"Prime Metropolitan Location Worked" Shinsegae, Last Year's Operating Profit 517.3 Billion Won... 'Record High' (Comprehensive)

Record High Q4 Performance... Sales 1.934 Trillion KRW & Operating Profit 195.1 Billion KRW
'Offline Innovation' Department Stores & 'Luxury Business Diversification' SI Drive Strong Results
Subsidiaries Like DF & Central City Show Improved Performance

Shinsegae Department Store Gangnam Branch.

[Asia Economy Reporter Yuri Kim] Shinsegae achieved its highest-ever operating profit last year. The expansion of department stores, including the new opening of the Daejeon Art & Science store and the renewal of the Gangnam store, drove the performance, while consolidated subsidiaries such as Shinsegae International also contributed by posting record results.

Shinsegae announced on the 9th that its consolidated sales for the fourth quarter of last year reached 1.934 trillion KRW, with an operating profit of 195.1 billion KRW. Sales increased by 43.9% compared to the same period last year, and operating profit doubled. Including this, the operating profit for the entire year was 517.3 billion KRW, marking the highest performance ever, surpassing 468.2 billion KRW in 2019. Sales amounted to 6.3164 trillion KRW.

Shinsegae Department Store's sales in the fourth quarter of last year were 637.7 billion KRW, a 25.6% increase compared to the same period last year. Operating profit rose 59.1% to 140.2 billion KRW. Both sales and operating profit achieved record highs for the fourth quarter (including separate corporations in Daegu, Gwangju, and Daejeon, excluding Simon-operated outlets). Not only overseas fashion (32.5%) and luxury goods (41.9%), but also popular genres such as women's fashion (28.7%) and men's fashion (28.1%) significantly contributed to the growth in scale. Online sales in the fourth quarter also grew 12.5% year-on-year.

Shinsegae emphasized that last year it laid the foundation for growth in the new normal era by improving performance through offline space innovation and strengthening digital marketing. It introduced industry-first innovations such as the multi-level floor at Shinsegae Gangnam store, the largest luxury cosmetics specialty hall in Korea (Shinsegae Gangnam store), the opening of the Chungcheong region landmark Daejeon Shinsegae Art & Science, the industry's first paid membership for food halls (Gyeonggi store), and the industry's first luxury and cosmetics specialty halls spanning two floors (Gyeonggi store), thereby enhancing offline competitiveness. It also launched various digital services including Shinbaek Live, the renewal of the SSG.com department store section, live commerce partnerships with Naver, and the Chicor smart mirror (beauty tech). Additionally, it introduced art-tech marketing linking department stores with artworks to secure future growth engines.

Shinsegae plans to introduce a dedicated overseas brand hall within the SSG.com department store section and hold a grand opening of the luxury hall at the Gyeonggi store in the first half of this year. Through these efforts, it aims to continue strong performance this year.

Consolidated subsidiaries such as Shinsegae International, Shinsegae DF, and Central City also performed well. Shinsegae International recorded sales of 417.9 billion KRW and an operating profit of 30.1 billion KRW, with balanced growth across fashion, beauty, and lifestyle sectors. These figures represent increases of 9.7% and 73.0%, respectively, compared to the same period last year. Both sales and operating profit were the highest ever for a fourth quarter, with increased demand in the fashion sector leading to strong results not only in overseas fashion but also in in-house brands such as Studio Tomboy and BOBB. Overseas fashion (21.2%) and domestic fashion (17.4%) showed strong growth alongside recovering consumer sentiment. The Jaju segment recorded sales growth (15.5%) for consecutive quarters through increased brand awareness and expansion of e-commerce channels.

The online platform SI Village achieved a transaction volume of 233 billion KRW last year, driven by balanced growth in overseas luxury goods, domestic women's wear, cosmetics, and Jaju. This represents the industry's highest growth rate five years after its launch in 2016, when it recorded 2.7 billion KRW.

Shinsegae DF posted sales of 823.3 billion KRW and an operating profit of 12.3 billion KRW in the fourth quarter of last year, marking increases of 80.6% and 373.1%, respectively, compared to the same period last year, continuing its consecutive profitability. This was due to the conversion of rental fees at Incheon Airport duty-free shops to an operating rate basis and reduced accounting expenses from lease accounting effects pre-recognized in 2019 and 2020. The company expects faster recovery in performance as the domestic duty-free purchase limit is abolished starting March this year and COVID-19 management measures are adjusted, leading to more customers visiting duty-free shops.

Central City also recorded sales of 77.4 billion KRW and an operating profit of 22.4 billion KRW in the fourth quarter, supported by strong performance of the new hotel Onoma and increased rental income from department store sales growth.

Shinsegae Casa achieved sales of 72.1 billion KRW, growing 61.8% year-on-year due to stable sales from new stores and online (Good.com) channels and expanding customer demand for premium products. Operating loss was 4.1 billion KRW.

A Shinsegae official said, "Despite difficult market conditions, we recorded the highest-ever operating profit thanks to continuous offline investments, the successful stabilization of new stores, solid department store performance, and sound management of subsidiaries," adding, "In addition to strengthening core business competitiveness, we will prepare for the new normal era centered on online and digital."

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