The boss of South Korean-based Sungjoo Group may be keeping tabs on newly acquired bag brand MCM, but her true passion could not be further from the flashy world of luxury labels.
At the height of its popularity in the mid 1980s, German luxury accessories brand MCM (Mode Creation Munich) was so synonymous with wealth and success that it earned the nickname More Cash Money. But the flashy image couldn’t be further from the one that its new owner, global luxury goods entrepreneur Sung-Joo Kim, wishes to portray.
South Korean Kim, chief executive and chairman of Sungjoo Group, claims her dream job would be as a missionary in North Korea, and donates 10% of all her company’s profits to charitable causes.
Kim, who has been described as “one of the seven most powerful women in Asia” by Asiaweek magazine and as one of global news network CNN’s “New Century Leaders”, has forged a long and illustrious career in the luxury goods market. It is a career that is all the more remarkable when you learn that Kim was born into the Korean Daeseng dynasty, which made its fortune in energy, and voluntarily walked away from this vast wealth rather than enter into an arranged marriage.
The move left her “penniless” and was an early display of the determination to stick to her principles that has characterised her career.
Following her disinheritance, Kim moved to New York in 1985 to begin her fashion apprenticeship at department store chain Bloomingdale’s under the tutelage of the legendary Marvin Traub, who was chairman at the time. After two years at Bloomingdale’s she moved back to her home country in 1990 and established Sungjoo Group.
As a woman, and a woman who refused to participate in the widespread bribery and corruption that was part and parcel of doing business in South Korea at the time, she succeeded against the odds. “Many people refused to do business with me at first because I wouldn’t [enter into bribery], but I always said no and eventually they respected me,” she says.
In 1990 Kim secured the Korean franchise deal for Gucci, which she sold back to the parent company in 1998, followed by French designer brand Sonia Rykiel, global fashion house Yves Saint Laurent and MCM. In 1996 she added the franchise agreement for Marks & Spencer to her portfolio, which she still holds today (see box on page 26), and she also operates stores for accessories brands Billy Bag and Lulu Guinness.
When the opportunity to buy MCM arose in 2005, Kim swooped. She reasoned that if she had managed to build a US$100 million (£51m) business in South Korea with MCM in just three years, then “maybe it’s better to just buy the brand” and take on the rest of the world.
Like many luxury brands before it, MCM was over-distributed, over-licensed and plagued by the problem of fakes. Kim’s plan to revive the brand and reclaim its place as a premium global fashion house followed the same three steps she had learned at Gucci; cleaning up the distribution, appointing a new creative director – she tempted Michael Michalsky from Adidas at their first meeting, with whom she “shook hands on the deal even before exchanging terms and conditions” – and implementing a strong PR and marketing campaign.
Step one involved closing 150 accounts and stores. “It was an expensive exercise, but we had to disconnect the brand from its past,” she says. Once the sales outlets had been pruned back to those that Kim felt were suited to the brand’s high-end positioning, expansion began in earnest.
In 2006 MCM opened a flagship store in Berlin, and last year it gained 12 doors in the US via department stores Blooming-dale’s, Intermix and Fred Segal. It also made its debut in Russia at Moscow’s Tsum department store and opened a standalone store in Athens.
Last year also marked MCM’s return to the UK, with the opening of concessions in Harrods and Selfridge’s in London in July and October respectively, while next month it will open its first standalone store on Sloane Street, where its close neighbours include Harvey Nichols, Dolce & Gabbana and Salvatore Ferragamo.
Celebrity interior designer Kelly Hoppen will work her minimalist magic in the 1,350sq ft store, which is spread over two floors. The colour scheme will include Hoppen’s signature taupe, black and white, set off by splashes of bright colour.
“It’s very exciting. We’re going to have the Kelly Hoppen salon on the lower floor, where women will feel they can come in, sit down and have a chat,” explains Kim. The store will feature men’s and women’s bags and luggage along with a capsule ready-to-wear collection. The hunt is already on for a second UK location, but another opening is unlikely until 2009.
To coincide with the opening of the Sloane Street store at the end of April, the brand has plundered its archive and intends to resurrect its trademark Cognac collection. The Cognac bags line is fashioned in a distinctive tan shade and covered in the MCM logo, which established the brand’s reputation as the “Louis Vuitton of Germany”.
It was one of the first lines to be discontinued when the brand was bought by Kim, who felt that it was too closely associated with the over-branding from which she wished to distance MCM. However, the revived version will be modernised by Michalsky and, without revealing more details, Kim is convinced it will “be a big hit”.
Michalsky’s background in designing luxe sports and casualwear – he was responsible for Adidas’s collaboration with Japanese designer Yohji Yamamoto – shines through in the brand’s spring 08 collection. Nowhere is it more evident than on the patent Optical bag (pictured with Kim on the previous page), which is already proving to be a bestseller with its bold, simplistic logo featuring the year 1976, when MCM was founded. “The theme for spring is yachting and leisure,” says Kim. “It is luxury casual, but it can also be carried in the city and to a business meeting.”
Kim’s aim is to produce a brand that is suited to the needs of modern consumers who lead multiple lives, encompassing family, sports, travel and business. She says the look will be understated, quality will be high (product is still made in Germany, although some is also manufactured in South Korea) and the prices will be fair.
“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,” she says.
And for that they will not be expected to pay through the nose. “We match brands such as Louis Vuitton and Gucci on quality, but are 20% to 30% cheaper,” Kim adds. “Why pay outrageous prices because of a brand name?”
The “exploitation” of women by fashion houses when it comes to both price and the sometimes overtly sexual way they are portrayed in advertising is a cause for concern for Kim. Much of her charitable activity centres on promoting the interests of disadvantaged women and helping them to gain an education and be successful in business. She even makes a guest appearance in the next series of UK TV show Britain’s Next Top Model, encouraging the women “not just to be good fashion models but to be good role models too, because young girls, including my daughter, will look up to them”.
Despite this, Kim believes that there has never been a more exciting and opportune time for women to succeed. “With the internet a woman can run a global business from a home base or a small office. They have the brain power and they can be connected all the time. A new horizon for women is emerging,” she says.
She believes this so strongly that she has no qualms about standing up in front of mostly male global business leaders at conferences and telling them that the world needs more women in business. “I have a formula for business in the 21st century,” she says. “IQ plus EQ [emotional quality] equals WQ – women’s quality.”
It is proving to be a winning formula for Kim, who is set to score sales of US$200m (£101m) with MCM this year, and has further plans to roll out more retail outlets and an online business. And the more she makes, the more she is able to give back to society, which is where her true motivation lies.