1. Pond Group’s Acquisition of Allgrace: What Happened?
On July 29, 2025, Pond Group announced the acquisition of cosmetics company Allgrace for 19 billion KRW. Through this acquisition, Pond Group plans to diversify its clothing-centric business portfolio and officially enter the cosmetics market.
2. Why Acquire Allgrace?
Pond Group decided to enter the cosmetics market to overcome the growth limitations of its existing apparel business and secure new growth engines. In particular, they expect synergy effects with ‘Most’, a cosmetics distribution company acquired earlier. The growth potential of Allgrace’s main brand, ‘Celeve’, is also an attractive factor. In Q1 2025, Pond Group recorded consolidated revenue of 106.5 billion KRW and operating profit of 14.4 billion KRW, showing growth, but the high debt ratio remains a risk factor.
3. Acquisition: Opportunity or Crisis?
- Positive Effects: Risk diversification through business diversification, synergy with ‘Most’, growth of the ‘Celeve’ brand, increase in sales and profits.
- Negative Effects: Increase in high debt ratio, post-acquisition integration risk, intensified competition in the cosmetics market, raw material price and exchange rate fluctuation risks.
The macroeconomic environment must also be considered. Rising raw material prices, interest rate hikes, and global logistics instability can negatively affect Pond Group’s profitability.
4. What Should Investors Do?
Investors should closely monitor stock price fluctuations after the announcement and carefully review Pond Group’s financing plans for the acquisition, post-acquisition integration strategy, and risk management measures. The future of Pond Group will depend heavily on how these factors play out.