[THE INVESTOR] Disgraced Nature Republic chief executive Jung Woon-ho on June 21 stepped down from his post and also as board member in the wake of the latest scandals involving his alleged embezzlement and illegal lobbying.

Senior vice president Kim Chang-ho, 58, was named to replace Jung. 


“We decided on Kim after reviewing who would be the best choice at this time,” the company said in a statement following a board meeting.

Kim started his career at LG Household & Health Care in 1984. He also worked at The Face Shop, which was founded by Jung in 2003.

Nature Republic said Kim’s main role would be crisis management -- normalize company transactions and eventually rebuild Nature Republic’s tarnished reputation.

Nature Republic’s image as a clean-cut brand is seen to have suffered much damage due to the former CEO’s irregularities.

The company, created by the founding members of The Face Shop including Jung, is currently the country’s fifth largest offline cosmetics brand.

However, some of the firm’s franchised shops are now rumored to be considering jumping ship.

Profitability also took a hit. 



In the first quarter of 2016, Nature Republic’s operating profit stood at 1.9 billion won ($1.6 million), which was just a fourth of the amount a year earlier. Net profit also plummeted to 1.5 billion won from 6.5 billion won.

Meanwhile, internal conflict is rampant. Jung’s sister and brother, who currently hold high-ranking positions at Nature Republic, have been feuding with some of the founding members, who are not part of the Jung family.

Jung was named as CEO of Nature Republic -- an unlisted company -- in 2010 following his success with The Face Shop. While he was at the helm, Nature Republic’s profit rose by 20 billion won ($17.2 million) between 2010 and 2016, which resulted in the value of Nature Republic CEO Jung Woon-ho’s 73.8 percent hold of company shares surging to 73.2 billion won.

By Kim Ji-hyun (jemmie@heraldcorp.com)