SK Networks, along with Lotte Group and Shinsegae Group, have submitted letters of intent (LOI) to bid for electronics chain Hi-Mart which is selling a 65 per cent stake.
The Korean company with a diverse range of businesses, including an information communication technology division which sells handsets, an energy and motor vehicles division which runs gas stations, a rental car business and auto repair shops, a fashion division which retails apparel, a hotel division and a trading and investment division is involved in trading, exploration and procurement.
SK Networks retail business is concentrated on energy and telecom service. The company sells handsets for subscribers to SK Telecom and its subsidiary runs the mobile digital device retail chain with 50 stores nationwide.
The company is known to be interested in venturing more into domestic retailing. Recently, it bid for a stake in Woongjin Coway, a water purifier company. Through Hi-Mart, SK Networks could enter a new business area in electronics goods retailing, its stores currently limited to mobile digital devices.
Hi-Mart generates seven per cent of its revenues from mobile device sales. The mobile business books its revenues and profits differently than other segments: Hi-Mart works as a sales agent for major telecos and takes five to seven per cent of a subscriber’s monthly service charge for two years as an agency fee.
The major shareholders plan to conclude the sell-off by end of June.