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[Alpha Biz=(Chicago) Reporter Kim Jisun] Shinsegae also posted poor performance in the second quarter due to a drop in sales by its subsidiaries despite improved performance by its department store division.
Shinsegae announced on the 9th that its consolidated operating profit in the second quarter of this year was KRW 149.6 billion, down 20.2% from a year earlier. Sales fell 16 percent to 1.5759 trillion won, while net profit fell 4.3 percent to 78.7 billion won.
As of the first half of this year, sales were KRW 3.1393 trillion and operating profit was KRW 302 billion, down 13.8% and 14% from the same period last year. Shinsegae continued its sluggish performance in the second quarter due to weak consumer sentiment stemming from a rate hike and increased fixed costs caused by inflation.
The department store posted 628.4 billion won in sales in the second quarter, up 0.8 percent from a year earlier, continuing its surplus for the 10th straight quarter. The company explained that this is thanks to enhanced competitiveness such as the renewal of male specialists aimed at male customers in their 20s and 30s, the opening of the first and exclusive pop-up store for global luxury brands, and the opening of the Shinbaekseon Museum at Shinsegae Department Store Mall at SSG.com.
Shinsegae Department Store will also showcase Young Fashion Specialists at Gangnam and Centum City branches in the second half of this year and renew its life-specialized view of Gyeonggi branch. Also, it plans to show differentiated contents such as strengthening the function of Shinbaekseon Museum, which is a gift corner online, and developing the next-generation application of Shinsegae Department Store.
Among the consolidated companies, the performance of duty-free shops and hotel subsidiaries has improved. Shinsegae DF, a duty-free shop business, saw its sales fall 40.3% to 485.1 billion won, but its operating profit jumped 40.1% to 40.2 billion won.
Shinsegae Central City, a hotel affiliate, also achieved positive results in both sales (89.1 billion won, 11.4↑) and operating profit (8.7 billion won, 33.8↑) due to increased occupancy rates and improved performance of rental stores due to the recovery of travel demand.
However, Shinsegae International (031430) recorded sales of 333.8 billion won and operating profit of 18.4 billion won, down 13.1% and 52.5% year-on-year. This is due to the termination of contracts with key overseas fashion brands such as Celine and the continued closure of the Days brand sourcing business.
Shinsegae Casa also saw its second-quarter sales fall 18.8 percent on-year to 55.1 billion won in the wake of the sluggish real estate market and turned into a deficit with 5.3 billion won in operating losses.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
