Strengthening Core Competencies for Profit-Linked Growth
Adding 'Liquor Retail' to Boost Wine Business
Improving Dividend Procedures to Eliminate 'Opaque Dividends'
Emart CEO Kang Hee-seok, on the occasion of the company's 30th anniversary, identified strengthening profitability through efficient cost management as the key goal for this year. Emart plans to add liquor retailing to its business objectives and further strengthen its wine business.
CEO Kang Hee-seok: “Strengthening Profitability through Efficient Cost Management”
At the regular shareholders' meeting held on the 29th at Emart headquarters in Seongdong-gu, Seoul, CEO Kang announced plans to improve labor productivity by adjusting store operating hours, expanding unmanned and automated systems, and activating data-driven smart work through the introduction of next-generation systems.
CEO Kang stated, “Our principle is to invest in stores capable of generating results and to conduct selective renovations according to the role of each store. We will compress the directly managed area of loss-making stores through structural improvements and increase tenants to achieve labor efficiency and enhance store space productivity.” He added, “We will improve the profitability of the online business by streamlining online PP (picking and packaging) operations and advancing the delivery network, and carefully manage costs by optimizing traditionally executed promotional expenses through data-based performance analysis.”
He also emphasized pursuing growth accompanied by profits through strengthening core competitiveness. CEO Kang explained, “To celebrate the 30th anniversary, we will conduct year-round customer appreciation marketing, run a national price stabilization project based on bulk purchasing and pre-planning to operate daily necessities at the lowest prices, and strengthen product competitiveness by launching exclusive and limited products.”
Furthermore, he stressed efforts to expand new revenue streams by actively developing new growth engines. CEO Kang said, “We will expand the introduction of digital advertising media in existing offline stores and strengthen utilization rates and sales capabilities. We will introduce new revenue businesses using data on brand characteristics within product categories and customer shopping behaviors to expand the scale of the advertising business.”
He also promised to improve the financial structure through debt reduction and efficient investment execution. CEO Kang stated, “We will significantly reduce debt and decrease financial cost burdens through the securitization of inefficient assets and adjustment of the investment portfolio. This year, we will reduce investment scale to less than half compared to the previous year and focus investments on core and profitable business areas to secure financial soundness.”
CEO Kang was reappointed as an inside director at the shareholders' meeting. With the approval of this reappointment, his term as CEO, which began in 2019, has been extended until March 2026. Additionally, the reappointment of Kwon Hyuk-gu, head of Shinsegae Strategy Office, as an inside director, and the appointments of Shin Eon-seong, Seo Jin-wook, Kim Yeon-mi (reappointed), and Lee Sang-ho (new appointment) as outside directors were approved as originally proposed.
'Liquor Retailing' Added to Business Objectives... Improvement of 'Blind Dividend' System
At the shareholders' meeting, Emart passed a resolution to add 'liquor retailing' and 'database and online information provision services' to its business objectives. With this approval, Emart is expected to further strengthen its liquor business. In particular, preparations for opening a comprehensive liquor specialty store, expected to open next month at Starfield Hanam, are expected to accelerate.
Emart is preparing a liquor specialty store of about 500 pyeong (approximately 1,650 square meters) by utilizing the vacant space created by the closure of the PK Market, a grocery specialty store within Starfield Hanam. Although Emart owns more than 40 'Wine & More' stores operated by its liquor import affiliate Shinsegae L&B nationwide, it does not have a large-scale store that can compete with Lotte Mart’s 'Bottle Bunker.'
Emart plans to make this new liquor specialty store the flagship liquor store of the Shinsegae Group, surpassing Bottle Bunker. Conceptualized as a 'playground for adults,' this liquor specialty store is expected to become a liquor landmark that combines Emart’s sourcing know-how and product expertise accumulated over more than 15 years of operating wine markets. It is reported that special attention is being paid to French and American wine lineups, including champagne.
Additionally, through amendments to the articles of incorporation, Emart has taken steps to improve the dividend procedure and resolve the so-called 'blind dividend' issue. Domestic listed companies have been criticized for determining shareholders eligible for dividends at the end of the year first and then finalizing the dividend amount at the shareholders' meeting held the following year, causing investment uncertainty. However, Emart strengthened its shareholder-friendly policies by proposing and passing an amendment to the articles of incorporation regarding the dividend record date, becoming a pioneer in the distribution industry. Specifically, the dividend record date, which determines the shareholders entitled to dividends, will be moved to after the dividend amount is finalized.
Earlier, Emart announced a shareholder return policy last month that adjusts the dividend payout ratio from 15% of separate annual operating profit to 20%. It also fixed the minimum dividend per share at 2,000 won, ensuring stable dividend income for shareholders even if the payout ratio falls short. Emart reviews its dividend policy every three years; this policy will be in effect for three years until 2025, after which it will be reviewed again. Emart explained, “This return policy was established to increase long-term predictability of shareholder returns while ensuring stable dividends.”
Although the distribution industry is strengthening shareholder-friendly policies by expanding dividends, it still appears reluctant to actively improve the so-called blind dividend system. Domestic listed companies have been criticized for determining shareholders eligible for dividends at the end of the year first and then finalizing the dividend amount at the shareholders' meeting held the following year, known as blind dividends. In response, financial authorities announced in January measures to improve the dividend procedure so that investors can confirm dividend amounts before deciding on investments. Specifically, the dividend record date will be moved to after the dividend amount is finalized. However, most major distribution companies did not propose amendments to separate the voting rights record date and dividend record date at this year's regular shareholders' meetings.
However, Emart has taken the lead in resolving the blind dividend issue in the distribution industry by improving the dividend procedure. Emart announced through a disclosure that it will propose an amendment to the articles of incorporation regarding the dividend record date at the shareholders' meeting on the 29th. The amendment aims to have the board of directors set the dividend record date after the dividend amount is finalized. The amended articles of incorporation will apply from the next dividend onward.
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