Despite challenging market conditions, Shinsegae Group has successfully rebounded in the first quarter. While the Group’s sales remained at a similar level to last year, an increase in operating profit is believed to be due to the operation efficiency method that has been in place since early last year.
On the 8th, Shinsegae announced a 7% increase in first quarter consolidated operating profit to $1.4 billion compared to the same period last year. Total sales for the same period increased by 5.4% to $2.4 billion.
The department store business of Shinsegae Group reported a 7.9% increase in total first-quarter sales to $1.5 billion) compared to the same period last year. This marks the highest first-quarter sales in history, surpassing the record sales of $1.4 billion in the first quarter of last year.
The department store business also saw a 3.1% increase in first-quarter operating profit to $96.9 million. Despite the recent downturn in consumer sentiment due to sustained high prices and interest rates, Shinsegae Group has proven its performance through sales.
A representative in charge of the department store business stated, “This is the result of consistently showcasing differentiated content and strengthening our core competitiveness.”
Shinsegae Group plans to continue its growth by focusing on online and offline synergy through mobile app activation while continuing space innovation through the Shinsegae Department Store Gangnam branch food court and the reopening of Times Square fashion hall in the first half of this year.
Shinsegae Casa, a consolidated subsidiary of Shinsegae Department Store, reported sales of $58.4 million, a 30% increase compared to the same period last year.
Operating profit also increased by $8.4 million compared to last year, achieving a successful turnaround of $853,000. This is believed to be due to the influence of popular products such as the sleep-focused brand MATERASSO and the best-selling sofa CAMPO.
Shinsegae Live Shopping also saw a 16.7% increase in sales to $66.7 million compared to the same period last year, and an operating profit of $4.8 million due to the good performance of fashion PBs such as Blue Fit, Edited, and Elaconic.
Shinsegae DF, the duty-free business division of Shinsegae Group, reported sales of $415.4 million, a 4.8% decrease compared to last year. However, Shinsegae Group expects improvements as the number of customers at Incheon Airport increases and opens the stores sequentially.
Shinsegae Central City saw a 5.5% increase in sales to $75.9 million compared to the same period last year, and an operating profit of $22.4 million due to the acquisition of the Youngrangho Resort business and an increase in rental income. Shinsegae International, which is in charge of the fashion and cosmetics business of Shinsegae Group, recorded sales of $264 million, a 0.9% decrease compared to the same period last year, and an operating profit of $9.6 million.
However, the cosmetics division of Shinsegae International achieved the highest quarterly sales with $89 million in sales and an operating profit of $5.6 million in the first quarter.
This is believed to be the result of good performance from its independent brands such as the high-function skincare brand Yunjac, beauty brand Poiret, and high-end skincare brand Swiss Perfection.
A representative of Shinsegae Group said, “Despite the unfavorable business conditions and fierce e-commerce competition, we have proven our competitiveness based on the highest first-quarter sales in department store history and steady growth of affiliated companies,” and added, “We will continue to grow solidly based on the content innovation of the department store and the strong performance of affiliated companies.”
Meanwhile, it has been reported that Chung Yong Jin, the chairman of Shinsegae Group, has stopped his social media activities and is struggling on the front lines of management to avoid the group’s poor performance.
This comes as a warning light has been turned on for the financial soundness of Shinsegae Group, with its core affiliate E-Mart being overtaken by Coupang and posting its first annual loss last year.
In response to this poor performance, Chairman Chung Yong Jin has been focusing on restructuring measures to strengthen the core competitiveness of distribution, including E-Mart, and to reorganize low-profit, inefficient businesses. This successful performance proves that Chairman Chung Yong Jin’s hard work was not in vain.
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