Shinsegae Achieves Balanced Growth Online and Offline with KRW 1.7665 Trillion Sales and KRW 163.6 Billion Operating Profit
Digital Content Successes Including NFT and Shinbaek Live Drive MZ Generation Customer Sales Growth
SI Records Best Q1 Performance, Shinsegae Casa Turns Profitable... Consolidated Subsidiaries Continue Growth Trend
[Asia Economy Reporter Kim Yuri] Shinsegae recorded its 'best quarterly performance ever' in the first quarter of this year, driven by balanced growth both online and offline. The growth in department store scale amid the endemic (periodic infectious disease outbreak) transition atmosphere and the record performance of subsidiaries contributed to these results.
On the 11th, Shinsegae announced that its consolidated operating profit for the first quarter of this year reached 163.6 billion KRW, a 32.4% increase compared to the same period last year. Sales during the same period rose 33.8% to 1.7665 trillion KRW. These figures far exceeded the financial investment industry's consensus estimates of 142.7 billion KRW in operating profit and 1.679 trillion KRW in sales.
On a separate basis, the department store also posted its best-ever first-quarter sales and operating profit. Shinsegae Department Store's operating profit increased by 47.6% to 121.5 billion KRW. Sales rose 18.7% to 585.3 billion KRW (including separate corporations in Gwangju, Daegu, and Daejeon).
The Daejeon Shinsegae Art & Science, which opened in August last year, successfully settled in the market, and the reopening expectations led to rapid recovery in popular categories such as golf wear (54.6%), outdoor wear (28.6%), men's fashion (23.7%), and women's fashion (21.7%), driving performance growth.
Online sales of Shinsegae Department Store also grew 14.2% in the first quarter. ▲Personalized shopping information and benefits (FIT service) ▲Differentiated content such as Shinbaek Library and Genie Music Lounge ▲Various digital content including Shinbaek Live (live commerce) contributed to the sales increase, according to analysis. The company evaluated that "industry-first and proactive digital marketing, such as producing and distributing non-fungible tokens (NFTs) and live streaming overseas fashion shows through the application (app), greatly contributed to creating future customers."
The number of mobile app users of Shinsegae Department Store in the first quarter of this year increased by 37.9%, surpassing 1 million. This is analyzed to have played a role in attracting the MZ generation (Millennials + Generation Z) offline. In March, SSG.com renewed the Shinsegae Department Store Mall, opening the industry's largest 'Luxury Lifestyle Platform' introducing about 2,000 brands. New customers of SSG.com Shinsegae Department Store Mall doubled compared to the previous year within a month of the renewal. Daily visitors also increased by 20%.
Shinsegae plans to accelerate the establishment of an integrated department store combining online and offline by newly opening the luxury pavilion at the Gyeonggi branch and launching a golf specialty pavilion within SSG.com in the second half of this year.
It was also explained that the performance of consolidated subsidiaries showed a favorable trend. Shinsegae International recorded sales of 352.2 billion KRW and operating profit of 33.1 billion KRW amid balanced growth in each business sector such as fashion, beauty, and lifestyle. These figures represent increases of 3.0% and 55.4%, respectively, compared to the previous year. Both sales and operating profit marked the highest first-quarter performance ever, continuing the growth trend since the fourth quarter of last year. The fashion sector showed remarkable growth amid reopening expectations. Imported fashion sales grew by double digits year-on-year due to increased demand from young customers for imported fashion and premium golf wear, and profitability of in-house fashion improved significantly through business efficiency.
Shinsegae DF posted sales of 772.1 billion KRW, a 61.2% increase, but recorded an operating loss of 2.1 billion KRW. Operating profit declined due to China's COVID-19 lockdown policies and the spread of the Omicron variant domestically. The company expects "performance to improve rapidly in the second half of this year due to China's economic stimulus measures and increased overseas tourism demand."
Central City also recorded sales of 69.5 billion KRW and operating profit of 15.3 billion KRW due to increased rental income from the department store's sales growth. Shinsegae Casa turned profitable for the first time in four years based on product competitiveness and an online strengthening strategy centered on Good.com. Shinsegae Casa plans to enhance competitiveness by opening more than 12 new stores within the year and launching the stay-type complex cultural space 'Casa Grande' in the second half of this year.
A Shinsegae official said, "We achieved the best-ever first-quarter performance thanks to the solid results of the department store, achieved through proactive digital content introduction and successful settlement of new offline stores, and the growth of subsidiaries. Based on the competitiveness of the offline core business, we will strive to build an integrated online-offline distribution platform leading the new normal era by combining digital content."
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