[News Space=Reporter seungwon lee] It has been revealed that leading domestic furniture brand Iloom (CEO Jung Bo-eun) engaged in a massive dividend spree immediately after transitioning to a holding company structure, despite suffering a severe performance slump that saw its net profit cut by more than half last year.

In particular, it is pointed out that warning lights have turned on for management risk control, as the proportion of internal transactions with related parties remains at an overwhelming level, even though its overseas subsidiary in Taiwan has fallen into complete capital impairment, resulting in billions of won in bad debt losses.

According to Iloom's 2025 audit report (Samil PricewaterhouseCoopers) registered on the Financial Supervisory System on March 31, Iloom's 2025 revenue was 339.8 billion KRW, a 4.3% decrease from the previous year (355.1 billion KRW). Operating profit was 6.2 billion KRW, a 6.6% decrease from 6.6 billion KRW the previous year, and net profit plummeted by 54.0% to 6.4 billion KRW from the previous year (13.8 billion KRW).

The operating profit margin was 1.8%, similar to the previous year (1.9%), but the deterioration in profitability was evident. On the other hand, the dividend was 7,000 KRW per share, with a dividend rate of 700%. The total dividend was 3.67 billion KRW, a 40.0% increase from the previous year (2.62 billion KRW), and the dividend payout ratio soared from 19.0% to 57.7%. Retained earnings were 120.6 billion KRW.

Selling, general, and administrative (SG&A) expenses were 154.4 billion KRW, down 3.8% from the previous year. Specifically, advertising expenses were 18.4 billion KRW, salary expenses were 8.8 billion KRW, and payment commissions were 11.3 billion KRW. Notably, advertising expenses were reduced by 15.0% compared to the previous year (21.6 billion KRW), showing signs of cost-cutting.

The scale of financial transactions and business transactions with related parties remains enormous. During the period, Iloom conducted purchase transactions totaling 48.8 billion KRW from related parties. Major suppliers include its subsidiary Baros Co., Ltd. (44 billion KRW), another related party Fursys Inc. (35.4 billion KRW), and its affiliate Sidiz Inc. (16.9 billion KRW).

The debt-to-equity ratio was 28.6%, and the current ratio was 155.5%, indicating that financial soundness itself is relatively good. There are no short-term borrowings, current liabilities are 36.9 billion KRW, and cash and cash equivalents are 16.2 billion KRW. Intangible assets are around 70 million KRW.

Regarding legal proceedings, one lawsuit is currently underway as a defendant, with the plaintiff's claim totaling 534 million KRW. The impact of the final result on the financial statements is currently unpredictable. Although the details of salaries and severance pay paid to key management were not disclosed separately, total employee salaries were 8.8 billion KRW and severance pay was 1.2 billion KRW.

Significant issues include a major governance restructuring and the insolvency problems of overseas subsidiaries. On October 20, 2025, Iloom established Iloom Holdings Co., Ltd. as a holding company through a comprehensive stock transfer and was incorporated as a wholly-owned subsidiary (100% stake) of the company. Immediately after transitioning from the existing individual shareholder system to a holding company system, Iloom carried out an interim dividend of 1.57 billion KRW to Iloom Holdings. In a situation where performance was halved, funds flowed into the holding company.

In addition, the insolvency risk of the subsidiary, Iloom Taiwan Inc., has become a reality. The Taiwan subsidiary has fallen into a state of capital impairment, leading to the suspension of the equity method, and bad debt provisions have been set for the entire 570 million KRW in short-term loans provided by Iloom. In this regard, the bad debt expenses recognized during the period alone reached 2.8 billion KRW, and the accumulated unrecognized equity method losses exceeded 4.9 billion KRW.

A corporate finance analyst pointed out, "While Iloom is strengthening the owner family's control by transitioning to a holding company structure, it is maintaining a high-dividend policy despite deteriorating performance," and "Thorough management of management risk factors such as the insolvency of the Taiwan subsidiary and massive internal transactions with related parties appears necessary."

Meanwhile, Iloom Holdings Co., Ltd. is an unlisted holding company established on October 20, 2025, through a comprehensive stock transfer method. On September 16, 2025, Iloom approved the comprehensive stock transfer plan at an extraordinary general meeting of shareholders and established Iloom Holdings as the ultimate parent company, with the transfer date set for October 20 of the same year. As a result, Iloom's shareholder composition changed from the existing individual shareholder system to Iloom Holdings Co., Ltd. (100% stake), and Iloom became a wholly-owned subsidiary of Iloom Holdings.

A comprehensive stock transfer is a structure where existing shareholders of a wholly-owned subsidiary (Iloom) transfer all their holdings to the ultimate parent company (Iloom Holdings) and receive new shares of Iloom Holdings in return. As treasury shares are excluded from the transfer, the shareholders of Iloom Holdings effectively consist of President Son Tae-hee (about 75.2% stake, excluding treasury shares) and Son Hee-ryeong (about 24.8%). The two siblings hold 100% of Iloom Holdings' shares, and there are no external shareholders.

A point to note is the fact that on June 30, 2025, just before the stock transfer, Iloom retired all of its 829,835 treasury shares following a board resolution. This retirement significantly reduced the total number of issued shares from 1,354,050 to 524,215. If the stock transfer had proceeded without retiring the treasury shares, the treasury shares could have also belonged to Iloom Holdings, potentially complicating the governance structure.

The audit report states the decrease in retained earnings due to this retirement as 11.09821329 billion KRW. After this retirement, President Son Tae-hee's actual stake (excluding treasury shares) surged from about 29.11% to 75.2%.

The establishment of Iloom Holdings is part of an overall restructuring of the Fursys Group's governance. The Fursys Group maintains a dualized governance structure, with founder and honorary chairman Son Dong-chang and his eldest son, President Son Tae-hee, at the helm of each.

Fursys Group carried out two large-scale governance restructurings in 2025. The first was the establishment of Fursys Holdings Co., Ltd. through the spin-off of Fursys Holdings in May 2025, and the second was the establishment of Iloom Holdings through the comprehensive stock transfer of Iloom in October 2025. Both were carried out by establishing unlisted holding companies, minimizing market backlash due to duplicate listing.

The market interprets this series of restructurings as advance preparation for succession centered on President Son Tae-hee. With the establishment of Iloom Holdings, President Son Tae-hee unified the governance structure of subsidiaries, which extends from Iloom to Sidiz to Baros, into a holding company system. In the long term, observations are being raised in the industry that the entire group's control could move toward President Son Tae-hee through a merger between the unlisted companies, Iloom Holdings and Fursys Holdings.

A corporate finance analyst pointed out, "Iloom Holdings is an unlisted corporation and does not have the disclosure obligations of a listed company. Iloom (a wholly-owned subsidiary) is also an unlisted company," and added, "As a result, Iloom Holdings' financial status, dividend receipt details, and the scale of internal transactions are not disclosed to the outside, which leads to low transparency."

Baros is an affiliate in which Iloom holds 55% and President Son Tae-hee holds 45%, and it is responsible for the logistics, construction, and post-management of the Fursys Group. Baros's 2024 revenue was approximately 107.9 billion KRW, a 26.6% increase from the previous year (85.2 billion KRW), of which transactions with related parties accounted for 85.8 billion KRW (79.7% of the total). The industry sees a scenario where Son can secure huge succession funds by growing Baros as the most likely.