Thomas White Global Investing
Emerging Leaders

Emerging Leaders

December 2012

Sung-joo Kim, Chairman Sungjoo Group and MCM Holdings AG


“We’re a new school of brand. Our target is 21st century, global travelling, high-powered men and women who know what to buy and how to buy. It is a quality product,”

— Sung-joo Kim in an interview with Drapersonline.


A few decades ago a woman born into a wealthy South Korean family had one commanding duty: marry a man from a similarly wealthy family, raise children and dedicate her life to the domesticity of the new household. So, what happened to the woman who didn’t perform this chief duty in life? Well, ask Sung-Joo Kim, one of South Korea’s famous self-made woman entrepreneurs, who as the Chairman of Sungjoo Group and MCM Holdings AG, controls hundreds of luxury accessory retail outlets spread across more than 30 countries.

When Sung-joo wanted to setup her fashion retailing business three decades ago in South Korea, she not only had to take on the male-dominated South Korean society and the old boy’s network made up of billion-dollar chaebol owners, but also her family’s scepticism about her ambitions.

Only a few years ago Sung-joo had done things that were considered ‘unthinkable’ to her family. Sung-joo’s father, Soo-keon Kim, the founder and the chairman of Daesung Group, one of South Korea’s prominent chaebols or industrial conglomerates, wanted his daughter to be married into a wealthy family. Hardly interested in traditional arranged marriages, Sung-joo pleaded with her father to let her pursue higher studies. But even before her studies were completed, Sung-joo fell in love with a British-Canadian student in Harvard and married him. Furious at his daughter’s perceived transgression, the family patriarch disowned her and even formally took his daughter’s name out of the family registry. Writing for the Bloomberg Businesweekmagazine, the gritty Sung-joo Kim recalls “My parents wouldn’t talk to me. I had gone against their wishes, and there’s nothing worse in Confucian tradition.”

With her ties to family cut-off, Sung-joo was forced to take up a job as a manager at the New York-based Bloomingdale’s, the greatest fashion retailer of the time. For Sung-joo, knocking the doors of Bloomingdale’s was serendipity of sorts. Marvin Traub, the legendary head of Bloomingdale’s, took Sung-joo under his wings and put her through a rigorous schedule that one day would make Sung-joo the owner of a luxury retail empire.

Despite her stellar rise up the U.S. retail landscape, Sung-joo longed to be back in South Korea. After five years of separation, Sung-joo mustered up her courage and went to meet her father, in an effort to impress him with what she had learned as an independent woman. Dazzled as he was over his daughter’s tenacity, the patriarch still viewed his youngest child with scepticism. Even though he had divided his family empire among his sons, he opened his heart to make a business loan of roughly $300,000 to Sung-joo to start her business.

Sung-joo could not have been more grateful to her father. She took the money and put it to good use, drawing from the stringent training she received at Bloomingdale’s to open a fashion retail store in downtown Seoul, South Korea’s capital. At that time, even though the South Korean economy was growing leaps and bounds, many western corporations knew the country more as an exporter of goods rather than as a fertile market for their goods. Sung-joo, however, saw the world differently. In the increasing prosperity of her fellow South Koreans, she saw an opportunity to sell things.

Sung-joo made a pitch to Gucci, one of the world’s best known luxury brands and soon became an exclusive franchisee for Gucci in Korea. Before long, she added other brands like Yves Saint Laurent and MCM as franchises. With Sung-joo’s nascent business empire burgeoning, her stores multiplied by the dozens in no time. Everyone, ranging from the business dynasties of South Korea to Sung-joo’s own father, stood in awe of the meteoric rise of a woman considered an outcast only a few years before.

But Sung-joo’s success did not stop there. Thanks to her fortitude, even the Asian financial crisis of 1997, which erased a handful of chaebols from Korea’s business map, was not a deterrent. When the crisis struck, Sung-joo proved to be as decisive as she was creative. A survivor, she trimmed off a great part of her company, even selling her treasured Gucci franchisee rights to weather the crisis.

When growth returned soon afterwards in the early 2000’s, Sung-joo was overseeing a nimbler firm that was a money spinner. With this cash, Sung-joo acquired the struggling German-based MCM Holdings AG in 2005. During its halcyon days of the early 1990’s, MCM was a celebrated brand that challenged the likes of Gucci and others. But MCM lost its luster in the early 2000’s, as its German founder became embroiled in tax issues in Germany and distribution networks across the world suffered.

Once at MCM’s helm, Sung-joo did what she was good at: bringing focus. The Korean entrepreneur injected new capital, trimmed the overstretched distribution network, boosted employee morale, and revamped the product line. Within a few years, MCM sales grew threefold to $400 in 2011. MCM’s swift revival earned Sung-joo the nickname ‘Genghis Kim’ after the Mongol warrior Genghis Khan who invaded Eurasia at a lightning pace. The Wall Street Journalcalled MCM’s new avatar the ‘Eastern Makeover.’ These days, Sung-joo, who counts 400 women among her 500 employees, is betting on China for further growth. She plans to open 100 new stores in the Middle Kingdom over the next five years and double sales to $1 billion. Going by her past success, ‘Genghis Kim’ may well reach that milestone before her targeted date.

 

 

 

 

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