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Blackstone-backed king of designer handbag becomes a billionaire
[SEOUL] Meet the Henry Ford of designer handbags.
Kenny Park, 62, has been making them for luxury brands including Michael Kors, Marc Jacobs and Coach for more than three decades and his Simone Holdings claims it accounts for about 30 per cent of the U.S. market and 10 per cent of the world's.
"Simone is the biggest original design manufacturer for global high-end brands," said Ryou Hyo-sang, dean of the business school at CHA University in Pocheon, who wrote a book about the company. Mr Park, the founder and chairman, was first "to roll out a mass-production system for designer bags 30 years ago." The South Korean firm also owns landmark buildings around the world, helping push Park's net worth to US$1.2 billion, based mostly on his flagship Simone Accessory Collection Ltd., according to the Bloomberg Billionaires Index. Park and his family own 61.9 per cent of the closely held company, which declined to comment on his net worth.
Parent Simone Holdings spun off the main business into Simone Accessory in 2015, when Blackstone Group LP, the world's biggest private equity firm, invested US$300 million for a 30 percent stake. Blackstone's investment was driven by its "confidence in Simone's growth prospects," Mr Park said in a 2015 interview with a local newspaper. Simone Acc. reported revenue of 1.1 trillion won (S$1.32 billion) for the fiscal year ended June 2016, according to a financial statement.
Blackstone declined to comment on the deal, while Mr Park told another local newspaper in 2016 that the buyout firm "chose Simone as a bridgehead for expansion into the fashion business." Mr Park founded Simone, his wife's nickname, in 1987, after discovering that both supply and the number of European craftsmen were in decline, while the market for designer bags was growing. He sensed an opportunity and pounced.
"Many brands were seeking a manufacturer who could deliver their orders with low costs, high quality and speed," said Mr Ryou, who interviewed Mr Park for his book. "Park approached them with a question: 'Why not us?'" Today Simone has six factories in countries including Vietnam, Cambodia and China, churning out handbags for more than 10 brands, according to the company, which said its products are usually sold in stores for about 10 times more than their delivered prices.
His passion led him to set up a museum dedicated exclusively to handbags in the heart of Seoul's Gangnam district. The museum, which opened in 2012, displays a collection of more than 300 bags, including one dating to the 16th century. CNN, in a story about the opening, referred to the museum as "every boyfriend's nightmare." Washington Harbour After years of focusing on handbags, Park set out to expand his empire. He established investment companies under the Simone umbrella, in which he and his family control an 88.9 per cent stake, to focus on real estate investments.
In 2013, a Simone subsidiary led a consortium of South Korean investors in the US$370 million purchase of the Washington Harbour complex along the Potomac River in the U.S. capital.
Another unit, Simone Investment Managers Co. Ltd., oversaw 1.1 trillion won as of May 2017, according to its website, and has been scooping up prized real estate assets around the globe. In 2016, it was part of a consortium that acquired De Rotterdam, a Dutch building designed by famed architect Rem Koolhaas's Office for Metropolitan Architecture for about 450 billion won.
The company declined to disclose if Mr Park has made any real estate investments individually.
"I'd like to pursue acquisitions of foreign brands when there are chances," Mr Park told a local newspaper in 2016 on why he set up investment companies. "Blackstone will play an important role as a partner."