Shinsegae hits record Q1 figures in shopping sectors

A giant digital screen on Shinsegae Department Store's main location in central Seoul shines over passing traffic, Feb. 5. Korea Times photo by Shim Hyun-chul

Shinsegae Group posted record first-quarter sales and operating profit, driven by a surge in spending from foreign visitors across its businesses.

According to the retailer on Tuesday, the group reported sales of 3.21 trillion won ($2.16 billion) and operating profit of 198 billion won, up 11.7 percent and 49.5 percent from a year earlier, respectively.

Spending by international customers across the group’s operations — spanning department stores, duty-free shops, fashion, beauty and lifestyle brands — more than doubled from a year earlier to exceed 1 trillion won.

Shinsegae Chairperson Chung Yoo-kyung

At the main branch of Shinsegae Department Store in central Seoul, sales to foreign shoppers jumped 140 percent on-year. The company attributed the increase to the global boom in K-culture, which has been drawing more tourists to its luxury retail destinations.

Department stores remain the core growth engine for Shinsegae Group. Operating 13 locations nationwide, Shinsegae Department Store recorded sales of 2.03 trillion won and operating profit of 141 billion won, up 13 percent and 30.7 percent on-year, respectively.

The company’s Gangnam branch, which recently completed a two-year renovation, has reestablished itself as a key location with an expanded lineup of luxury fashion labels and premium dining brands.

The company’s main store has also completed renovations on The Heritage, strengthening its “luxury mansion” concept alongside The Reserve and The Estate.

Focusing on qualitative upgrades rather than expanding the number of outlets, Shinsegae Department Store said its branches in Busan, Daegu, Daejeon and Gwangju maintained their positions as the dominant high-end retailers in each city.

Shinsegae International, with its beauty and fashion businesses, saw its sales profit jump 15.7 percent and its operating profit jump 452.6 percent from the previous quarter. Shinsegae Duty Free saw its operating profit increase by 12.9 billion won from the previous quarter, when it operated in a deficit.

The largest increase of operating profit from last quarter came from Shinsegae Casa which posted 1.3 billion won, a 1,200 percent hike. The main driver was its lifestyle and home furnishing brand Jaju, which the company acquired from Shinsegae International last year. Jaju saw its first quarter sales double from the previous year.

Shinsegae held a board of directors meeting on Tuesday and decided to pay out dividends to its shareholders. The company will pay 1,300 won per share for a total of 11.4 billion won, which will be distributed on May 29.

“Despite challenging external conditions, we have achieved significant growth not only in scale but also in profitability through proactive management restructuring and strategic investments,” a Shinsegae official said.

“We’ll continue to enhance shareholder value through active shareholder return policies while pursuing ongoing investments and structural improvements to boost corporate value.”