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Fashion Company E-Land World Adds Information and Communications to Business Objectives… A New IT Challenge?

[비즈한국] It has been confirmed that E-Land World added three new business objectives on November 10: "information system consulting," "information system design," and "information system development, services, and supervision." E-Land World's core business is fashion-related, and it has had no previous connection to information technology (IT). Consequently, speculation is emerging that E-Land World may be launching a new information system business.

E-Land World serves as the holding company for the E-Land Group. If E-Land World directly enters a new business, it is expected to have a significant impact on the entire group. E-Land Group has not shown a strong presence in new ventures thus far. E-Land Kim's Club entered the convenience store business in 2023 but withdrew without achieving any notable results.

While E-Land World's revenue is on an upward trend, its outlook is not necessarily bright. Shin Joong-hak, a senior researcher at Korea Investors Service, assessed, "Due to the premiumization of department stores and the expansion of the online retail market, the competitiveness of outlets and discount stores has declined compared to pre-COVID-19 levels, which is reducing performance in the retail sector and acting as a major factor in the decline of profitability on a consolidated basis," adding, "Operating performance could decline sharply due to earnings volatility resulting from business diversification across affiliates."

It has also been confirmed that Choi Jong-yang, Vice Chairman of E-Land Group and CEO of E-Land World, has been reappointed. Vice Chairman Choi's original term ended on November 4. Since his reappointment has been decided, he is now tasked with proving his capabilities by driving performance growth.

E-Land World distributes brands such as SPAO, Mixxo, and New Balance in Korea. Most are related to fashion, and there have been no IT businesses like information systems. The prospects for the information systems business are positive. An IT industry official stated, "Since many organizations globally have pursued digital transformation following the COVID-19 pandemic, it has reached a point where organizational operations are difficult without information and communications or information systems," adding, "There is significant room for growth in related businesses for the time being, such as strengthening information system services and cyber security services."

For E-Land World to directly enter IT-related businesses, significant investment in organizational structure would be required. Alternatively, there is the option of conducting business through a subsidiary. In this case, E-Land World would likely focus on providing business support.

Looking at the E-Land Group as a whole, E-Land Innople is currently engaged in IT-related businesses. E-Land Innople is a second-tier subsidiary of E-Land World. Its recent performance has been stagnant. According to audit reports, E-Land Innople's revenue only increased by 0.88%, from 44.7 billion won in 2023 to 45.1 billion won in 2024. During the same period, operating profit fell by 24.14%, from 2.2 billion won to 1.7 billion won. Of the 45.1 billion won in revenue last year, 26.3 billion won (58.28%) was generated from E-Land affiliates and related parties. Given that there is a stable client base within the E-Land Group, it is difficult to view last year's performance as satisfactory.

However, market competition is expected to be fierce. Numerous domestic companies, ranging from large conglomerates to mid-sized firms, have already entered the information systems market. Major domestic corporations such as Samsung SDS018260, Hyundai AutoEver307950, and LG CNS already maintain a strong presence in the information systems business. Some analysts even suggest that the domestic information system market is already saturated.

E-Land World stated that it is not launching an information systems business immediately, but rather preparing for it. They did not disclose specific timing or methods for market entry. Additionally, the recent fire at the E-Land logistics center in Cheonan makes it difficult to focus on new businesses for the time being. An E-Land Group official stated, "It is a measure taken for preparation to enhance digital transformation and online competitiveness."