For decades, he has quietly made the pricey handbags that famous labels sell around the world. Today he's a billionaire
“I never imagined getting this far,” says Kenny Park
Image: Peter and Maria Hoey for Forbes
After toiling for a month in a hot and crowded Seoul factory, it seemed like a slam dunk. But Kenny Park was crushed as his pitch to two fashion executives was going nowhere. He had just started a company to make handbags and had flown to New York for the meeting. “They wouldn’t look me in the eye,” he says. “They said, ‘Kenny, I’m sorry, but we spoke with sales and marketing. Their opinion is that customers who buy Donna Karan aren’t interested in 30 percent off—if it’s made in Korea’.”
The executives had been intrigued by the idea of producing Donna Karan handbags at a much lower cost. “They were so impressed by his samples,” says Park. But it was 1988, luxury handbags were produced mostly in Europe, and for many consumers, the Made in Korea label meant lower quality. Undeterred, he called back two days later. “I told them I don’t have an MBA. I don’t have any expertise in business, but I know the three essences of merchandising: Well-designed, well-made, well-priced. It doesn’t have to be me, but you need to prepare. You need a base in Asia.”
He proposed a deal. “A couple hundred pieces, just a test. If it doesn’t work you’re not going to be burnt and my company won’t go bankrupt. Fortunately it worked...it really worked.” The first order for 240 Donna Karan handbags sold out. A second order of 600 sold out; 3,000 bags, gone. Within nine months Donna Karan had deployed a designer to Seoul to help create a new handbag for Park to make. In its first full year, his contract manufacturer, Simone Accessory, reaped $4 million in revenue and was already in the black, thanks also to another American customer, Esprit, which had signed on a few months earlier.
Some 30 years later, Park is still making handbags and other accessories for Donna Karan. But today he also has nearly 20 other customers, and the list reads like a fashion hall of fame: Michael Kors, Kate Spade, Coach, Marc Jacobs, Alexander Wang, Versus Versace, AllSaints. Chances are you’ve purchased or owned something he’s made, because every year Simone churns out 30 million handbags and small leather goods. That keeps 30,000 workers busy in seven factories in Vietnam, Cambodia, Indonesia and China. Starting with the first handbag design for Esprit, the company now boasts an archive of 180,000 designs.
Simone—named after his wife’s nickname—is headquartered 14 miles south of Seoul, where 400 staff work in a suburban-style office campus. The privately held company generated $120 million in net income and $940 million in revenue last year. That profit number is 16.2 percent higher than four years ago, while revenue is up by 45.5 percent. In 2015 the Blackstone Group, the world’s largest private equity firm, purchased a 30 percent stake for $300 million. The company’s value has risen since then, and Park, 63, who now owns 62 percent with his immediate family, breaks into the ranks of billionaires this year while also debuting on the list of South Korea’s 50 richest people. Forbes Asia
estimates his net worth at $1.16 billion.
But for Park this capstone to his career probably doesn’t compare to a title he earned not long after he started. In 1988—just ten years after China began opening up—no Asia-based factory was yet producing handbags for luxury brands.
“That was the first single step for Asia in manufacturing designer handbags,” he says of the Donna Karan deal. “That’s why Chinese manufacturers called me Da ge, big brother. Even when I was just 30 years old, 50-, 60-year-old men were calling me Da ge. Simone will always be known as a pioneer.”
Park sits down at a large wooden desk amid an office dotted with towers of books, an array of sample handbags and scores of contemporary artworks. “That’s my root,” he says when asked about one of the several fish decorations that adorn the crowded walls. It’s a nod to his late father’s fishing company, which once had nine boats and a facility for repairing and building ships.
Park figured he’d join the family business after graduating from Seoul’s Yonsei University with degrees in German and literature in 1978. His two older brothers—he’s the fifth oldest of six siblings—already were working with his father, and he recalls accompanying him on the boats for as long as six weeks. But a love for the sea led to a desire to travel, and Park decided to chart his own path: “I said, Dad, give me three years. Without the safety of your greenhouse I would like to go out and learn on my own. I wanted to see outside Korea.”
But he faced a barrier: South Korea was under military rule, and it was difficult for citizens to get passports unless they were travelling on business. So Park decided that a job at an export company might pave his way overseas. He landed at a modest handbag manufacturer called Chungsan, where he was the first employee with a college degree. “I could’ve gone to a chaebol company, but I purposely picked a small company,” he says.
