MCM of Sung Joo Group: An MCM Licensee Wrote a Creation Myth in the Luxury Industry

Abstract

In 1994, Sung Joo International was an international distributor of premium and luxury fashion brands in Korea. During that time, Sung Joo International successfully built partnerships with designers such as Gucci, Sonia Rykiel, Yves Saint Laurent (YSL) and Mode Creations Munich (MCM) until 1999. Due to the premillennial global financial crisis, Sung Joo International strategically terminated all their international distribution agreements in 1999 — except their agreement with MCM. The brand gained notoriety among Korean, female college students within the masstige handbag market. Therefore, Sung Joo International acted as the official MCM licensee in Korea, from 2000 to 2004. Based upon a $4 million increase in sales volume, the Sung Joo Group purchased MCM in 2005 with the intent of transforming it into a full-fledged, global luxury brand. Since 2005, the Sung Joo Group has successfully molded MCM into an emerging, semi-luxury brand of iconic leather goods in China, the United States, Korea and Europe. Several innovative steps, such as new product designs, competitive pricing strategies, remerchandising, retail store expansions and collaborative marketing, preceded their entry into the international market. Such steps have been important for the elevation of MCM's brand prestige. The public image of Sung Joo Kim, founder and chairperson of Sung Joo International, has been vital to the rebuilding of MCM's brand image. Under her leadership, Sung Joo International was officially dubbed the “Sung Joo Group.” Her presence in news media and MCM advertisements has since broadened MCM's aspirational appeal. MCM is currently valued at $320 to $400 million, exceeding the $250 million in sales during MCM's 1993 preacquisition height. Within 5 years, Sung Joo Kim expects MCM to become a luxury brand that will be competitive with more established brands such as Louis Vuitton and Gucci.