Shinsegae International Expects Better Q4... Highest Sales and Operating Profit Since Inception Anticipated

Sales increased by 4.9% to 350.2 billion KRW through Q3 this year
Operating profit more than doubled to 14.1 billion KRW
Domestic women's wear demand surges, boosting performance expectations

[Asia Economy Reporter Lee Seung-jin] Shinsegae International is expected to achieve record-high sales and operating profit this year, recovering to pre-COVID-19 levels of 2019 thanks to solid performance in its overseas fashion and cosmetic sectors and increased demand for women's clothing.

Expecting Highest Sales and Operating Profit Since Establishment

On the 16th, Shinsegae International announced that it recorded sales of 350.2 billion KRW and operating profit of 14.1 billion KRW in the third quarter of this year. Sales increased by 4.9% compared to the same period last year, and operating profit more than doubled. With strong performance continuing into the fourth quarter, the company is expected to achieve the highest sales and operating profit since its founding.

Shinsegae International attributes its rapid recovery from the COVID-19 crisis to a solid business portfolio composed of both in-house and imported brands. Despite the impact of remote work and social distancing, luxury consumption has been revitalized, boosting sales of imported brands, while sales of in-house brands are also recovering quickly.

In the third quarter of this year, overseas fashion sales from brands such as Brunello Cucinelli, Herno, and Chrome Hearts increased by 15.4% compared to the same period last year. Imported cosmetics sales from brands like Diptyque, Byredo, and Santa Maria Novella rose by 37.5%. The Jaju segment saw a 10.5% increase in sales year-on-year through enhanced brand awareness and expansion of e-commerce channels. The online mall SI Village experienced balanced growth across overseas luxury goods, domestic women's wear, cosmetics, and Jaju, aiming to reach 200 billion KRW in sales this year.

Even Better in the Fourth Quarter

As the fourth quarter begins, domestic demand for women's clothing, which had contracted due to COVID-19, is surging, further accelerating sales growth. With the end of remote work and an increase in year-end gatherings such as holiday parties, purchases of clothing for outings are rising, and sales of higher-priced outerwear are being activated due to cold weather.

In the case of the in-house women's wear brand Studio Tomboy, ahead of the full transition to phased daily recovery (With COVID-19), a brand day was held on October 28 through the online mall SI Village, achieving daily sales of 1 billion KRW. This is a record high for a single fashion brand. Considering that the average monthly sales of a single women's wear store in a department store is around 100 to 200 million KRW, this is an impressive achievement. Additionally, the flagship women's wear brand BOBV continued strong performance in the fourth quarter, growing 32% year-on-year during the ten days from October 22 to 31.

Shinsegae International is not complacent with this recovery but is focusing its efforts on maximizing profitability through bold business restructuring and promoting new businesses.

First, the company plans to quickly streamline inefficient brands and stores to create a profit-centered business structure. The children's wear brand Petit Bateau and the jewelry brand John Hardy licensing business will end by the end of this year to improve the efficiency of the fashion business. The lifestyle brand Jaju will secure stable sales and profits through a reorganization of distribution channels.

The company is also actively pursuing new businesses. In the organizational restructuring in October, Shinsegae International established a new business team to discover future new growth businesses and plans to actively engage in mergers and acquisitions (M&A). A Shinsegae International official said, "Preference for luxury goods continues to increase, and with the start of With COVID-19, demand for in-house brands is rapidly recovering, so we expect better performance next year than this year."

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