In 1980 his choice paid off. He was sent to Florence, Italy, to line up a leather supplier and was amazed by the fashion sense of the locals. “I visited a men’s clothing shop, and I was shocked. The gentlemen on the streets were wearing yellow pants, green pants, fuchsia pants, red pants. There were 15 differently coloured shirts. I could not imagine men wearing those colors. That excited me very much. It really motivated me.”
That sparked his creativity. “My canvas was small, but I could draw the drawing I liked, I could paint the painting I wanted. I could see a lady in New York wearing the handbag that I made. It was a little thing, but it was a good feeling. It felt like an achievement.”
Park stayed with Chungsan for seven years, eventually becoming its head of development and sales, increasing revenue by more than tenfold during his tenure, he says. But in 1987 he ventured out on his own and borrowed $30,000 from his father, defying the counsel of friends and family. They warned that South Korea was beginning to lose its manufacturing prowess as production shifted to less expensive countries. “They said, ‘Kenny, that’s done. Why do you want to catch the last train? China is coming’.”
But he had a safety net: One big customer was virtually guaranteed. San Francisco-based Esprit, now listed in Hong Kong, had approached Chungsan seeking a supplier, but a conflict of interest with an existing customer thwarted the deal. Esprit offered the contract to Park, motivating him to launch his own company. The timing was on his side. The workforce at factories in Italy and much of Europe was ageing as fewer young people were interested in becoming craftsmen. The business was there, but the ability to handle it increasingly wasn’t.
So Park focussed on signing up customer number two. “I asked my American friends, ‘Who’s the hottest right now?’ They said Donna. Donna Karan. It’s American. It shows New York.” He purchased her bags and worked to produce the perfect sample before landing his meeting in the summer of 1988. Four years later he established his first offshore factory, in Guangzhou, and a second one five years later in Jakarta. His first European customer signed on in 1999.
The company has flourished as millennials’ appetite for designer goods continues to expand. In 2017 the market for luxury leather goods among the top five companies totalled $49.2 billion, up by nearly 30 percent in five years, according to data compiled by Euromonitor International. Simone supplies two of those five players: Michael Kors and Coach. Now the market has come full circle: Where once China was purely a manufacturing base, today it’s the world’s largest market for luxury goods, with mainland sales totalling $23 billion last year, according to a Bain & Co report.
After 38 years of making bags for some of the world’s most popular brands, Park is thinking of slowing down. “I’ve been running like a truck without brakes. Now I am trying to have more balance and reassess the priorities in my life. I am trying to have more time for myself and my family.”
The seeds have already been sown. The older of his two daughters, Joowon, 31, heads a subsidiary, Simone Fashion Co, that opened in 2015 and runs four luxury-accessory stores—two for German designer Karl Lagerfeld and two called 0914 that sell mostly Simone’s own brand, 0914. The 0914 flagship is across from Dosan Park in the Gangnam district of Seoul; on the next street are Hermès and Cartier shops. The brand is named after the day in 1984 when Park and his college sweetheart ran into each other in a cafe. They had broken up six years earlier and hadn’t seen each other since, but the café was a place they used to frequent. “Next May we got married,” he says.
Joowon, who did a stint at Morgan Stanley with its consumer retail group in Manhattan, speaks with Forbes Asia
over the phone from Paris. “My father really respects my autonomy,” she says. The brand is aimed at consumers who are typically 30 to 50 years old, and it has a simple and understated feel, with the handbags averaging around $700.
Simone Fashion also is building a business serving as the local retailer for niche labels from Europe and Japan. “Our customers are really well-versed in designer labels and are the experimental type,” she says. “We are working with brands that are unique and are planning [new] store concepts.”
The Simone umbrella also includes Simone Investment Co, which says it manages nearly $1 billion in assets for Park and other investors—mostly prized real estate such as the De Rotterdam, a development of offices, apartments and a hotel in The Netherlands; the Washington Harbour complex, which sits on the Potomac River in the Georgetown section of Washington, DC; and the Westin Hotel in Union Square, San Francisco.
For now Park has no plans to take his company public, but he hints at a vague possibility. “I never imagined getting this far. When we celebrated our 30th anniversary last year. I asked my business partners, What was the best part of working with Simone? Almost everyone said predictability and consistency.”