"Shinsegae Achieves Record High Performance in Q2 and H1, Balanced Growth Online and Offline Shines (Comprehensive)"

Balanced On-Offline Growth... Q2 Consolidated Operating Profit 187.4 Billion KRW, Sales 1.8771 Trillion KRW
Digital Strategy Success in NFT and App Content... Continued Sales Growth from MZ Customers
SI Grows for 6 Consecutive Quarters, Shinsegae DF Returns to Profit... Subsidiaries Show Strong Performance

Shinsegae Department Store Main Branch.

[Asia Economy Reporter Yuri Kim] Shinsegae recorded its highest-ever performance in the second quarter this year, driven by balanced growth both online and offline. The company is evaluated to have secured both external growth and internal stability based on offline expansion following the lifting of social distancing measures, digital strategies to enhance future competitiveness, and record-high results from its consolidated subsidiaries.

Shinsegae announced on the 10th that its consolidated operating profit for the second quarter reached 187.4 billion KRW, a 94.7% increase compared to the same period last year. During the same period, sales rose 34.5% to 1.8771 trillion KRW, and net profit surged 394.1% to 82.3 billion KRW. This is the highest-ever quarterly performance, surpassing market expectations (operating profit of 132.9 billion KRW, sales of 1.7587 trillion KRW), marking an earnings surprise. The cumulative results for the first half of the year also set a record high, with cumulative sales of 3.6436 trillion KRW and operating profit of 351 billion KRW.

Department stores posted second-quarter sales of 623.5 billion KRW, up 25.5%, and operating profit increased 80.6% to 121.1 billion KRW (including separate corporations in Gwangju, Daegu, and Daejeon). The reopening-driven renewal of the fashion categories (women’s and young fashion) at the Gyeonggi branch and the rapid stabilization of the new store (Daejeon Shinsegae Art & Science) contributed to offline sales growth centered on popular categories such as women’s fashion (34.2%), men’s fashion (34.7%), and outdoor (43.6%).

The digital transformation strategy also showed results. Shinsegae Department Store’s online sales in the second quarter grew 12.2% year-on-year. Shinsegae stated, "The introduction of non-fungible tokens (NFTs) using the industry’s first proprietary character, strengthening mobile application content such as travel and self-development, and the opening of new specialty zones in the SSG.com Shinsegae Department Store mall contributed to steady growth in the digital sector." The NFT using the distribution industry’s first proprietary character, Poovilla, was sold out within one second of minting (sale), gaining popularity. As of the second quarter, the number of mobile app users for Shinsegae Department Store increased 137.0% year-on-year to 6.2 million.

Offline sales from customers in their 20s and 30s grew 38.0% year-on-year, and Sicor.com also recorded a growth rate of 67.6%, indicating increased customer interest in the "Shinsegae" brand. Shinsegae plans to continue its strong performance in the second half of the year based on new online and offline content, including the renewal opening of the young fashion specialty zone at the Gangnam branch and strengthening luxury content on SSG.com.

Subsidiaries also continued their strong performance. Shinsegae International recorded second-quarter sales of 383.9 billion KRW and operating profit of 38.7 billion KRW, representing increases of 12.7% and 46.0%, respectively, compared to the same period last year. Shinsegae International has recorded growth for six consecutive quarters since the first quarter of 2021. High demand in the fashion category due to reopening led to a 12.0% increase in sales of its own women’s wear brands such as Studio Tomboy and BOBB, while the continued popularity of luxury and contemporary brands resulted in double-digit growth in the high-priced imported fashion category.

SI Village’s transaction volume increased 19.0% during the same period. SI Village aims to continue external growth in the second half of the year by enhancing customer convenience through AI-based personalized services following its renewal last month.

Shinsegae DF posted sales of 813.2 billion KRW, up 45.1% year-on-year, and recorded an operating profit of 28.7 billion KRW, turning profitable. Despite challenging external conditions such as continued border closures in China and a decline in bulk sales due to exchange rate increases, the company achieved profitability through a sales strategy focused on individual tourists, sound management, and accounting cost reductions from lease accounting effects. It is expected that performance recovery will accelerate as the domestic duty-free allowance increases and airport passenger numbers rise starting this Chuseok holiday.

Shinsegae Central City also recorded sales of 80 billion KRW and operating profit of 6.5 billion KRW due to increased rental income from hotels and department stores. Shinsegae Casa posted sales of 67.8 billion KRW, a 40.5% increase year-on-year, driven by product competitiveness and the stabilization of new stores and Good.com (online).

A Shinsegae official said, "We are continuing to achieve record-high quarterly results thanks to the innovative growth of department stores presenting a new distribution paradigm such as digital transformation and the strong performance of subsidiaries. We expect even better results in the second half of the year based on the Gangnam branch renewal, strengthening of specialty zones in the SSG.com Shinsegae Department Store mall, and solid growth of subsidiaries such as Shinsegae International and Shinsegae DF."

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