E-mart closing money-losing stores

Shinsegae Group Vice Chairman Chung Yong-jin

By Park Jae-hyuk

E-mart has decided to shut several more stagnant stores this year to improve the company's efficiency, the discount chain of Shinsegae Group said Monday.

The retail giant said it has recently sold its Deoki-dong branch in Ilsan, Gyeonggi Province.

The outlet had initially opened as a Walmart store in 1996, but became an E-mart store in 2006, after Shinsegae's acquisition of the U.S.-based discount chain's Korean affiliate.

“We realized we needed to reform our existing stores for continuous growth,” an E-mart official said, “so we began closing down our stores that showed sluggish sales.”

The company sold its store in Hakseong in Ulsan, the store in Bupyeong in Incheon and the store in Siji in Daegu last year. It also sold land in Hanam and Pyeongtaek, Gyeonggi Province.

Following the closure of an SSG Food Market's Mokdong store in Seoul in January, E-mart plans to shut down the Bupyeong and Siji branches in the first half of this year at the earliest.

The restructuring is regarded as a move to offset the retailer's sluggish growth rate over the past few years.

E-mart posted 566.9 billion won ($524.3 million) in operating profits last year, down 0.3 percent from the previous year.

Disposing of its stores showing losses, the company is considering opening a couple of new stores this year.

It has implemented similar strategies in other countries as well.

Last year, E-mart left the Chinese market, due to its lingering losses in the world's most populous country.

After opening the first E-mart store in China in 1997, E-mart had at one time operated 30 stores there.

However, the Chinese affiliate posted 21.6 billion won in losses in 2016, and its accumulated deficit between 2013 and 2016 reached 150 billion won.

After the withdrawal, the company seeks to expand its presence in the United States, Europe and other Asian countries.

According to industry officials, Shinsegae Vice Chairman Chung Yong-jin visited Los Angeles and San Francisco to survey California's real estate market during his recent trip to the U.S.

E-mart, which already set up its U.S. affiliate it named E-Mart America in 2005, is reportedly pushing ahead with opening an outlet combining a grocery store with a restaurant this year.

In addition, the discount chain will begin building its second store in Ho Chi Minh City in May.

The company will use its Vietnamese affiliate as a base for its expansion in other Southeast Asian countries, such as Cambodia, Laos and Myanmar.