Clio puts on its best face to woo Asia

L Capital's Mr Thakran (above) says Clio (left) will ride the Korean wave and tap on LVMH platforms Sephora and DFS to expand in China and South-east Asia.
L Capital's Mr Thakran says Clio (above) will ride the Korean wave and tap on LVMH platforms Sephora and DFS to expand in China and South-east Asia. PHOTOS: L CAPITAL ASIA
L Capital's Mr Thakran (above) says Clio (left) will ride the Korean wave and tap on LVMH platforms Sephora and DFS to expand in China and South-east Asia.
L Capital's Mr Thakran (above) says Clio will ride the Korean wave and tap on LVMH platforms Sephora and DFS to expand in China and South-east Asia.

S. Korean cosmetics firm could open S'pore store as part of growth with LVMH injection

The South Korean cosmetics firm Clio could open a flagship store here within months as it gears up expansion plans in the wake of a cash injection from the private equity arm of LVMH Moet Hennessy Louis Vuitton.

L Capital Asia has invested US$50 million (S$68 million) in Clio and will help the company expand quickly across China and South-east Asia, capitalising on the world's appetite for Korean cultural exports.

It will be able to call on the support of beauty retail platform Sephora and duty-free shop operator DFS, which are both owned by LVMH.

Plans are already in the works for a Club Clio outlet here, L Capital managing partner Ravi Thakran told The Straits Times yesterday.

The Korean wave has sprung from the entertainment realm into food, fashion and beauty, and is no passing fad, he said: "We are in the fashion industry and we can very much make out what is fad and what is not.

  • CLIO COSMETICS

  • Established in 1993.

    Sold in more than 800 stores in Korea.

    Strong retail presence in over 2,700 counters overseas, mainly focusing on China, Hong Kong and Taiwan.

    Biggest market is Korea (55 per cent), followed by China (35 per cent)

    Gunning for an IPO in November, target valuation US$1.1 billion (S$1.5 billion) to US$1.4 billion

"Sometimes, we do ride fads as well, but this is clearly not a fad. It has been over a decade now and Korea is clearly the trendsetter. Even in Japan, Korean companies are doing so well (although Japan) was leading the market in the 1990s."

"Korean women are setting a trend for skincare and colour cosmetics."

Talks began last year and Mr Thakran said his team beat 10 other private equity contenders to the deal. L Capital has a minority stake but it is the second-largest shareholder after Clio chief executive Han Hyun Oak.

Ms Han was analysing market sectors for a research institute when the cosmetics industry got her attention.

"I found the industry has a very specific feature - segmentation is possible. Big brands can make it, but small brands also maintain their position and special character. And I could make this opportunity much bigger,"she said.

Clio plans to sell 12.5 per cent of its stock through a public listing on the Kosdaq, South Korea's secondary board, in November. Ms Han is eyeing a target valuation of between US$1.1 billion and US$1.4 billion.

South Korean cosmetic exports reached US$2.45 billion last year, up 53.1 per cent from 2014. The country also become the second- largest cosmetics exporter to China after France in 2015, with US$1 billion worth of shipments.

Clio has a 5 per cent share of South Korea's colour cosmetics market, said Ms Han.

Earlier this week, Goldman Sachs and Bain Capital Private Equity agreed to acquire a majority stake in cosmetics firm Carver Korea for more than 350 billion won (S$418 million).

This is not L Capital's first deal in South Korea.

In 2014, it invested about US$80 million in K-pop agency YG Entertainment.

Outside of South Korea, Mr Thakran is bullish on China, movies and organic products in India and gourmet and organic food in Australia.

A version of this article appeared in the print edition of The Straits Times on July 23, 2016, with the headline 'Clio puts on its best face to woo Asia'. Print Edition | Subscribe