SEOUL, KOREA - Home Plus, Korea's major discount outlet operator, is currently negotiating to acquire C-Space, the convenience store chain owned by Hanwha Group. If Home Plus pulls it off, it will add 100 or so stores to its "365 Plus" stores and overtake Shinsegae's WithMe, the No. 5 convenience store franchiser, in terms of number of store locations.
A Hanwha Group official said on November 18, "We are in exclusive talks with Home Plus and may be able to finalize the deal by the year's end once price negotiations are completed." Since jumping into the convenience store market in February 2012, Home Plus has not shown any tangible results. In terms of store number, 365 Plus is way behind that of CU, GS25, 7Eleven, and Ministop. It was even surpassed by the new entrant WithMe of Shinsegae Group that began the convenience store business since late last year. As of the end of October this year, the store number of WithMe and 365 Plus is 314 and 205, respectively.
Despite the undiminished rumor of a takeover by other retailers, Home Plus is actively pursuing expansion in Home Plus Express (smaller-sized supermarkets) and convenience stores. For the past five years, the convenience store industry has grown 17 percent on average a year. This is in stark contrast with the big box retail industry that has seen consecutive shrinking in sales revenue since the second quarter 2012.
C-Space is owned 100 percent by Hanwha Galleria, Hanwha Group's department store unit. It has about 100 stores across the country with focus on Gyeonggi Province and the southeast. It posted sales revenue of 45.4 billion won last year. The price tag for the deal is estimated at just below 10 billion won.
Article provided by The Korea Economic Daily
