"Shinsegae Inter's 2Q Operating Profit Halved YoY Amid Departures Including Celine (Comprehensive)"

Operating Profit 18.4 Billion KRW... 53% Decrease Year-on-Year
New Brand Influx in Q3... Expectation of Performance Improvement

Shinsegae International received a disappointing performance report for the second quarter of this year. While cosmetic and luxury fashion brands performed well, the termination of contracts with some brands such as Celine affected the results.

Shinsegae International announced on the 9th that its consolidated operating profit for the second quarter of this year was tentatively estimated at 18.4 billion KRW, down 52.5% compared to the same period last year. During the same period, sales amounted to 333.8 billion KRW, a decrease of 13.1% year-on-year, and net profit was 19.4 billion KRW, down 41.7%.

The decline in sales and operating profit is analyzed to be due to the termination of contracts with some overseas luxury brands such as Celine last year. However, compared to the first quarter, sales and operating profit increased by 6.9% and 79%, respectively, showing a clear improvement trend. From the third quarter, three or more new brands are scheduled to be launched in fashion and three or more in cosmetics, and business efficiency improvements are underway, raising expectations for performance growth in the second half of the year.

In the second quarter, cosmetics and luxury fashion brands drove the performance. In cosmetics, niche perfumes such as Diptyque and Byredo continued to grow, while representative vegan beauty brand Hourglass (+245.3%) and new niche perfume brand Memo Paris (+98.9%) showed significant increases in performance compared to the same period last year. French luxury cosmetics brand Laura Mercier, launched this year, also showed good results by achieving 140% of its sales target.

In-house cosmetics also showed a significant increase in sales, indicating a full-fledged growth trend. High-function skincare brand Yeonjak (+82.4%), luxury brand Poare (+159.3%), and lifestyle beauty brand Roybi (+88.1%) are understood to have achieved good results compared to the previous year.

In overseas fashion, premium brands such as Chrome Hearts (+89.8%) and Brunello Cucinelli (+14%) showed good performance compared to the same period last year amid the quiet luxury trend. UGG, known as the epitome of winter boots, saw a 35% increase in sales in the second quarter as its summer collection and rain boots gained great popularity.

In-house fashion brands Studio Tomboy and BOB, which have large sales volumes, continue their growth trend. Studio Tomboy is said to have further strengthened brand loyalty, maintaining the number one sales position for several years in major department store young casual stores.

Jaju’s sales increased by 3.2% year-on-year, supported by the popularity of fashion products. Underwear leading the body positivity trend, such as bralettes and women's square panties, continued to receive good responses, and women's and men's clothing targeting cost-effectiveness also received favorable reactions across the board.

Shinsegae International plans to secure new growth engines by launching more than three new imported brands in fashion and more than three in cosmetics in the second half of this year. In fashion, it will introduce contemporary, sports, and casual brands popular in the global market, and in cosmetics, it will launch perfume and makeup brands that continue high growth to build a strong portfolio. Along with this, it will actively promote the globalization of in-house brands such as Studio Tomboy, Poare, and Swiss Perfection to strengthen competitiveness.

A Shinsegae International official said, “The second quarter of this year showed a good trend with a sharp increase in operating profit compared to the previous quarter,” adding, “With a large influx of new brands expected in the second half, we anticipate even better performance as the year progresses.”

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