Shinsegae Q4 Operating Profit 103.1 Billion KRW ... 4 Times Increase from Previous Quarter (Comprehensive)

[Asia Economy Reporter Jo In-kyung] Shinsegae continued profitable management in the fourth quarter despite the challenging business environment caused by COVID-19. Strong performance centered on large department stores and improved results from consolidated subsidiaries such as duty-free shops formed the basis.

Shinsegae announced on the 17th that its consolidated sales for the fourth quarter of last year were 1.3403 trillion KRW, down 24.2% from the same period the previous year, and operating profit was 103.1 billion KRW, down 46.9%, based on preliminary figures. Compared to the previous quarter, the third quarter of 2020, sales increased by 10.4%, and operating profit surged fourfold.

First, Shinsegae Department Store’s fourth-quarter sales were 411.1 billion KRW, down 4.4% from the same period in 2019, but showed a rapid recovery with a 13.0% increase compared to the previous quarter. Operating profit was 61.7 billion KRW, down 27.7% year-on-year but more than doubled from the previous quarter.

It was analyzed that sales increased at large stores based on metropolitan commercial areas such as Gangnam Branch, Centum City Branch, and Gwangju Shinsegae, driving the recovery in performance. The department store explained that sales from customers in their 20s and 30s, who have emerged as the main consumer group, increased by 8.7% compared to the fourth quarter of 2019.

Shinsegae DF recorded sales of 455.8 billion KRW and an operating profit of 2.6 billion KRW in the fourth quarter, achieving a return to profitability. The change to a revenue-based rent system at Incheon Airport duty-free shops since September last year was a key factor.

Shinsegae International posted sales of 383.5 billion KRW, up 14.9% from the previous quarter, and operating profit more than doubled to 17.4 billion KRW, driven by growth in cosmetics and overseas fashion businesses. The recovery of consumer sentiment in China and increased domestic demand for imported cosmetics led to a 17% increase in cosmetics sales quarter-on-quarter, with imported cosmetics showing a 36.7% growth compared to the same period last year.

Central City also achieved sales of 62.3 billion KRW and operating profit of 17.5 billion KRW through gradual increases in hotel occupancy rates and recovery in leased store performance. Both sales (7.2%) and operating profit (25.0%) rose compared to the previous quarter, continuing profitable management.

Casamia, which is continuously expanding its distribution network, recorded sales of 44.7 billion KRW, a 28.1% increase year-on-year, driven by the effect of new stores and growing consumer interest in residential environments. Operating loss was 3.0 billion KRW, significantly reducing the deficit compared to the fourth quarter of the previous year.

A Shinsegae official said, "Despite the difficult external environment, we continued profitability for two consecutive quarters following the third quarter, thanks to the rapid sales recovery of department stores and the return to profitability of Shinsegae DF and other subsidiaries’ improved performance." He added, "With new department store openings, continuous recovery in the duty-free business, and solid SI sales centered on overseas fashion and cosmetics, performance is expected to improve further this year."

This content was produced with the assistance of AI translation services.