Delay in Payment to Some Store Partners
“Excessive Payment Discovered During Financial Review”
Over 1,300 Store Partners are Anxious
A payment delay crisis has emerged at luxury distribution platform Ballan, which once attempted to dominate the luxury distribution market by aggressively promoting big-name models like Kim Hye-soo. According to the luxury industry on the 25th, on the 24th, Ballan notified their partnered stores about a matter that required verification in past transactions and settlements during their financial audit process, leading to the announced delay in settlements. Ballan stated, “Errors such as excessive payments were discovered during our internal financial review, and we are recalculating the settlement amounts,” and they plan to share the finalized settlement amounts and payment schedules for each partner by the 28th.
Ballan settles sales revenue with its partners every week, 15 days, or monthly, depending on the cycle. However, they failed to pay on time to those whose settlement cycles fell on that day. Ballan’s average monthly transaction volume is around 30 billion KRW, with over 1,300 partner stores.
After witnessing last year’s large-scale payment delay incident with Tmon and Wemakeprice, Ballan’s partners are highly alarmed by the settlement delay. Just a day after the delay notice was sent on the 25th, 20 to 30 sellers visited Ballan’s office to protest, leading to police intervention. Ballan switched all employees to remote work from the previous day, citing concerns for their safety.
According to disclosed information, Ballan, founded in 2015, is in a state of complete capital erosion with total equity of -7.73 billion KRW as of the end of 2023 due to accumulated annual losses. Ballan recorded an operating loss of 9.9 billion KRW in 2023, with sales plummeting by 56% to 39.2 billion KRW.
Ballan’s current assets total 5.62 billion KRW, while current liabilities amount to 13.81 billion KRW, resulting in a current ratio of only 40.7%. This means the liabilities due within a year are double the assets that can be converted into cash within that period, indicating severe liquidity risk.