[Asia Economy Reporter Eunmo Koo] Shinsegae International recorded an 'earnings surprise' that exceeded market expectations along with its best-ever first-quarter performance, driven by increased demand from economic reopening and business efficiency improvements.
Shinsegae International announced on the 11th that its consolidated operating profit for the first quarter of this year was approximately KRW 33.17 billion, a 55.6% increase compared to the same period last year. Sales during the same period rose 3.0% to KRW 352.183 billion.
This marks the highest first-quarter performance in the company's history, continuing a steady growth trend following last year's record-breaking results. Previously, Shinsegae International posted sales of KRW 1.4508 trillion and operating profit of KRW 92 billion last year, representing growth of 9.5% and 172.4%, respectively, compared to the previous year.
With expectations for the lifting of social distancing measures, overall fashion demand increased, leading to strong growth in imported fashion centered on luxury goods and in-house fashion brands. Steady preference among younger consumers for luxury and contemporary brands, along with increased demand for premium golf wear, resulted in double-digit growth in imported fashion sales compared to the same period last year. As the market response to the newly launched Philipp Plein Golf is rapidly rising, sales are expected to increase significantly starting in the second quarter, the season for golfing.
In-house fashion brands saw a significant improvement in operating profit as business efficiency efforts initiated last year bore fruit. By streamlining inefficient brands and stores and increasing the hit rate of new products designed based on data analysis to suit the tastes of the MZ generation, the company succeeded in capturing both sales and profits.
Studio Tomboy, an in-house fashion brand, recorded a 725% increase in operating profit in the first quarter compared to the same period last year, and plans to continue steady growth by expanding its lineup to include sportswear, pajamas, and an exclusive men's collection.
The cosmetics division is supported by steady demand growth in the niche perfume market, stabilizing the performance of imported cosmetics. Additionally, the in-house cosmetics brand Swiss Perfection saw sales increase by 129.7% year-on-year as its market share in the premium skincare segment both domestically and internationally grew. With plans to enter major duty-free stores in China in the second half of the year, sales are expected to gain further momentum.
The Jaju business division improved both sales and profitability, with sales increasing 5.4% year-on-year due to an online shift through e-commerce channel expansion.
The in-house online mall SI Village saw a 31% increase in transaction volume in the first quarter compared to the same period last year, as preference and awareness rose amid counterfeit issues on online luxury platforms. A large-scale renewal planned for the first half of this year aims to increase new members and loyal customers, laying the foundation for sustained growth.
A Shinsegae International official stated, "The successful diversification of our business into fashion, beauty, living, and online sectors has shone even brighter during the reopening period. Not only are imported brands performing well, but our in-house fashion and beauty brands are also delivering strong results. We are actively exploring new business opportunities and expect to continue structural growth in the second quarter."
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