Online shopping platform 11Street, a subsidiary of South Korea’s largest mobile carrier SK Telecom, may join the bidding contest for internet fashion store W Concept Korea.
The company received information packages several weeks ago on the sale of an 80% stake in W Concept, which is owned by IMM Private Equity, industry sources said. The first round of bidding is expected to be held later this week.
Acquiring W Concept could be an option as 11Street seeks to expand its business and customer base, as the firm wants to raise money from Amazon, industry watchers said.
SK Telecom announced on Monday (November 16) that it had struck a partnership with the U.S. retail giant to enable Amazon’s products to be sold on 11Street’s website. Depending on the company’s future performance, Amazon will invest in securities with warrants that give it the right to buy 11Street’s shares.
W Concept specializes in cosmetics, clothes and other fashion items, which could appeal to industry players seeking synergies with their businesses. The site’s U.S. operations could also attract interest from potential buyers, including 11Street.
But it is uncertain whether 11Street would remain in the race even if it did make an offer, industry watchers said, citing the low profitability of the U.S. operations.
W Concept’s U.S. unit recorded less than 30 billion won ($27 million) in gross merchandise value (GMV) in 2019, which is equivalent to only a tenth of the South Korean operations’ GMV. The U.S. unit also has been making losses for years.
Other local commerce platforms are said to have shown interest in W Concept. IMM Private Equity also reportedly approached several private equity firms about the sale. (Reporting by Ar-rum Rho)