Shinsegae International Reports Operating Profit of 38.7 Billion KRW in Q2... "Record High Performance in Off-Season" (Comprehensive)

Sales of 383.9 billion KRW up 12.7%
Operating profit also up 46%... 38.7 billion KRW
6 consecutive quarters of sales and operating profit growth
Profit improvement through business efficiency even in fashion off-season

[Asia Economy Reporter Song Seung-yoon] Shinsegae International showed growth for the sixth consecutive quarter in Q2 as both sales and operating profit increased due to the benefits of reopening (resumption of economic activities).

Shinsegae International announced on the 10th that its consolidated sales for the second quarter of this year were preliminarily estimated at 383.9 billion KRW, a 12.7% increase compared to the same period last year. Operating profit rose 46% to 38.7 billion KRW.

Thanks to business efficiency improvements carried out since last year, profits improved significantly, and for the first time, both Q2 sales and operating profit surpassed the Q1 results. Sales and operating profit in Q1 were 352.2 billion KRW and 33.1 billion KRW, respectively. Typically, Q2 is considered the biggest off-season in the fashion industry as relatively lower-priced clothing is sold. However, with the reopening in full swing, sustained fashion demand drove overall sales through both in-house and imported fashion brands.

Preference for luxury and contemporary brands continued steadily, with high-priced imported fashion sales such as Brunello Cucinelli, Alexander Wang, and Chrome Hearts maintaining double-digit growth compared to the same period last year. The golf market's growth also contributed to strong performance from J.Lindeberg and the new brand Philipp Plein Golf.

Sales of in-house women's wear brands such as BOB, JIGOTT, and Studio Tomboy also grew 12% year-on-year due to the resumption of office attendance, increased outings, and travel. Operating profit rose significantly as the sell-through rate of new products at regular prices increased, and profitability improved through the closure of inefficient stores and efficient inventory management.

In the cosmetics sector, niche perfumes with high repurchase rates such as Diptyque, Byredo, and Santa Maria Novella continued steady growth. The in-house cosmetics brand Poare, launched last year, saw Q2 sales increase by 110% year-on-year due to increased brand awareness. Byredo plans to expand customer touchpoints by opening five additional stores this year.

The Ja-ju business division saw sales increase by 13% year-on-year through continuous hit products such as underwear, cooling bedding materials, and pajamas. In the second half of the year, the company plans to maintain double-digit growth through strategic product operations and active marketing. The recognition and preference for its own online mall, S.I.VILLAGE, also continued to rise, with transaction volume in Q2 increasing by 19% year-on-year.

A Shinsegae International official said, "July is continuing the positive momentum from the first half, so we expect strong results in Q3 as well," adding, "We will continuously discover new brands to create a virtuous cycle of brands and invest profits gained from imported brands into nurturing in-house brands to establish a solid growth foundation."