KB News Desk
Shinsegae said Tuesday it posted its strongest-ever first-half earnings this year as investments in its department stores and efforts to streamline its affiliates improved profitability across major businesses.
The retail giant reported sales of 6.36 trillion won ($4.5 billion) for the January-to-June period, up 10.1 percent from a year earlier. Operating profit jumped 75.7 percent to 365 billion won with both figures reaching record highs.
In the second quarter alone, Shinsegae logged 3.14 trillion won in sales, up 8.5 percent from the April-to-June period last year, while operating profit more than doubled to 167.1 billion won, exceeding market expectations.
Shinsegae’s department stores drove the improved performance. Combined sales from its department stores rose 15.5 percent to 2.02 trillion won in the second quarter as operating profit climbed 53.5 percent to 108.8 billion won. According to Shinsegae, Luxury goods sales increased 35 percent year-on-year while fashion, living and food sales rose 10.1 percent, 16.6 percent and 13.7 percent, respectively.
Underlining the initiative to invest in trend-leading content, Shinsegae said new customers accounted for 27.7 percent of department store sales during the first half. In particular, those aged 30 or younger made up 45 percent of the new-customer base.
The retail firm also noted that foreign customers have emerged as another key source of growth. Sales to overseas visitors more than doubled from a year earlier to 580 billion won in the first half, up 120 percent.
Shinsegae Duty Free rebounded to profitability after years of pressure from intense price competition. Although second-quarter sales fell 10.3 percent to 542.6 billion won, operating profit rose to 33.3 billion won from a 1.5 billion won loss a year earlier.
The duty-free operator has shifted away from price-based competition toward an experience-focused model, expanding luxury brands and premium beauty offerings while teaming up with global partners to provide better services to foreign customers.
As a result, the Shinsegae Duty Free store in Myeong-dong in central Seoul saw a sharp increase in visitors from overseas markets in the second quarter with arrivals from Thailand surging 273 percent, followed by Australia at 184 percent, Canada at 93 percent and the United States at 22 percent.
“Strategic investments to attract future customers and active efforts to improve our management structure bore fruit in the form of profitable operations across all businesses in the first half,” a Shinsegae official said.
“We will continue our efforts to improve management efficiency and specialization in the second half to create a momentum that will set us apart from competitors.”
