Ballan Enters Court Receivership Over Liquidity Crisis, Eyes M&A for Revival

Domestic leading online luxury platform Balan has applied for corporate rehabilitation procedures at the Seoul Bankruptcy Court due to an extreme liquidity crisis. Since the 28th, all of Balan's payment services have been suspended, making product inquiries possible but actual purchases impossible. This crisis occurred due to a failure to secure funds following delays in planned investment attraction. The 7.5 billion won investment preemptively received from Silicon2 is insufficient to resolve the estimated 13 billion won in outstanding payments. Considering the various settlement cycles of the platform's merchants, the total damage is expected to reach tens of billions of won, and some sellers have sued CEO Choi Hyung-rok for fraud and embezzlement. Physical clashes occurred during protests at the headquarters, leading Balan to switch to a work-from-home system. The industry views this situation as similar to the cases of Tmon and WeMakePrice, which applied for corporate rehabilitation after a large-scale outstanding payment crisis last year. The Fair Trade Commission is also closely monitoring Balan's situation. However, Balan claims there is a difference in that general consumers have not suffered direct financial damage. Balan's crisis clearly demonstrates the global luxury market downturn and the structural limitations of luxury vertical commerce platforms. Last year, the global luxury market size decreased by 2% compared to the previous year, and in Korea, four luxury platforms ceased operations in the past year. The increased focus on luxury sales by major corporate e-commerce platforms like Shinsegae and Lotte also contributed to intensifying competition. In a statement, CEO Choi Hyung-rok emphasized that Balan is structurally different from other rehabilitation companies, with no consumer damage and the amount of unpaid commercial debt being less than the monthly transaction volume. He also claimed that cost reductions since March have laid the groundwork for profitability, and as the market share leader, Balan could quickly normalize if only its short-term liquidity issue is resolved. Balan plans to pursue an M&A in parallel with the rehabilitation process and intends to appoint a sale lead manager this week. CEO Choi expressed his determination to improve cash flow and promptly repay partner debts by attracting an external acquirer before official approval. He stated that Balan's most important creditors are its partners and requested their active cooperation. The industry and partner companies are focusing on Balan's rehabilitation plan and the success of the M&A.