 28, 2023 | 16:23

Companies

CJ Olive Young expands alcoholic beverage business ahead of IPO

Posted : 2023-05-31 17:02

Updated : 2023-06-01 10:29

A model picks an alcoholic beverage from a refrigerator at a CJ Olive Young store in Seoul, in last October. Courtesy of CJ Olive Young

By Kim Jae-heun

CJ Olive Young, a local health & beauty store chain, has been expanding alcoholic beverage sales as it prepares for an initial public offering (IPO), according to industry officials, Tuesday.

CJ Group heir Lee Sun-ho

Last October, CJ Olive Young began selling 15 kinds of alcoholic beverages at 70 stores in major commercial districts in Seoul. The firm saw its sales of wines and beer soar in April, increasing by 60 percent compared to last October, and now 100 stores are selling more than 100 kinds of alcoholic beverages.

The sales have also helped Olive Young's efforts to strengthen its online business. Selling traditional liquor on its open market platform has been increasing its gross merchandise value in a short period of time. Currently, only Korean traditional liquor can legally be purchased online and delivered to homes, the company said.

CJ Olive Young's expansion of alcohol sales and the conversion of its online mall to an open market platform are seen as the company's second bid to go public. It attempted to get listed on the local bourse in November 2021, but canceled the plan last August due to a local stock market slump.

"For a retailer that mainly sells cosmetics, selling alcohol is one of the fastest ways to boost revenue. Nobody knows when Olive Young will go public except the company itself, but increasing the company sales by selling alcoholic beverages is the fastest and easiest way to prepare for an IPO," a local retail firm official said.

However, CJ Olive Young said it has reflected only the current "healthy pleasure" trend in the retail business to offer alcohol products to its main customers ― women in their 20s and 30s.

The timing of the company's IPO plan can be tied to when CJ Group heir Lee Sun-ho succeeded the group's management rights.

CJ Olive Young is considered the key to succession as CJ Group is its largest shareholder with a 51.15 percent share. CJ Group Chairman Lee Jay-hyun's only son Lee Sun-ho holds a separate 11.04 percent share.

jhkim@koreatimes.co.kr