The E-Land Group is considering selling one of its womenswear brands in the face of heavy debt and falling credit ratings, the group said Tuesday.
The brand up for sale is Teenie Weenie, a womenswear brand affiliated with E-Land International Fashion Shanghai Co., owned by the group‘s Chinese arm. The brand broke into the Chinese market in 2004, and became the first Korean brand in China to reach 500 billion won ($419.5 million) in annual sales last year.
Since Teenie Weenie is a major part of E-Land‘s Chinese business, the brand‘s sale would have a significant impact on the group’s pre-IPO in China planned for later this year.
The potential sale comes after NICE cut E-Land Group‘s credit rating from “BBB+” to “BBB” on Sunday, citing the group’s high level of debt and its slow-moving financial restructuring efforts.
E-Land currently has 5.5 trillion won in debt, with short-term debt accounting for 3.2 trillion won, according to the firm‘s 2015 corporate disclosure.
Industry watchers say that the group’s falling credit ratings may lead creditors to refuse extensions on repayment, creating a cash flow crisis within the company.
By Won Ho-jung (
hjwon@heraldcorp.com)