[비즈한국] Peace Peace Studio, which successfully pulled off an IPO with 7 trillion won gathered in general subscriptions, is seeing its stock price trade below the offering price following its listing. As some point out that the growth expectations reflected during the IPO process might have been a bit too high, Peace Peace Studio now faces the task of proving its growth potential through overseas business and other avenues.
Peace Peace Studio Plummets on First Day of KOSDAQ Listing
Peace Peace Studio, operator of the brand 'Mardi Mercredi', entered the KOSDAQ market on the 8th. While it drew high expectations by succeeding in its general subscription, the report card it received on the first day of listing fell short of those expectations.
Peace Peace Studio opened at 32,000 won, 48.84% higher than its IPO price of 21,500 won. The stock price once soared to 42,000 won due to a rush of buying early in the day, but the upward trend did not last. As profit-taking sell orders poured in, the stock price quickly turned downward, ending its first day of trading at 13,730 won, down 36.14% from the offering price. The weak trend continued the next day, and the closing price on the 9th was 12,100 won, down 11.87% from the previous day.
Some in the securities industry analyze that the market plunge affected the poor stock performance immediately after listing. On the 8th, the domestic stock market was shaken significantly, to the point that a level 1 circuit breaker and a sell-side sidecar were triggered in succession. It is interpreted that as market-wide volatility increased, such as the KOSPI plunging by more than 8%, investor sentiment toward new listings also cooled rapidly.
Peace Peace Studio is a fashion and lifestyle company that operates Mardi Mercredi. The brand was launched in 2018 by CEO Park Hwa-mok, a former graphic designer, and his wife, Brand Director Lee Soo-hyun, with the corporation established in 2020. Mardi Mercredi is gaining popularity among young consumers for its signature designs featuring floral graphics.
Peace Peace Studio was considered a highly anticipated stock in the first half of the IPO market this year. In the demand forecast for institutional investors last May, more than 2,000 institutions participated, recording a competition rate of 847.76 to 1. As about 97% of the participating institutions suggested prices at or above the top of the desired offering price band, the final offering price was set at the top of the band, 21,500 won. The subsequent general investor subscription was also heated. The general subscription competition rate recorded 1,194.94 to 1, and 7.28 trillion won was gathered in subscription deposits alone.
Behind the success of the IPO was Peace Peace Studio's steep growth trajectory. Sales of Peace Peace Studio, which were at the 900 million won level at the time of its incorporation in 2020, expanded to 117.9 billion won last year. This is a growth of more than 130 times in five years. It is considered a rare growth case in the domestic fashion industry. Analysts say that the rapid growth speed of reaching 100 billion won in annual revenue in a short period, combined with the highlighted possibility of overseas expansion into markets like Japan and China, fueled investors' expectations.
Slowing Profitability, Will They Find an Overseas Breakthrough with IPO Proceeds?
As the stock price continues to trade below the offering price after listing, Peace Peace Studio faces the task of proving its growth potential and profitability. Critics in the market point out that since the growth of its flagship brand has slowed, it needs to secure additional growth engines through new brands and overseas business.
A burden factor for Peace Peace Studio is that most of its current performance is concentrated on 'Mardi Mercredi Women'. Last year, sales of the Mardi Mercredi Women line were 95.9 billion won, accounting for 81% of total sales, and it accounted for 78% of total sales in the first quarter of this year. The problem is that the growth of Mardi Mercredi is showing signs of slowing. Sales of Mardi Mercredi Women decreased from 101.2 billion won in 2024 to 95.9 billion won last year.
Peace Peace Studio stated that it is pursuing business diversification into beauty and lifestyle categories along with the discovery and incubation of new fashion brand IPs to reduce revenue reliance on Mardi Mercredi. However, assessments suggest that it has not yet achieved meaningful results, with the revenue portion of new brands still in the single digits.
Peace Peace Studio has shown high profitability, which is rare in the fashion industry. Unlike typical domestic fashion companies whose operating profit margins stay in the single digits, Peace Peace Studio maintained double-digit operating profit margins, attracting investors' interest during the IPO process. However, a downward trend in profitability has been continuing recently.
Peace Peace Studio recorded 117.9 billion won in consolidated revenue last year, a 3.6% increase from the previous year (113.8 billion won). However, operating profit was 16.7 billion won, about 40% less than the previous year (28.2 billion won). The operating profit margin fell from 24.75% in 2024 to 14.19% last year, and further dropped to 8.66% in the first quarter of this year.
Peace Peace Studio explained the decrease in operating profit as: "An increase in selling, general and administrative expenses due to one-time costs such as stock compensation expenses, along with investments for business expansion such as major flagship store renovations and construction, overseas business expansion, and hiring of personnel."
While Peace Peace Studio is pinning its hopes on overseas business, it has yet to show significant results. Peace Peace Studio's overseas sales slightly decreased from 29.042 billion won in 2024 to 28.76 billion won in 2025.
In this situation, with Peace Peace Studio deciding to inject a significant portion of its IPO proceeds into targeting overseas markets, there are prospects that future overseas performance will be a key variable in the re-evaluation of corporate value. According to the securities issuance report, Peace Peace Studio stated that it would use approximately 29 billion won, more than half of the 48.8 billion won raised through this IPO, for overseas market expansion.
Seo Seung-wan, Co-CEO of Peace Peace Studio, said at an IPO press conference last month, "By directly controlling quality and other factors, we will achieve 100 billion won in sales in China by 2028," adding, "The goal is to expand the proportion of overseas sales to 50%."