E-Land From the First Clothes Shop to the Carrefour Deal

I came back to this book after reading a report about employees being made to participate in a large performance at an E-Land year-end event. It made me want to look again at how a business book had described the company’s culture.

Applicants sometimes called it Il-land, playing on the Korean word for work. I remembered the nickname from a time when people were already arguing about what the company asked of employees and what it offered in return.

The book I found while looking for work

I first found Cha Gi-hyeon’s book in 2012, when I was looking for a job. I borrowed books about companies because I wanted to understand something of how they had become places where I might work.

The book came out in 2010. It covers the company’s beginnings and the expansion that had already happened by then.

How E-Land began

Cha follows several threads: the growth of the stores, the values the company put into words and the methods it used when it needed to raise money or change direction.

Park Sung-soo opened a small clothing store called England near Ewha Womans University in 1980. The company that grew out of it eventually had many more ways to reach a shopper than that first rack of clothes.

Looking at an offer from the other side of the counter

The book uses “E-Land Spirit” for a practice of trying to see a decision from somebody else’s position, often the customer’s.

Cha then connects it to a willingness to make a different offer from the one a competitor might make. The examples start at a scale a reader can see.

At England, that meant noticing students who lived in nearby dormitories and stocking what they were likely to need.

At Eco Mart, the book’s example is a low-price shop that offered customers a small indulgence alongside useful things for everyday life.

The man cleaning before the interview

One anecdote comes from a person who applied for a job at the company.

He asked a man cleaning the building for directions to the interview. When he entered the room, the same man was sitting on the panel. In the book’s account, the man was Park Sung-soo.

When people had to share a desk

The company connected order and cleanliness to a practical problem. At one point it had fewer desks than people. Sharing a desk meant leaving it ready for whoever needed it next.

The arrangement is often called hot desking in English.

• See also — Hot desk in OWL Dictionary

Four stated management principles

Cha also lists four principles the company said guided the way it ran.

1. Earn a profit and put it to good use.
2. Deal honestly in earning that profit.
3. Make the workplace somewhere people can learn.
4. Run the business to serve the customer.

I read those lines alongside later reports about the treatment of staff. They are commitments by which a company can be judged, including by the people who work there.

• Daily Sisa — Report on employee participation in an E-Land year-end performance

How staff shared what they knew

The book describes a second notebook employees were meant to keep. The Korean name, bonggaejeok, condenses the idea of noticing something, thinking about what it means and applying it at work.

Employees could also post a question on a board when it involved work outside their own team. Someone who knew that area could respond.

By October 1999, the book says, the company had put an internal knowledge database in place.

Staff could contribute material about a process they understood or spend internal credits called LUTI to consult someone else’s. The credits gave the company a way to recognize a useful contribution.

Reading and information at work

The company had already made reading part of its management practice in the 1990s. Cha sees that as one of several ways it expected people to keep learning at work.

The book also dates the introduction of its enterprise resource planning system to February 2000. It gives another example of trying to make information useful across departments.

Building different brands

The group developed brands including 2001 Outlet, Ashley and WHO.A.U. Their names make it easier to see how far the business had moved beyond its first clothing shop.

The brands also gave the group a way to try different offers. An outlet, a restaurant and a clothing label can reach people for different reasons even when they share an owner.

Looking beyond South Korea

E-Land established a company in Shanghai in 1994. Cha describes a move toward premium positioning in China around 2000.

The children’s clothing business also sold in the United States. The book highlights an Earnie Award for boys’ clothing as a sign of the attention the products received there.

The Carrefour deal and mezzanine finance

The book uses E-Land’s 2006 acquisition of Carrefour’s South Korean business to introduce mezzanine financing.

Mezzanine financing typically sits between senior debt and equity. It can take the form of subordinated debt or preferred equity, and some arrangements include a right to acquire shares.

The terms determine where the investor stands if the business runs into trouble and how they participate if it does well. That position between two familiar forms of capital gives the arrangement its name.

A mezzanine in a building is an intermediate level. The financial term borrows that idea.

Selling a building and continuing to use it

Another example is a sale and leaseback. The owner sells an asset and leases it from the buyer so it can keep using it.

A retailer might sell the building that houses a store. The deal releases cash from the building and leaves the retailer with a rent obligation.

Cha uses examples from E-Land and other companies, including ships and aircraft, to show how the same arrangement can apply to very different assets.

It works most visibly when the asset is expensive to own and still necessary to the operation.

From the buyer’s perspective, the same deal involves acquiring an asset with a tenant already lined up.

Starting high or starting low

Two shorter examples concern pricing. What matters in both cases is the point at which a business chooses to ask for more or make it easier for people to try the product.

• Price skimming — launch at a relatively high price, often lowering it as the market broadens.
• Penetration pricing — use a low initial price to attract customers and build market share.

I had expected a book mainly about E-Land’s history. Its examples also show how a decision about capital or price can shape what the customer eventually sees in a store.

That made it a more interesting read than a catalogue of the group’s brands. I could follow the choices behind a few names I already knew.

Further reading

• OWL Dictionary — Hot desk
• Daily Sisa — Report on employee participation in an E-Land year-end performance

Book details

E-Land: New Frontier Marketing Strategy

Author

Cha Gi-hyeon

Published

August 9, 2010

ISBN-13

9788991486478

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