Shinsegae Casa, Approaching Profitability in the Third Year of Kim Hong-geuk's Leadership

Estimated Operating Surplus for Shinsegae Casa in Q3 This Year
No Profit Since Joining Shinsegae Group in 2018
CEO Kim Focuses on Profitability-Driven Strategy to Reduce Deficit

Shinsegae Casa, now in its third year under CEO Kim Hong-geuk, is expected to achieve its first annual profit. This comes six years after its incorporation into the Shinsegae Group.

According to financial information firm FnGuide on the 31st, Shinsegae Casa's third-quarter sales are estimated at 65.4 billion KRW, with an operating profit of 1 billion KRW. Having turned a profit in the first half of this year with sales of 133.5 billion KRW and an operating profit of 0.5 billion KRW, Shinsegae Casa is anticipated to achieve an annual profit this year.

Kim Hong-geuk, CEO of Shinsegae Casa and CEO of Shinsegae International Beauty & Life Division.

In 2018, Shinsegae acquired Casamia (now Shinsegae Casa). Although sales steadily increased, profitability remained an issue. Shinsegae Casa recorded operating losses from the acquisition year 2018 through last year. In particular, in 2022, the deficit widened compared to the previous year, necessitating structural improvements.

In response, Shinsegae appointed 'product planning expert' Kim Hong-geuk as a relief pitcher in October 2022. Previously head of the product division at E-Mart, he was appointed CEO of Shinsegae TV Shopping (now Shinsegae Live Shopping) in 2018. Under Kim’s leadership, Shinsegae Live Shopping recorded a profit for the first time since its launch. In 2019, Shinsegae Live Shopping turned from an operating loss of 3.7 billion KRW to an operating profit of 25.6 billion KRW the following year.

Since Kim’s appointment, Shinsegae Casa has reduced its operating losses annually, shrinking from 27.7 billion KRW in 2022 to 16.9 billion KRW in 2023. The focus on profitability-driven strategies proved effective. Rather than aggressive expansion, efforts concentrated on enhancing brand competitiveness.

Casamia New Museo Dress Room. (Photo by Shinsegae Casa)

In particular, the company strengthened its design identity. Shinsegae Casa actively targeted the domestic premium furniture market with differentiated designs unique to the brand. To this end, CEO Kim integrated the product development and sourcing MD teams responsible for design. Subsequently, the lineup of Shinsegae Casa’s flagship brand Casamia was extensively reorganized. This is credited with achieving consecutive operating profits in the first and second quarters of this year.

To maintain the operating profit trend in the fourth quarter, Shinsegae Casa plans to stabilize its business structure and increase sales by fostering the sleep-specialized brand ‘Materasso’ to target the rapidly growing sleep market, actively incorporating customer feedback into product development, and advancing work processes from product development to operations and sales.

Recently, Shinsegae Casa enhanced customer convenience and satisfaction by launching the ‘Self Planner’ service on its online shopping platform ‘Good.com,’ allowing customers to design Casamia modular furniture themselves and check estimates.

Meanwhile, on the 30th, CEO Kim was appointed concurrently as head of the Beauty & Life Division at Shinsegae International in the Shinsegae Group executive personnel reshuffle.

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