[비즈한국] The corporate rehabilitation process for Mula, the operator of the nation's first athleisure brand 'Mulawear,' has been terminated. Mula had attempted a turnaround by submitting a reorganization plan and pursuing a pre-approval merger and acquisition (M&A), but these efforts ultimately fell through. Immediately following the termination of the rehabilitation process, Mula effectively wound down its business by shutting down its online store. Mula, which once led the domestic athleisure market alongside Andar and Xexymix, now faces the risk of disappearing into history as it fails to overcome its financial difficulties.
On June 25, the Seoul Rehabilitation Court decided to terminate Mula's rehabilitation process. The court stated the reason for the termination as follows: "The debtor failed to submit a reorganization plan within the period set or extended by the court, and it is evident that the liquidation value of the debtor's business exceeds its going-concern value." The deadline for Mula to submit its reorganization plan was June 19.
Mula, which had continued its online and offline operations even during the rehabilitation process, announced the closure of its Mulawear online store on June 26, the day after the termination of the process. It suspended all new orders and deliveries, and is only operating its customer service center until July 11. Mula notified customers, stating, "We are inevitably closing our online store," and added, "We intend to responsibly handle all existing orders and refund-related matters to the end." It was confirmed that some offline stores also closed around the same time.
Established in 2013, Mula is the company that created 'Mulawear,' the nation's first athleisure clothing brand. It was once popular as a leading domestic athleisure brand alongside Andar and Xexymix. However, it faced a liquidity crisis due to excessive advertising spending in response to the rise of competitors, compounded by the impact of COVID-19.
After recording a net loss of 14.1 billion won in 2020, Mula failed to turn a profit despite increasing its revenue. In 2024, it generated 38.1 billion won in revenue but recorded a net loss of 7.4 billion won. As losses accumulated, its total capital turned negative starting in 2022, leading to a state of complete capital erosion. By 2024, total capital reached –18.7 billion won, and cumulative deficits hit 35.2 billion won. Eventually, Mula filed for corporate rehabilitation in January 2025.
The rehabilitation process was not smooth, either. Although the Seoul Rehabilitation Court commenced the process on February 12, 2025, the deadline for submitting the reorganization plan was extended a staggering 13 times until last May. It is known that the delay was caused by a dispute over trademark rights and collateral (inventory) with Han I&T, one of the creditors. Furthermore, Mula, which was pursuing a pre-approval M&A, issued sale notices to find a new owner in September 2025 and again at the end of last May.
Typically, if a corporate rehabilitation process is terminated before the approval of a reorganization plan, the administrator's status and authority expire, and the authority of the company's management, including the CEO, is restored. Creditors can also resume exercising rights that were prohibited during the rehabilitation process, allowing for compulsory execution such as provisional seizures and auctions to recover debts. If the debtor does not file an appeal with the court within 14 days of the public notice date, the decision to terminate the rehabilitation becomes final.
It was confirmed that Jo Hyun-soo, the CEO of Mula who served as the administrator, submitted an 'Administrator's Opinion on the Progression of Rehabilitation and Extension of Pre-approval M&A Deadline (Re-application)' to the Rehabilitation Court on June 18, the day before the deadline for the reorganization plan. Although the final bidding for the open competition to sell Mula was scheduled for June, it is presumed that the acquisition process could not be completed within the timeframe.
Mula's current financial situation is dire. Revenue for 2025 stood at 10 billion won, a 74% decrease compared to the same period the previous year. Total capital fell to –23 billion won, worsening the complete capital erosion. With cumulative deficits rising to 39.5 billion won, it appears unlikely that the company will be able to properly repay its debts even if it proceeds toward bankruptcy.