[26th Anniversary of Gwangju Shinsegae Local Corporation] "Enhancing Social Responsibility to Increase Corporate Value"

Exterior view of Gwangju Shinsegae.

[Asia Economy Honam Reporting Headquarters, Reporter Shin Dong-ho] Lee Dong-hoon, CEO of Gwangju Shinsegae, announced on the 22nd that the company will strengthen its social responsibility in celebration of the 26th anniversary of its local corporation.

CEO Lee said, "Gwangju Shinsegae was able to grow into a representative company of Honam today by starting with the groundbreaking management value of being the industry's first local corporation, thanks to the unwavering love and trust of the region and its residents."

He added, "Last year, due to the COVID-19 pandemic, the domestic and international department store industry experienced growth stagnation and profitability deterioration, making it one of the toughest years. However, despite the industry's crisis, it was also a year in which we discovered new growth opportunities and confirmed the direction to move forward."

Gwangju Shinsegae plans to first strengthen social responsibility to enhance corporate value.

Recently, corporate value assessments have shifted from the traditional method of judging only financial performance to evaluating various activities by sufficiently reflecting non-financial factors such as corporate value and sustainability from a long-term perspective.

In particular, companies have shown great interest in recent years in the recognition that co-prosperity with the local community is the way to increase corporate value in order to grow as a regional company.

Gwangju Shinsegae has also been actively carrying out social responsibility management activities to enhance corporate value recently.

▶ Discovering local brands... Creating opportunities for nationwide brand leap

Representative examples include ‘Yukgak Coffee,’ which has grown based in Gwangju with a hot response locally, and ‘Kitchen205,’ a specialized dessert cafe in Hampyeong Hot Place that insists on using fresh strawberries 365 days a year.

‘Yukgak Coffee’ and ‘Kitchen205’ are the top local brands attracting attention from other distribution industries and are reportedly considering whether to enter stores not only in the Gyeonggi area but also in other locations.

Also, ‘Spol,’ a Gwangju golf equipment specialty brand that has been in the store for six years this year, has recently emerged as a hot brand.

Since its opening, this brand has created opportunities to showcase the excellence of Gwangju brands through pop-ups at various stores, attracting so much interest that consumers who purchased products have inquired about store entry.

It was also launched in the Daegu branch in March and is reportedly under review for official openings in other stores.

In 2019, through a large-scale renovation, seven prominent local brands including Gungjeon Bakery, Yangdong Chicken, Somac Bakery, and Fresh Kitchen were massively introduced into the food plaza.

This led to a flood of inquiries from Shinsegae stores, and among them, Somac Bakery and Fresh Kitchen, which showed the most interest, proudly entered the Shinsegae Times Square store in Yeongdeungpo, leading the commercial district, in January last year.

Another representative case of Gwangju Shinsegae is Unhyeongung, which has grown into a nationwide bedding brand.

Unhyeongung was discovered at Yangdong Market in Seo-gu when it opened in 1995 as a traditional Korean bedding set manufacturer, expanded its distribution network to nationwide stores, and has now grown into a well-established nationwide brand.

▶ Holding co-prosperity markets to secure sales channels for farmers and fishermen

As the COVID-19 crisis prolonged last year, Gwangju Shinsegae consistently held co-prosperity markets to secure sales channels for farmers and fishermen struggling with sales of agricultural, fishery, and livestock products.

Going beyond this, Shinsegae and Jeonnam Province signed a business agreement in May last year to expand sales of agricultural, fishery, and livestock products nationwide.

Following the agreement, starting with a direct transaction co-prosperity market for excellent agricultural and marine specialty products in cooperation with Jeonnam Province in April and May last year, events were held at Shinsegae Daegu branch in June, Busan Centum City branch in July, and Gangnam branch.

Moreover, to go beyond temporary co-prosperity markets, ‘Beyond Farm’ was opened on March 16th in the basement first floor food section of the main building, where excellent 6th industry products from the Gwangju and Jeonnam regions can be exhibited and sold regularly.

Beyond Farm displays and sells rural food products from about 40 companies selected through strict screening among 311 certified 6th industry companies in Gwangju and Jeonnam.

Lee Dong-hoon, CEO of Gwangju Shinsegae. Photo by Gwangju Shinsegae

▶ Accelerating eco-friendly management including energy-saving machinery introduction

Efforts are being intensified for eco-friendly management through energy-saving machinery, facility improvements, introduction of eco-friendly materials, and spreading green consumption culture.

Gwangju Shinsegae achieved about a 50% reduction in power consumption last year by replacing general lighting with LED lights and achieved a 20% reduction effect by installing water-saving devices at restroom sinks.

This year, they plan to actively introduce measures identified through detailed analysis to save energy.

They are also striving to create a good consumption culture by carrying out various resource circulation and eco-friendly related activities.

First, since the 2018 Lunar New Year holiday, they have expanded and introduced eco-friendly and recyclable packaging materials and refrigerants.

They have eliminated all wood and cloth packaging and packaged products in recyclable paper boxes, which has been praised for protecting the environment as well as maintaining product quality.

In addition, the basement first floor food section is making efforts to promote and revitalize sales of green products such as kitchen detergents, household goods, laundry detergents, deodorants, and air fresheners.

Regarding agricultural products, eco-friendly products such as Green Star (holiday gifts), fruits, vegetables, eggs, and organic low-carbon pesticide-free certified products are also sold.

They are working to expand the eco-friendly store area from food-centered to all genres.

To this end, they plan to actively engage in joint planning and development of eco-friendly products with partner companies.

▶ Efforts to concretely realize community-friendly projects

A representative community-friendly project carried out by Gwangju Shinsegae is the scholarship program.

As a mutual aid activity continuously carried out since the store's opening, the scholarship program supports tuition fees for high school students in the region every year and will continue unchanged this year. So far, a total of about 2,700 students have received a total of about 2.8 billion KRW.

Since last year, a social contribution event has been held once a month in the first-floor event hall, providing 10 million KRW in sponsorship funds monthly to underprivileged groups in the region who are in real need.

Especially this year, marking the 26th anniversary of the corporation's establishment, donation activities for firefighters are being focused on.

They are conducting an upcycling event with the social enterprise 119REO, which uses expired firefighting equipment to create items that can remind people of firefighters in daily life, donating 50% of sales profits to firefighters who were denied compensation for injuries.

They are also steadily supporting cultural sponsorships for fostering cultural citizens and the development of the cultural city of Gwangju.

They actively support the ‘Gwangju Biennale,’ a representative local international contemporary art exhibition, to grow steadily into a world-class cultural and artistic festival.

Since the first event in 1995, continuous support has been provided, with a total of 1.7 billion KRW donated to the Gwangju Biennale, and despite the poor store management environment due to COVID-19 last year, support for regional cultural projects has remained unchanged.

▶ Trendy proposals considering customer lifestyles

Gwangju Shinsegae plans to deepen customer experience through special experiences and shared spaces for customers.

They will strengthen experiential content using idle spaces within the store and promote sales growth through skinship programs with VIP customers.

They also plan to conduct small-scale renovations considering profitability to become a department store that always proposes new and trendy MDs.

CEO Lee said, "Now, corporate value cannot be recognized by sales performance alone," adding, "We will further strengthen the community-friendly projects we are doing, develop new initiatives, and implement them to further enhance the value of Gwangju Shinsegae."